Bombay High Court
Mv Golden Pride vs Gac Shipping (India) Pvt. Ltd. And ... on 2 May, 2023
Bench: K.R. Shriram, Rajesh S. Patil
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ADMIRALTY AND VICE ADMIRALTY JURISDICTION
IN ITS COMMERCIAL DIVISION
(913) COMMERCIAL APPEAL NO. 55 OF 2022
IN
INTERIM APPLICATION (L) NO. 7724 OF 2021
IN
COMMERCIAL ADMIRALTY SUIT NO. 7 OF 2021
MV Golden Pride )
(Through her owner Golden Star Marine FZE) )
A vessel flying the flag of Domnica )
Which was ordered to be auction sold )
vide Order dated 22nd December 2020 and )
reconfirmed vide Order dated 24th March 2021 )
passed by the Hon'ble Bombay High Court )
and the sale proceeds of which are lying )
deposited with the Ld. Prothonotary and )
Senior Master ) ....Appellant/
(Original Defendant No.1)
V/s.
1. GAC Shipping (India) Pvt. Ltd. )
Having its registered office at P.O. Box 515, )
Subramania Road, Willingdon Island, Kochi, )
Kerala - 682 003 and also having an office at )
P.B. No. 226, G.P.O., Badheka Chamber, )
31, Manohardas Street, Mumbai - 400 001. ) ....Respondent No.1
(Original Plaintiff)
2. The Board of Trustee of the Port of Mumbai )
A body corporate constituted under the Major )
Ports Act 1963 having their office at Vijay Deep, )
Shoorji Vallabhdas Marg, Ballard Estate, )
Mumbai - 400 038. ) ....Respondent No.2
(Original Defendant No.2)
3. The Office of the Sheriff of Mumbai through )
Sheriff of Mumbai, having its Office at )
Old Secretariat Building, Mumbai - 400 032. ) ....Respondent No.3
(Respondent No.3 in
Interim Application (L)
No. 8290 of 2021)
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4. M/s. Rajnish Steel Pvt. Ltd. Through the )
Director, Mr. Rajnish Gupta R/o. 131, Kasara )
Street, Darukhana Mazgaon, Mumbai - 400 010. ) ....Respondent No.4
(Applicant in Interim
Application No. 7724 of
2021)
ALONGWITH
INTERIM APPLICATION NO. 1676 OF 2022
IN
COMMERCIAL APPEAL NO. 55 OF 2022
IN
INTERIM APPLICATION (L) NO. 8290 OF 2021
AND
INTERIM APPLICATION (L) NO. 7724 OF 2021
IN
COMMERCIAL ADMIRALTY SUIT NO. 7 OF 2021
Mohammed Raees Khan, Sole Proprietor of )
Golden Star Marine (FZE) & Owner of Defendant )
vessel and having his current Residential Address )
at 181, 12th A Cross, WOC Road, )
Mahalaxmipuram, Bangalore - 560 086 . ) ....Applicant
(Original Defendant No.1)
In the Matter of )
MV Golden Pride )
(Through her owner Golden Star Marine FZE) )
A vessel flying the flag of Domnica )
Which was ordered to be auction sold )
vide Order dated 22nd December 2020 and )
reconfirmed vide Order dated 24th March 2021 )
passed by the Hon'ble Bombay High Court )
and the sale proceeds of which are lying )
deposited with the Ld. Prothonotary and )
Senior Master ) ....Appellant/
(Original Defendant No.1)
V/s.
1. GAC Shipping (India) Pvt. Ltd. )
Having its registered office at P.O. Box 515, )
Subramania Road, Willingdon Island, Kochi, )
Kerala - 682 003 and also having an office at )
P.B. No. 226, G.P.O., Badheka Chamber, )
31, Manohardas Street, Mumbai - 400 001. ) ....Respondent No.1
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(Original Plaintiff)
2. The Board of Trustee of the Port of Mumbai )
A body corporate constituted under the Major )
Ports Act 1963 having their office at Vijay Deep, )
Shoorji Vallabhdas Marg, Ballard Estate, )
Mumbai - 400 038. ) ....Respondent No.2
(Original Defendant No.2)
3. The Office of the Sheriff of Mumbai through )
Sheriff of Mumbai, having its Office at )
Old Secretariat Building, Mumbai - 400 032. ) ....Respondent No.3
(Respondent No.3 in
Interim Application (L)
No. 8290 of 2021)
4. M/s. Rajnish Steel Pvt. Ltd. Through the )
Director, Mr. Rajnish Gupta R/o. 131, Kasara )
Street, Darukhana Mazgaon, Mumbai - 400 010. ) ....Respondent No.4
(Applicant in Interim
Application No. 7724 of
2021)
AND
(914) COMMERCIAL APPEAL NO. 12 OF 2023
IN
INTERIM APPLICATION (L) NO. 8290 OF 2021
IN
COMMERCIAL ADMIRALTY SUIT NO. 7 OF 2021
MV Golden Pride )
(Through her owner Golden Star Marine FZE) )
A vessel flying the flag of Domnica )
Which was ordered to be auction sold )
vide Order dated 22nd December 2020 and )
reconfirmed vide Order dated 24th March 2021 )
passed by the Hon'ble Bombay High Court )
and the sale proceeds of which are lying )
deposited with the Ld. Prothonotary and )
Senior Master ) ....Appellant/
(Original Defendant No.1/
Applicant)
V/s.
1. GAC Shipping (India) Pvt. Ltd. )
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Having its registered office at P.O. Box 515, )
Subramania Road, Willingdon Island, Kochi, )
Kerala - 682 003 and also having an office at )
P.B. No. 226, G.P.O., Badheka Chamber, )
31, Manohardas Street, Mumbai - 400 001. ) ....Respondent No.1
(Original Plaintiff)
2. The Board of Trustee of the Port of Mumbai )
A body corporate constituted under the Major )
Ports Act 1963 having their office at Vijay Deep, )
Shoorji Vallabhdas Marg, Ballard Estate, )
Mumbai - 400 038. ) ....Respondent No.2
(Original Defendant No.2)
3. The Office of the Sheriff of Mumbai through )
Sheriff of Mumbai, having its Office at )
Old Secretariat Building, Mumbai - 400 032. ) ....Respondent No.3
(Respondent No.3)
----
Mr. Shyam Kapadia i/b Mr. Kunal S. Gaikwad for Appellant.
Mr. Bimal Rajasekhar a/w Ms. Ridhi Nyati for Respondent No.1.
Mr. V.K. Ramabhadran, Senior Advocate a/w Mr. Ajai Fernandes, Mr. Deepak
Motiwalla and Mr. Rooshesh Motiwalla i/b Motiwalla and Co. for
Respondent No.2.
----
CORAM : K.R. SHRIRAM &
RAJESH S. PATIL, JJ.
RESERVED ON : 13th APRIL 2023
PRONOUNCED ON : 2nd MAY 2023
JUDGMENT : (PER : K.R. SHRIRAM, J.)
COMMERCIAL APPEAL NO. 55 OF 2022
1. Appellant in both these appeals is impugning a common order
and judgment passed by the learned single Judge of this court on 24 th March
2021 in two Interim Applications, viz., Interim Application (L) No. 8290 of
2021 and Interim Application (L) No. 7724 of 2021. Interim Application (L)
No. 7724 of 2021 was filed by the auction purchaser of appellant/vessel MV
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Golden Pride which was allegedly owned by one Golden Star Marine FZE.
Interim Application (L) No. 8290 of 2021 is filed at the instance of one
Golden Star Marine FZE allegedly the owner of MV Golden Pride. Though it
is not clear why two separate appeals have been filed, we are only
concerned with the impugned order so far as it relates to Interim
Application (L) No. 8290 of 2021 filed by Golden Star Marine FZE. The
vessel MV Golden Pride (the said vessel) is no more a vessel since it has
been sold in auction by the court and the said vessel has already been
scrapped. Mr. Kapadia stated he was not pressing that issue of said vessel
being sold for scrapping and not as a trading vessel.
2. It is the case of Golden Star Marine FZE (hereinafter referred to
as "appellant") that the order dated 24th August 2020 passed by this court
arresting the said vessel could not have been passed since the claim of
Respondent No.1 was not a maritime claim under Section 4 of the Admiralty
(Jurisdiction and Settlement of Maritime Claims) Act, 2017 (the Admiralty
Act).
3. The second part of appellant's case is impugning the order of
the learned single Judge in permitting Mumbai Port Trust, viz., Respondent
No.2, to withdraw an amount of Rs.1,31,27,146/- out of a sum of Rs.1.50
Crores that appellant had deposited in the Hon'ble Apex Court, later
transferred pursuant to the directions/order passed by the Hon'ble Apex
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Court on 12th March 2021 to the Prothonotary and Senior Master, High
Court, Mumbai who is also the Admiralty Registrar.
4. Respondent No.1/Original Plaintiff had filed this Admiralty suit
against the said vessel MV Golden Pride claiming indemnity for unpaid port
charges with regard to the said vessel which Respondent No.2 may look to
them for payment. Respondent No.1 was of course denying that it had any
personal liability to the port.
5. Respondent No.1 was the agent of appellant. Towards the end
of May 2018 Respondent No.1 was appointed to provide agency services to
the said vessel during her stay at Mumbai. The agency charges were agreed
and appellant was to pay port charges to Respondent No.2. Port charges
were to be paid in advance but despite repeated reminders appellant did not
pay port charges. Port raised invoice on Respondent No.1 and also
threatened legal action. Respondent No.1 informed appellant that as on 31 st
July 2020 the estimated port charges would be approximately
Rs.46,00,000/- but still only a sum of Rs.10,000/- was paid. Respondent
No.1 had also given an undertaking to the Port - Respondent No.2 to pay all
its dues for all vessels calling under its agency. As Respondent No.1 feared
the port will look to it for payment of its charges and may even not permit
vessels to call under its agency, Respondent No.1 called upon appellant to
pay. As appellant was not paying either the Port or Respondent No.1,
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Respondent No.1 filed an action in rem against the said vessel claiming that
it is liable to pay the port the dues for the said vessel. According to
Respondent No.1, though it would be in the nature of indemnity, the
underlying claim would be a maritime claim against the said vessel, inter
alia, under Section 4(1)(n) and 4(1)(p) of the Admiralty Act. It is averred
in the plaint that (a) Respondent No.1's claim arises out of port dues
payable in respect of the said vessel and it is not liable to pay the port for
the same, (b) Respondent No.1 reasonably apprehends that the port will
look to it directly for payment of its dues, and (c) hence, Respondent No.1 is
entitled to be indemnified by the owner for the same. Respondent No.1
went ahead and obtained the order dated 24th August 2020 for arrest of the
said vessel. As appellant did not furnish any security/put up bail, the said
vessel was sold in auction for scrapping and the sale proceeds are lying with
the Admiralty Registrar of this court. Of course, appellant had also raised
an argument that the said vessel was sold for scrapping at a lower price
than what it would have fetched if sold for trading and that issue was also
dealt with by the learned single Judge in the impugned order. Mr.Kapadia,
however, stated that grievance is not being agitated now. His grievance
primarily is that the claim of Respondent No.1 by way of indemnity action
cannot amount to maritime claim and hence an action in rem against the
said vessel was not maintainable. Consequently, the said vessel could not
have been arrested and later sold. Mr. Kapadia stated that if the court holds
in his favour then he will be entitled to invoke the undertaking that
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Respondent No.1 had given to the court while obtaining the Ex-parte order
of arrest.
6. Having noted what is the case of Respondent No.1 in the plaint,
let us examine now whether its claim would be a maritime claim under
Section 4 of the Admiralty Act. The provisions that are relevant for the
cause of action disclosed in the plaint are Sections 4(1)(l), 4(1)(n) and 4(1)
(p) of the Admiralty Act which read as under :
4. Maritime claim : (1) The High Court may exercise
jurisdiction to hear and determine any question on a
maritime claim, against any vessel, arising out of any -
xxxxxxxxxx.
(l) goods, materials, perishable or non-perishable
provisions, bunker fuel, equipment (including containers),
supplied or services rendered to the vessel for its operation,
management, preservation or maintenance including any fee
payable or leviable;
(n) dues in connection with any port, harbour, canal,
dock or light tolls, other tolls, waterway or any charges of
similar kind chargeable under any law for the time being in
force;
xxxxxx
(p) disbursements incurred on behalf of the vessel or its
owners;
xxxxxx
7. Mr. Kapadia submitted as under :
(A) (a) Respondent No.1's claim would not fall under Section 4(1) of
the Admiralty Act, let alone under any of these three provisions.
(b) Respondent No.1 under Clause 4(1)(l) of the Admiralty Act will
be entitled to only agency fee that is payable to Respondent No.1 directly
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and not what Respondent No.1 may have to pay to the port.
(c) Under clause (n) of Section 4(1) of the Admiralty Act only port
can directly claim and not Respondent No.1 as it is claiming in the suit; and
(d) Under clause (p) of Section 4(1) of the Admiralty Act any
disbursement have to be incurred by Respondent No.1 on behalf of the
vessel or its owners, i.e., he must first pay and then claim and therefore,
claim itself was pre-mature.
Consequently, no action in rem as against the said vessel was
maintainable.
(B) The port having raised a demand notice for Rs.70,52,378/-
upon the master of the said vessel and threatening distrainment/arrest of
the said vessel, and later a notice under Section 64 of the Major Port Trusts
Act, 1963, Respondent No.1 ought to have withdrawn the suit and sought
for vacating the order of arrest. Otherwise, it would amount to arresting the
vessel twice for the same cause.
The amount was paid to port without having to file a suit or
prove the alleged claim. Port - Respondent No.2 has not proved its claim or
filed suit but still the learned single Judge directed payment of
Rs.1,31,27,146/- out of amount of Rs.1.50 Crores that appellant had
deposited. The learned single Judge should not have allowed that amount
to be paid without insisting that port should prove its claim.
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8. Mr. Bimal Rajesekhar appearing for Respondent No.1 submitted
as under :
(a) Liabilities properly incurred by the agent on account of the ship,
and which it is clear he has rendered himself liable to discharge will be
allowed against the owners even though at the time of the claim they may
not actually have been discharged.
(b) Section 4 (1) of the Admiralty Act provides that the High Court
may exercise jurisdiction to hear and determine any question on a maritime
claim, against any vessel, "arising out of any - ..........."
(c) Under clause (l) of Section 4(1) of the Admiralty Act, it says
"........ arising out of any ........ services rendered to the vessel for its
operation ......... including any fee payable or leviable". It only means
agency fee is one part of the component.
(d) Respondent No.1 had rendered services to the said vessel for its
operation. But for Respondent No.1 applying to Respondent No.2 (port) for
allotment of berth to the said vessel and undertaking to pay the port charges
for the said vessel's operation within the port to enter, stay and sail out; it
would have not possible.
(e) As regards Clause (n) of Section 4(1) of the Admiralty Act it
reads "....... on a maritime claim, against any vessel, "arising out of any
......" dues "in connection with" any port ........ or any charges of similar
kind chargeable under any law for the time being in force". It is wide
enough to include a claim that the agent would make when the agent
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becomes exposed to or has to pay those charges to the port on behalf of the
vessel.
(f) The expressions "arising out of" and "in connection with"
implies a very wide meaning.
(g) As regards clause 4(1)(p) of the Admiralty Act disbursement
"incurred" would mean liabilities properly incurred. Situations may arise
where a party relying on indemnity could very well file suit even though at
the time of the claim they may not actually have been discharged.
(h) The real meaning of "disbursement incurred" in admiralty
practice is disbursement which would make the agent liable being in respect
of necessary things for the ships and necessary in the sense means that he is
obliged.
(i) In an unreported judgment of a learned single Judge of this
court in Jakhau Salt Company Pvt. Ltd. Vs. M.V. Dhanlakhsmi 1 the court has
held that the person entitled to be indemnified may enforce his right as soon
as the liability to the third party arises and he can obtain relief before he has
actually suffered a loss.
In short "disbursement incurred" would not mean it requires
pre-payment. Liabilities properly incurred on account of the ship, and
which it is clear he has rendered himself liable to discharge will be allowed
against the owners even though at the time of the claim they may not
actually have been discharged.
1 Dated 22nd, 23rd and 24th July 2008
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(j) The whole law of indemnity is not embodied in Section 124 and
125 of the Indian Contract Act, 1872. A learned single Judge of this court in
Gajanan Moreshwar Parelkar Vs. Moreshwar Madan Mantri2 held that
Section 124 and 125 of the Indian Contract Act are not exhaustive of the
law of indemnity and that the courts here would apply the same equitable
principles that the Courts in England do. The court held that if the
indemnifier has incurred a liability and that liability is absolute, he is
entitled to call upon the indemnifier to save him from that liability and to
pay it off. If Respondent No.1 has to pay the amount before it could enforce
the indemnity and that he had to wait till the judgment is pronounced and
only after satisfying the judgment that he could sue on his indemnity it
would throw an intolerable burden upon the indemnity holder. What would
happen if the indemnifier was not in a position to make the payments.
Under the English Common Law no action could be maintained until actual
loss had been incurred and the Court of equity had stepped in and mitigated
the rigour of the Common Law. The Court of equity held that if the liability
of the indemnifier has become absolute then he was entitled either to get
indemnifier to pay off the claim or to pay into Court sufficient money which
would constitute a fund for paying off the claim whenever it was made and
that is exactly what happened in the case at hand.
(k) In Khetarpal Amarnath Vs. Madhukar Pictures 3 the Division
Bench of this court held that even before the damage is incurred by the
2 1942 SCC OnLine Bom 29
3 1955 SCC OnLine Bom 289
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indemnity-holder, it would be open to him to sue for the specific
performance of the contract of indemnity, provided of course it is shown
that an absolute liability has been incurred by him and that the contract of
indemnity covers the said liability.
(l) The words "arising out of" used in Section 4 of the Admiralty
Act cannot be given a narrow meaning of the expression "arising under".
Rather should be given a wider meaning like for example "connected with".
(m) Therefore the claim of Respondent No.1 was a maritime claim.
9. Mr. V.K.Ramabhadran for Respondent No.2 submitted, after
relying upon the authorities relied upon by Mr. Bimal Rajasekhar, as under :
(a) The learned single Judge has recorded that the claim of
Respondent No.1 would be maritime claim under Section 4(1)(n) and
Section 4(1)(p) of the Admiralty Act.
(b) Section 4(1)(n) of the Admiralty Act states "........ any question
on a maritime claim against any vessel, arising out of any ........ dues in
connection with port ........." is wide enough to include a claim in
indemnity. The term "relating to" or "arising out of" is synonymous with "in
connection with".
As per Blacks' Law Dictionary the term "relate to" is
synonymous with "connection with". The term "in relation to" (so also
"pertaining to"), is synonymous with the word "relate". The expression "in
relation to" is a very broad expression which presupposes another subject
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matter. These words of comprehensiveness might have both a direct as well
as an indirect significance depending on the context - Mansukhlal Dhanraj
Jain and Ors. Vs. Eknath Vithal Ogale4). The words "in connection with" are
synonymous with the words "in relation to" as held by the Hon'ble Apex
Court in Rajinder Singh Vs. State of Punjab 5. In view thereof "in connection
with" which is synonymous with the words "relates, relation to" would be
comprehensive enough to have a direct as well indirect significance. If the
intention of the statute was to restrict the maritime claim only to a direct
claim by port, harbour, canal etc., there was no need to add the words
"arising out of" ........ "dues in connection with port" etc. Therefore, the
words "arising out of ........ dues in connection with port" would not be
confined only to a claim made by the port but also include within that
Section an indemnity claim as well, as made by Respondent No.1.
(c) The claim would also fall under Section 4(1)(l) of the
Admiralty Act for services rendered to the vessel for its operation,
management, preservation or maintenance including any fee payable or
leviable. All services rendered to the said vessel, direct as well as indirect.
The said vessel could not have been able to operate within the port but for
the services that plaintiff/Respondent No.1 had rendered and hence Section
4(1)(l) of the Admiralty Act says "......and determine any question on a
maritime claim, arising out of ......... goods ........ or services rendered to
the vessel for operation ........". It is very broad and comprehensive.
4 (1995) 2 Supreme Court Cases 665
5 (2015) 6 Supreme Court Cases 477
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Renusagar Power Co. Ltd. Vs. General Electric Co.6 supports this view.
(d) As held by the Queen's Bench Division (Admiralty Court) in
England in the matter of The "Conoco Britannia" and Other Vessels7 "as long
as the subject matter of claim is a maritime claim, any indemnity claim in
respect of the same would also be a maritime claim.
(e) The learned single Judge rightly considered the claim of the
Port/Respondent No.2 to receive the requisite part of the security amount
deposited by appellant. The Hon'ble Apex Court in its order dated 12 th
March 2021 in paragraph no. 8 has stated as under :
8. Similarly, the claim of the Mumbai Port Trust to receive
the requisite part of the security amount deposited by the
appellant, during the interregnum, till all the questions are
finally answered on merits, can also be considered by the
learned Single Judge before deciding the contentions on
merits. For us, suffice it is to direct the Registry of this Court
to transfer the amount of Rs.1.50 crore deposited by the
appellant to the High Court of Judicature at Bombay in
Commercial Admiralty Suit (L) No.6807/2020 within a week.
Ordered accordingly.
(emphasis supplied)
The learned single Judge had been given the liberty to release
the amount payable to port before he even went on to decide the claims of
Respondent No.1 on merits. Appellant, by its Advocate's letter dated 25 th
November 2020 addressed to the port, assured the port that they were
arranging funds to clear the arrears of the port. That letter forms part of the
appeal paper book. The Constituted Attorney of appellant/owner of the
6 (1984) 4 SCC 679
7 (1972)1 LLR 342
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said vessel, as recorded in the order dated 18 th December 2020 of the
Admiralty Court, had made a statement to the court to furnish bank
guarantee in the sum of Rs.1,15,00,000/- (Rupees One Crore Fifteen Lakhs
only) together with interest at the rate of 15% per annum to secure the
claim of the port. As recorded in the order dated 1 st January 2021, the
counsel appearing on behalf of appellant on instructions taken in the court
made a statement that appellant was ready and willing to pay the entire
charges of Mumbai Port Trust alongwith interest as applicable on or before
4th January 2021. Though it was made without prejudice to its rights and
contentions, the fact is appellant admitted its liability to the port though
they may have some questions on the quantum.
Mr. Kapadia in fairness submitted that the port's claim has to be
paid, its dues cannot be questioned but the quantum certainly can be.
(f) Appellant has forfeited its right to file written statement under
the provisions of the Commercial Courts Act, 2015 and now cannot raise all
these submissions. Port is a defendant in the suit and if Respondent No.1
wishes, will step into the witness box to prove its claim to prove the charges
payable by the said vessel to the port.
In any event, on without prejudice basis, if at any stage the
court directs port to get the money back into the court, the port, without
prejudice to its rights and contentions, will abide by the court's order.
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10. Findings :
In our view, the claim as made by Respondent No.1 in the suit
will be a maritime claim under Section 4 of the Admiralty Act.
Section 4(1) of the Admiralty Act says "The High Court may
exercise jurisdiction to hear and determine any question on a maritime
claim, against any vessel, arising out of any - ..........."
In the case of Renusagar Power Co. Ltd. (supra) the Hon'ble
Apex Court has held "Expressions such as "arising out of" or "in respect of"
or "in connection with" or "in relation to" or "in consequence of" or
"concerning" or "relating to" the contract are of the widest amplitude and
content and include even questions as to the existence, validity and effect
(scope) of the arbitration agreement". Moreover in clause (n) of Section
4(1) of the Admiralty Act the expression used is "dues in connection with
port ..........". There is good deal of widest amplitude in the words "arising
out of" on the one hand and the terminology "dues in connection with port
........". The words "arising out of" and "in connection with" are of wide
nature and can take in their sweep a maritime claim which is made against
any vessel where there are dues of any vessel to the port including a claim
by an agent who has to be indemnified against a port's claim. It need not be
a claim only by the port but it can be even by an agent on indemnity action,
as is the case at hand. It will appropriate here to reproduce paragraph
Nos.11, 14, 15 and 16 of Mansukhlal D. Jain (supra) which read as under :
11. In order to resolve the controversy posed for our
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consideration, it will be appropriate to note the relevant
statutory provision having a direct bearing on this question.
Section 41(1) of the Small Causes Courts Act reads as under :
"41(1). Notwithstanding anything contained
elsewhere in this Act or in any other law for the
time being in force but subject to the provisions of
Sub- section (2), the Court of Small Causes shall
have jurisdiction to entertain and try all suits and
proceedings between a licensor and licensee, or a
landlord and tenant, relating to the recovery of
possession of any immovable property situated in
Greater Bombay, or relating to the recovery of the
license fee or charges of rent thereof, irrespective of
the value of the subject matter of such suits or
proceedings."
XXXXXXXXXX
14. So far as the first condition is concerned, a
comprehensive reading of the relevant averments in the
plaints in both these cases leaves no room for doubt that the
plaintiffs claim relief on the basis that they are licensees on
monetary consideration and the defendants are the licensors.
The first condition is clearly satisfied. Then remains the
question whether the third condition, namely, that the suits
must relate to the recovery of possession of immovable
property situated in Greater Bombay is satisfied or not. It is
not in dispute that the suit properties are immovable
properties situated in Greater Bombay but the controversy is
around the question whether these suits relate to recovery of
possession of such immovable properties. The appellants
contended that these are suits for injunction simpliciter for
protecting their possession from the illegal threatened acts of
respondents/defendants. Relying on a series of decision of
this Court and the Bombay High Court, Guttal, J., Pendse, J.
and Daud, J. had taken the view that such injunction suits
can be said to be relating to the possession of the immovable
property. Sawant, J. has taken a contrary view. We shall deal
with these relevant decisions at a later stage of this judgment.
However, on the clear language of the section, in our view, it
cannot be said that these suits are not relating to the
possession of the immovable property. It is pertinent to note
that Section 41(1) does not employ the words "suits and
proceedings for recovery of possession of immovable
property". There is a good deal of difference between the
words "relating to the recovery of possession" on the one
hand and the terminology "for recovery of possession of any
immovable property". The words "relating to" are of wide
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import and can take in their sweep any suit in which the
grievance is made that the defendant is threatening to
illegally recover possession from the plaintiff-licensee. Suits
for protecting such possession of immovable property against
the alleged illegal attempts on the part of the defendant to
forcibly recover such possession from the plaintiff, can clearly
get covered by the wide sweep of the words "relating to
recovery of possession" as employed by Section 41(1). In this
connection, we may refer to Blacks' Law Dictionary, Super
Deluxe 5th Edition. At page 1158 of the said Dictionary, the
term "relate" is defined as under:
"to stand in some relation; to have bearing or
concern; to pertain; refer; to bring into association
with or connection with; 'with to'."
It cannot be seriously disputed that when a plaintiff-licensee
seeks permanent injunction against the defendant-licensor
restraining the defendant from recovering the possession of
the suit property by forcible means from the plaintiff, such a
suit does have a bearing on or a concern with the recovery of
possession of such property. In the case of Renusagar Power
Company Ltd. v. General Electric Co. a Division Bench of this
Court had to consider the connotation of the term "relating
to", Tulzapukar, J. at Page 471 of the report has culled out
propositions emerging from the consideration of the relevant
authorities. At page 471 proposition 2 has been mentioned as
under :
"Expressions such as "arising out of" or "in respect
of" or "in connection with" or "in relation to" or "in
consequence of" or "concerning" or "relating to" the
contract are of the widest amplitude and content
and include even questions as to the existence,
validity and effect (scope) of the arbitration
agreement."
15. In Doypack Systems (P) Ltd. v. Union of India,
another Division Bench of this Court consisting of Sabyaschi
Mukherji (as he then was) and G.L. Oza, JJ., had an occasion
to consider this very question in connection with the
provisions of Sections 3 and 4 of the Swadeshi Cotton Mills
Co. Ltd. (Acquisition and Transfer of Undertakings) Act,
1986. Sabyaschi Mukherji, J. speaking for the Court, has
made the following pertinent observations in paragraphs 49
and 50 of the report:
"The words "arising out of" have been used in the
sense that it comprises purchase of shares and
lands From income arising out of the Kanpur
undertaking. We are of the opinion that the words
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"pertaining to" and "in relation to" have the same
wide meaning and have been used interchangeably
for among other reasons, which may include
avoidance of repetition of the same phrase in the
same clause or sentence, a method followed in
good drafting. The word "pertain" is synonymous
with the word "relate", see Corpus Juris
Secundum, Volume 17, Page 693. The expression
"in relation to" (so also "pertaining to"), is a very
broad expression which presupposes another
subject matter. These are words of
comprehensiveness which might have both a direct
significance as well as an indirect significance
depending on the context, see State Wakf Board v.
Abdul Azeez, following and approving Nitai Charan
Bagchi v. Suresh Chandra Paul, Shyam Lal v. M.
Shyamlal and 76 Corpus Juris Secundum 621.
Assuming that the investments in shares and in
lands do not form part of the undertakings but are
different subject matters, even then these would be
brought within the purview of the vesting by
reason of the above expressions. In this connection
reference may be made to 76 Corpus Juris
Secundum at pages 620 and 621 where it is Stated
that the terms "relate" is also defined as meaning to
bring into association or connection with. It has
been clearly mentioned that "relating to" has been
held to be equivalent to or synonymous with as to
"concerning with" and "pertaining to". The
expression "pertaining to" is an expression of
expansion and not of contraction."
16. It is, therefore, obvious that the phrase 'relating to
recovery of possession' as found in Section 41(1) of the Small
Causes Court Act is comprehensive in nature and takes in its
sweep all types of suits and proceedings which are concerned
with the recovery of possession of suit property from the
licensee and, therefore, suits for permanent injunction
restraining the defendant from effecting forcible recovery of
such possession from the licensee-plaintiff would squarely be
covered by the wide sweep of the said phrase. Consequently
in the light of the averments in the plaints under
consideration and the prayers sought for therein, on the clear
language of Section 41(1), the conclusion is inevitable that
these suits could lie within the exclusive jurisdiction of Small
Causes Court, Bombay and the City Civil Court would have
no jurisdiction to entertain such suits.
(emphasis supplied)
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11. The Hon'ble Apex Court in the case of Rajinder Singh (supra)
held that the expression "in connection with" is of widest amplitude and
content.
12. The Queen's Bench Division (Admiralty Court) in " The Conoco
Britannia" (supra) held that as long as the subject matter of the claim is a
maritime claim any indemnity claim in respect of the same would also be a
maritime claim. That was the case where plaintiff had supplied a tug by
name Hullman in order to render towage services to defendants' tanker
Conoco Arrow. The contract included a provision for an indemnity in case
of loss or damage to the tug. Conoco Arrow collided with Hullman in the
river Humber. Some of her crew were also lost. Plaintiffs brought an action
in rem under the Administration of Justice Act, 1956 against three vessels
which were sister ships of Conoco Arrow for various claims including in
indemnity for the claim of the owners of Hullman in respect of the loss and
damages sustained by the owners by the reason of the collision between
Hullman and Conoco Arrow. Plaintiffs made their claim under various
provisions of Section 1 of the Administration of Justice Act, 1956.
Defendants applied for the writ to be set aside and contended
that the Court had no jurisdiction to entertain the claims for they did not
fall within pars. (d), (e), (h), or (k) of sect. 1(1) of the Administration of
Justice Act, 1956, which stated (inter alia) :
The Admiralty jurisdiction of the High Court shall be as follows,
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that is to say, jurisdiction to hear and determine any of the following
questions or claims :
xxxxxxxx
(d) any claim for damage done by a ship;
(e) any claim for damage received by a ship;
(h) any claim arising out of an agreement relating to the carriage of
goods in a ship or to the use or hire of a ship;
(k) any claim in the nature of towage in respect of a ship or an
aircraft.
Plaintiff argued that their claims come within clause (h), i.e.,
"any claim arising out of ......... use of or hire of a ship", viz., tug Hullman.
Defendants argued that the words "relating to the use or hire of a ship"
should be construed "ejusdem generis" with the preceding words in
paragraph (h) "relating to the carriage of goods in a ship" and should
accordingly be given a narrow construction which would not cover the case
of a towage contract under which a tug is hired to attend on and assist a
ship. The court held that there was no reason for giving a restricted
meaning to the words "relating to the use or hire of a ship". The court held
the words in their ordinary and natural meaning are amply wide enough to
cover a case of hire of a tug under towage contract.
13. Mr. Kapadia accepted that the words "arising out of" and "in
connection with" may imply for giving a wider meaning but added, that
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cannot be stretched to an extent that a third party, as the agent in this case,
gets a right to have a maritime claim over the port dues in addition to port
itself having such a right. We do not agree with Mr. Kapadia. We say this
because, otherwise, there was no need to use the words "arising out of ......
dues in connection with port" or "...... arising out of ....... services rendered
to the vessel for its operation ......." or "....... arising out of ........
disbursements incurred". If a narrow meaning has to be given and not their
ordinary and natural meaning which are wide, it would have employed the
words "arising out of". Then Section 4(1) of the Admiralty Act would have
read "The High Court may exercise jurisdiction to hear and determine a
maritime claim, against any vessel ........, (l) for goods, materials .........
services rendered to the vessel ..........., (n) for dues of port ........ or
charges of similar kind ............, (p) for disbursements incurred on behalf
of the vessel or its owners". It will not be so widely worded as Section 4(1)
of the Admiralty Act now in its ordinary and natural meaning reads. The
provisions are wide and comprehensive in nature enough to take in its
sweep an indemnity action of the nature at hand.
14. Nigel Meeson8 in Admiralty Jurisdiction And Practice opines :
"Liabilities properly incurred by the master on account of the
ship, and which it is clear he has rendered himself liable to
discharge will be allowed against the owners even though at
the time of the claim they may not actually have been
discharged".
8 Paragraph 2.131 - Fourth Edition
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15. In Gajanan Moreshwar Parelkar (supra) submissions of
defendant that unless and until the indemnified has suffered a loss is not
entitled to sue indemnifier was rejected. The court held as under :
It is true that under the English common law no action could
be maintained until actual loss had been incurred. It was very
soon realized that an indemnity might be worth very little
indeed if the indemnified could not enforce his indemnity till
he had actually paid the loss. If a suit was filed against him,
he had actually to wait till a judgment was pronounced, and
it was only after he had satisfied the judgment that he could
sue on his indemnity. It is clear that this might under certain
circumstances throw an intolerable burden upon the
indemnity-holder. He might not be in a position to satisfy the
judgment and yet he could not avail himself of his indemnity
till he had done so. Therefore the Court of equity stepped in
and mitigated the rigour of the Common Law. The Court of
equity held that if his liability had become absolute then he
was entitled either to get the indemnifier to pay off the claim
or to pay into Court sufficient money which would constitute
a fund for paying off the claim whenever it was made. As a
matter of fact, it has been conceded at the bar by
Mr.Tendolkar that in England the plaintiff could have
maintained a suit of the nature which he has filed here; but,
as I have pointed out, Mr. Tendolkar contends that the law in
this country is different. I have already held that ss. 124 and
125 of the Indian Contract Act are not exhaustive of the law
of indemnity and that the Courts here would apply the same
equitable principles that the Courts in England do. Therefore,
if the indemnified has incurred a liability and that liability is
absolute, he is entitled to call upon the indemnifier to save
him from that liability and to pay it off.
(emphasis supplied)
16. The Division Bench of this court in Khetarpal Amarnath (supra)
in paragraph no. 4 held as under :
With respect, we think that the general observations made in
the course of the judgment, which suggest that under a
contract of indemnity the cause of action arises when the
damage which the indemnity is intended to cover is suffered
and that a suit brought before actual loss accrues is
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premature, must be regarded as 'obiter'. The question as to
whether the provisions contained in s. 125 of the Indian
Contract Act exhaustively dealt with the rights of the
indemnity-holder and the remedies available to him does not
appear to have been argued before the Court, and indeed on
the facts found by the Court the question which really arose
for the decision of the Court lay within a narrower compass.
We are, therefore, disposed to take the view that the rights of
the indemnity-holder should not and need not be confined to
those mentioned in s. 125 of the Indian Contract Act. Even
before damage is incurred by the indemnity-holder, it would
be open to him to sue for the specific performance of the
contract of indemnity, provided of course it is shown that an
absolute liability has been incurred by him and that the
contract of indemnity covers the said liability. We may point
out that the view which we are disposed to take in this matter
has been taken by the High Courts of Calcutta, Madras and
Allahabad (vide 'Kumar Nath Bhuttacharjee v. Nobo Kumar
Bhuttacharjee', Ramalingathudayan v. Unnamalai Achi' and
'Shiam Lal v. Abdul Salam) and has besides received the
approval of the commentators in Pollock and Mulla's Indian
Contract Act.
(emphasis supplied)
Therefore, there was no need to pay off the claim before suing
the indemnifier. Only requirement is the indemnified should be able to
show that absolute liability has been incurred by him.
17. In M.V. Dhanlakhsmi (supra) the learned single Judge of this
court in paragraph nos.25 and 26 held as under :
25. A common thread which runs through all these
judgments is as to when such a suit on the breach of
indemnity can be filed and it has been held that, though,
under common law, a suit on the indemnity can be filed only
after plaintiff suffers an actual loss, in equity, the
person entitled to be indemnified, may enforce his right as
soon as the liability to the third party arises and, therefore, he
can obtain relief before he has actually suffered a loss. The
gravamen of the argument made by the learned Counsel
appearing on behalf of the defendants was that the actual loss
which was likely to be suffered by the plaintiff was not
quantified since the arbitration proceedings were pending in
London and as long as the said loss was not quantified by the
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order passed in the arbitration proceedings, the plaintiff was
not entitled to file a suit under the admiralty jurisdiction
since the time had not become ripe and it was, therefore,
premature to file the suit under the admiralty jurisdiction
based on such a claim and, therefore, the liability had not
become absolute.
26. I am afraid that this submission cannot be accepted.
The judgments on which reliance is placed by the learned
Counsel for the defendants do not support this submission.
Perusal of the judgments clearly indicate that the party who is
relying on the indemnity could very well file a suit even
before it had actually suffered a loss. In the facts of the
present case, the plaintiff had to give security and the
proceedings were taken out in New York under Rule 9(h) of
the Federal Rules of Civil Procedure and, thereafter,
arbitration proceedings were initiated in London and a
definite claim had been made. Therefore, even otherwise, it
cannot be said that the claim was premature and had not
been crystalised. The plaintiff has come to this Court with a
specific case that in view of clause 16 of the charter party
agreement, the defendants had clearly indemnified and
promised to bear losses which would be caused as a result of
damage caused by the ship of the defendants. The wording of
clause 16, therefore, clearly indicates that the liability is
absolute and unconditional and, therefore, the plaintiff was
entitled to file a suit under the admiralty jurisdiction and seek
an order for arrest of the ship. The submission of the learned
Counsel appearing on behalf of the defendants that this Court
does not have jurisdiction to entertain the claim of the
plaintiff on indemnity and that an action in rem
should not be invoked on a claim of indemnity also cannot be
accepted.
(emphasis supplied)
Therefore, as held in M.V. Dhanlakhsmi (supra) and the
"Conoco Britannia" (supra), as long as the subject matter of claim is a
maritime claim, any indemnity claim in respect of the same would also be a
maritime claim.
18. Therefore, considering the nature of the claim of Respondent
No.1, the claim of Respondent No.1 would fall under clause (l), (n) and also
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(p) of Section 4(1) of the Admiralty Act.
19. Therefore, the submissions of appellant that Respondent No.1's
claim being a claim in the nature of indemnity would not be a maritime
claim has to be rejected.
20. As regards Mr. Kapadia's submissions that both an agent of the
vessel and the port cannot maintain an action simultaneously, on first blush
looks interesting. But that is a non-starter when we have held that an
indemnity action is maintainable. Moreover, both are separate causes of
action available to both parties, one in the nature of a maritime claim
(agent's claim) and the other a maritime lien (port's claim) or under Section
64 of The Major Port Trusts Act, 1963.
21. Coming to the amount having been paid to the port in the sum
of Rs.1,31,27,146/-, the Hon'ble Apex Court, as per its order quoted above,
left it to the learned single Judge to consider whether the claim of the port
was entitled to receive the requisite part of the security amount deposited
by appellant. Therefore, the learned single Judge was correct in deciding
the same. The learned single Judge considered all the admissions made by
appellant (some have been noted earlier by us) to pay port dues and
charges and directed release of the amount. Hence, we find no reason to
interfere.
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22. At the same time we accept the without prejudice undertaking
made by Mr. Rambhadran on behalf of the port that if at any stage during or
after the trial in the suit port is directed to bring back any amount to the
court, port will bring back the amount.
23. Therefore, Appeal No. 55 of 2022 stands dismissed.
24. Mr. Rambhadran and Mr. Rajasekhar are pressing for costs. In
fact, at the beginning when we had made it clear to Mr. Kapadia that we
would be imposing costs on the losing party and if appellant ended up as
the losing party how would they secure the costs, Mr. Kapadia stated that
the amount deposited by appellant in the court or whatever surplus from
the sale proceeds is available could be paid over to Respondent No.1 and
Respondent No.2, if appellant looses.
Appellant having lost and this being a Commercial Appeal, costs
have to be imposed. We direct costs of Rs.7,50,000/- (Rupees Seven Lakhs
Fifty Thousand only) each be paid to Respondent No.1 and Respondent
No.2. If within two weeks the amount is not paid by appellant to the
respective advocates of Respondent No.1 and Respondent No.2, they may
apply to the Prothonotary and Senior Master/Admiralty Registrar of this
court to be paid over this amount from the surplus of the amount of
Rs.1,50,00,000/- (Rupees One Crore Fifty Lakhs only) that was deposited by
appellant pursuant to the order of the Hon'ble Apex Court.
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COMMERCIAL APPEAL NO. 12 OF 2023
25. Mr. Kapadia had made a statement that he is not pressing the
appeal in which learned single Judge's decision to allow the Interim
Application of the auction procedure namely Interim Application (L) No.
7724 of 2021 was allowed. Hence, we are not considering the same and
dispose it.
26. Therefore, Appeal No. 12 of 2023 stands dismissed.
27. Consequently, all Interim Applications also stand disposed.
(RAJESH S. PATIL, J.) (K.R. SHRIRAM, J.)
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