Bombay High Court
Inchcape Shipping Services Abu Dhabi ... vs M. V .Karnika on 2 May, 2024
Author: R.I. Chagla
Bench: R.I. Chagla
2024:BHC-OS:7216
11-IA 4913.22 in COMAS 25.2022.doc
Kavita S.J.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ADMIRALTY AND VICE ADMIRALTY JURISDICTION
INTERIM APPLICATION NO.4913 OF 2022
IN
COMMERCIAL ADMIRALTY SUIT NO.25 OF 2022
INCHCAPE SHIPPING SERVICES ABU DHABI LLC ...Applicant/
Plaintiff
Versus
MV KARNIKA (IMO NO. 8521220) ...Defendants
AND
COMMERCIAL ADMIRALTY SUIT NO.25 OF 2022
----------
Mr. Prathamesh Kamat a/w Mr. Ashwini Sinha i/b Adil Patel for the
Applicant/Plaintiff.
None for the Respondent/Defendant.
----------
CORAM : R.I. CHAGLA, J.
DATED : 2nd MAY, 2024.
ORDER :
1. This is an application for summary judgment under order XIII-
KAVITA
A and Order XII Rule 6 of the Code of Civil Procedure 1908 ("the
SUSHIL
JADHAV
Code") against the sales proceeds of M.V. Karnika (IMO No.
8521220), the Defendant.
11-IA 4913.22 in COMAS 25.2022.doc
2. The Applicant has instituted the present Suit, seeking a decree
in rem against the Defendant Vessel for an aggregate sum of US $
205,901 (i.e. US $ 181,134 towards the principal claim + US $ 9,767
being interest @ 5% pa on US $ 181,134 + US $ 15,000 being the
legal costs) for the services and necessaries rendered by the
Applicant.
3. I have perused the averments of the Plaint as well as the
Interim Application. Jalesh Cruises Mauritius Limited was the owner
of M.V. Karnika ("Owners"). The Applicant was appointed as the
Agent of the Defendant Vessel in in Abu Dhabi, UAE by her erstwhile
owners, i.e. Jalesh Cruises Mauritius Limited. The Applicant had
provided various services including Agency Service to the Defendant
vessel and has incurred expenses by making payments to various
authorities, vendors, etc. for and on behalf of the Defendant Vessel at
the instance of its owners. The Owners of the Defendant Vessel have
failed to pay the agency fee as well as reimburse the amounts
incurred by the Applicant as agents for and on behalf of the
Defendant Vessel including payments to various authorities, vendors
etc. at the instance and request and for and on behalf of the Master
of the Defendant vessel. The Master had no money towards its
11-IA 4913.22 in COMAS 25.2022.doc
disbursements, therefore, the Applicant was asked to incur these
payments for and on his behalf.
4. In August and September 2019, Owners of the Defendant
Vessel approached the Applicant wanting to engage the Applicant as
their agents in the Middle East for the port of Abu Dhabi, UAE. The
Applicant accordingly commenced and continued acting as agents for
Owners of the Defendant vessel when she would call at the port of
Abu Dhabi, UAE and rendered all the necessary services and
necessaries to her from time to time and making disbursement for
and on behalf of the Defendant Vessel/ it's Master/ Owner.
5. The Applicant periodically raised various invoices to Owners of
the Defendant Vessel most of which remained unpaid. The Applicant
repeatedly called upon the Owners of the Defendant vessel to settle
their dues and outstanding. In fact, on 14 th November 2019, Owners
of the Defendant Vessel vide its email to the Applicant, inter alia,
informed that the outstanding bill would be settled by the end of
November 2019. On 4th December 2019, the Applicant vide its email
to the Owners of the Defendant Vessel, inter alia, advised them of
having received a small sized payment of US $ 35,000, but drew their
attention to the fact that a sum of US $ 3.392 million was
11-IA 4913.22 in COMAS 25.2022.doc
outstanding.
6. On 5th January 2020, in a meeting that took place between the
representatives of the Owners of the Defendant Vessel and the
Applicant, the Applicant was assured that its dues would be paid off
immediately upon the Owners receiving investment loans, etc. On
10th January 2020, one Swiss Alpha Management on behalf of the
Owners of the Defendant Vessel advised the Applicant that they had
contracted to loan to the owners of the Defendant vessel a sum of
US$ 100 million, and the delay in drawing down the loan was
unrelated to the owners of the Defendant vessel. They assured that
the Applicant could expect to see release of funds within the coming
10 days.
7. Till March 2020, the Owners of the Defendant Vessel kept
assuring that the Applicant's dues would be cleared. On 9 th March
2020, the Owners of the Defendant Vessel forwarded to the Applicant
an email informing that they have reached an Agreement with
reference to the overdue funding and that they are expected to
receive the first funds in the next 2-3 days thereby assuring that they
will pay the Applicant's dues accordingly.
11-IA 4913.22 in COMAS 25.2022.doc
8. In view of dues not having been paid, the Applicant instituted
the present Suit, seeking a decree against the Defendant Vessel for an
aggregate sum of US $ 205,901 (i.e. US $ 181,134 towards the
principal claim + US $ 9,767 being interest @ 5% pa on US $
181,134+ US $ 15,000 being the legal costs) for the services and
necessaries rendered by the Applicant.
9. Eventually, by an order dated 28 th October 2020, passed by this
Court in Comm. Adm. Suit (L) No. 3579 of 2020, the Defendant
Vessel came to be sold.
10. The Applicant has taken out this application with the assertion
that the Applicant has a maritime claim which is in the nature of a
maritime lien. Mr. Kamat asserts that the liability is admitted and
there is no real prospect of successfully defending the
Applicant/Plaintiff's claim which is in rem.
11. Further, the Applicant's Suit against the Respondent will
proceed ex-parte against the sale proceeds of Respondent/Defendant
vessel MV KARNIKA which was sold by this Court. The learned
Advocate appearing for the Defendant vessel entered appearance in
this Suit on behalf of her Owners, waiving service of the Writ of
11-IA 4913.22 in COMAS 25.2022.doc
Summons. A copy of the Judge's Order and Plaint was duly served
upon her vide email dated 12th December 2020 and the same was
acknowledged by her. On 15th February 2021, the Advocate for the
Defendant vessel sent an email, inter alia, to the Advocates for the
Applicant advising that she was no longer acting for the
Administrator of Jalesh Cruises Mauritius Limited, the owners of the
Defendant vessel. The owners of the Defendant vessel failed to file
their Written Statement and further, they abandoned the vessel. The
instant Suit will proceed ex-parte against them.
12. I have heard Mr. Kamat, the learned Counsel for the Applicant-
Plaintiff.
13. Since, the Plaintiff - Applicant seeks a decree against sale
proceeds of the defendant vessel, in rem, it is necessary to consider
the tenability of the action. Mr. Kamat submitted that the instant
action against the sale proceeds is in rem. It is not obligatory for a
person having a maritime claim against the vessel to proceed against
the owner and manager of the vessel. Mr. Kamat sought to draw
support to the aforesaid submission from the judgment of this Court
in the case of Board of Trustees of Port of Mumbai/Raj Shipping
Agencies Vs. Barge Madhwa and another reported in 2020 SCC
11-IA 4913.22 in COMAS 25.2022.doc
Online Bom 651,wherein, elucidating the nature of an action in rem
this Court observed as under:
"21. Action in rem is against the ship and not the owner 22. A
ship or a vessel as commonly referred to is a legal entity that
can be sued without reference to its owner. The purpose of an
action in rem against the vessel is to enforce the maritime
claim against the vessel and to recover the amount of the claim
from the vessel by an admiralty sale of the vessel and for
payment out of the sale proceeds. It is the vessel that is liable
to pay the claim. This is the fundamental basis of an action in
rem. The Claimant is not concerned with the owner and
neither is the owner a necessary or proper party. The presence
of the owner is not required for adjudication of Plaintiff's
claim. That is why no writ of summons is required to be served
on the owner of the vessel. The service of the warrant of arrest
on the vessel is considered sufficient. 23. For the purpose of an
action in rem under the Admiralty Act, the ship is treated as "a
separate juridical personality, an almost corporate capacity,
having not only rights but liabilities (sometimes distinct from
those of the owner)" - (M.V. Elisabeth and Ors. V/s. Harwan
Investments and Trading Pvt. Ltd.).
24. .....
25. The fundamental legal nature of an action in rem as
distinct from its eventual object is that it is a proceeding
against res. Thus, when a ship represents such res as is
frequently the case, the action in rem is an action against the
ship itself. The action is a remedy against the corpus of the
offending ship. It is distinct from an action in personam which
is a proceeding inter-partes founded on personal service on
Defendant within jurisdiction, leading to a judgment against
the person of the Defendant. In an action in rem no direct
demand is made against the owner of the res personally
(Maritime Liens by D R Thomas, Volume 14, British Shipping
Laws)."
14. The aforesaid pronouncement has been followed by this Court
in the case of Anand Prakash Gupta and others vs. Sale Proceeds of
11-IA 4913.22 in COMAS 25.2022.doc
Uma Prem and others reported in MANU/MH/1135/2020 and in an
unreported Judgment of this Court dated 29 th November 2022, in
Angre Port Private Limited v. Sale Proceeds of GP Asphalt I [IMO No.
9120891]. In view of the aforesaid enunciation, the Plaintiff /
Applicant is entitled to proceed in rem against the sale proceeds of
the defendant vessel, for enforcement of its claim.
15. The substance of the Applicant's claim is that despite providing
services to the Defendant Vessel and despite granting sufficient time,
Owners of the Defendant Vessel have failed and neglected to pay the
sums due to the Applicant. In fact, Owners of the Defendant Vessel
have acknowledged the claim of the Applicant in various
correspondences time and again, has clearly admitted their liability
and had in fact sought time to clear the same on various occasions.
The Applicant's claim is a maritime claim within the meaning of
Section 4(l) and 4 (t) of the Admiralty (Jurisdiction) and Settlement
of Maritime Claims) Act 2017. The Applicant is entitled to proceed in
rem against Defendant vessel and its sale proceeds for enforcing its
rights and claims. The services and necessaries provided by the
Applicant are essential for the operation and maintenance of the
vessel to trade in commerce and remain seaworthy. Without these
services and supplies, the vessel would not have been in a position to
11-IA 4913.22 in COMAS 25.2022.doc
operate. The supplies and services were not done with a gratuitous
intention and the vessel has availed of the supplies and services and
acknowledged them and the Defendant/Respondent is liable to make
payment in respect thereof. Thus, the Applicant has a maritime claim
towards its claim for services provided to the vessel and maritime lien
under common law for expenses incurred by the Plaintiff for and on
behalf of the Master/ owner against the Defendant vessel and its sale
proceeds which are lying in this Court.
16. In the aforesaid context, I have perused the averments in the
plaint and the Interim Application. The Applicant/Plaintiff's claim
that it had provided services to the Defendant Vessel is substantiated
by its invoices. The fact that the Applicant/Plaintiff rendered services
to the Defendant Vessel is incontestable. It further appears that the
Applicant/Plaintiff made several demands for payment of its dues. In
response thereto, Owners of the Defendant Vessel have acknowledged
the claim of the Applicant/Plaintiff in various correspondences time
and again, has clearly admitted their liability and had in fact sought
time to clear the same on various occasions. However, despite several
promises, Owners of the Defendant Vessel have failed in their
obligations to pay to the Applicant/Plaintiff their legitimate dues.
11-IA 4913.22 in COMAS 25.2022.doc
Pertinently, at no point in time till date has the Owners of Defendant
vessel ever disputed liability towards the Applicant/ Orig. Plaintiff.
Not a single invoice was disputed in fact, it advises to make payment
to the Applicant/ Plaintiff at the earliest . Thus, there is no dispute to
the Applicant/Plaintiff's claim.
17. In the circumstances of the case, it does not appear that that
the Defendant has any real prospect of successfully defending the
Plaintiff's claim, which is supported by documents of unimpeachable
character. Nor there is any compelling reason not to dispose of the
claim without leading evidence.
18. Hence, the following order:
: ORDER :
I. The application stands allowed.
II. There shall be a summary judgment and decree in favour of
the Applicant against the sale proceeds of M.V. Karnika in the
sum of US $ 181,134 along with interest @ 5% pa on US $
181,134 from the date of the suit till realisation.
III. The Applicant/Plaintiff is entitled to costs of USD 15,000.
IV. The suit stands decreed in the aforesaid terms.
V. Drawn up decree dispensed with.
VI. The Interim Application is disposed of accordingly.
[R.I. CHAGLA, J.]
