Bombay High Court
Iss Shipping India Pvt Ltd vs M. V. Karnika (Imo 8521220) on 2 May, 2024
Author: R.I. Chagla
Bench: R.I. Chagla
2024:BHC-OS:7219
14-IA 4500.2022 in COMAS 40.2022.doc
Kavita S.J.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ADMIRALTY AND VICE ADMIRALTY JURISDICTION
INTERIM APPLICATION NO.4500 OF 2022
IN
COMMERCIAL ADMIRALTY SUIT NO.40 OF 2022
ISS Shipping India Private Limited ...Applicant/
Plaintiff
Versus
MV KARNIKA (IMO NO. 8521220) & Anr., ...Defendants
AND
COMMERCIAL ADMIRALTY SUIT NO.40 OF 2022
----------
Mr. Prathamesh Kamat a/w Mr. Ashwini Sinha i/b Adil Patel for the
Plaintiff.
None for the Respondents/Defendants.
----------
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.
14-IA 4500.2022 in COMAS 40.2022.doc
2. The Applicant has instituted the present Suit, seeking a decree
in rem against the Defendant Vessel for an aggregate sum of USD
7,424,690 (i.e. US $ 7,360,243 towards the principal claim + interest
@ 5% pa on US $ 7,360,243 + US $ 15,000 being the legal costs)
which includes the claim in Indemnity in the sum of USD 5,126,050
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 Mumbai Port 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
14-IA 4500.2022 in COMAS 40.2022.doc
disbursements, therefore, the Applicant was asked to incur these
payments for and on his behalf.
4. On 29th/30th April 2019, Owners of the Defendant Vessel
approached the Applicant wanting to engage the Applicant as their
agents in the Port of Mumbai, India and signed a Memorandum of
Agreement. The Applicant accordingly commenced and continued
acting as agents for Owners of the Defendant vessel when she would
call at the port of Mumbai, India 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 1st January 2020, the owners of the Defendant
Vessel vide its email responded to the Applicant's email, inter alia,
informing that the Mumbai port has been responded to and taken
14-IA 4500.2022 in COMAS 40.2022.doc
care of.
6. On 2nd January 2020, The owners of the Defendant Vessel vide
its email forwarded to the Applicant their scanned letter to MbPT
seeking time till 10th January 2020 to clear the port charges. On 10 th
February 2020,the owners of the Defendant vessel kept assuring the
Applicant that the Applicant's outstanding would be cleared and also
advised MbPT that their representative had visited and met the
offices of the Mumbai Port Trust and requested time until 15 th
February 2020 for clearing the port outstanding and that they were
dealing with this issue on a top level priority and will resolve it asap.
7. On 13th February 2020, the owners of the Defendant vessel
wrote to MbPT and assuring them that the necessary funding has
been organized and sought time until 29 th February 2020 to pay the
Port Trust's outstanding charges.
8. 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
14-IA 4500.2022 in COMAS 40.2022.doc
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.
9. 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.
10. 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 USD 7,424,690 (i.e. US $ 7,360,243 towards the
principal claim + interest @ 5% pa on US $ 7,360,243 + US $
15,000 being the legal costs) which includes the claim in Indemnity
in the sum of USD 5,126,050 for the services and necessaries
rendered by the Applicant.
14-IA 4500.2022 in COMAS 40.2022.doc
11. 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.
12. 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.
13. 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
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
14-IA 4500.2022 in COMAS 40.2022.doc
their Written Statement and further, they abandoned the vessel. The
instant Suit will proceed ex-parte against them.
14. I have heard Mr. Kamat, the learned Counsel for the Applicant-
the Plaintiff.
15. 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
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.
14-IA 4500.2022 in COMAS 40.2022.doc
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)."
16. The aforesaid pronouncement has been followed by this Court
in the case of Anand Prakash Gupta and others vs. Sale Proceeds of
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
14-IA 4500.2022 in COMAS 40.2022.doc
the defendant vessel, for enforcement of its claim.
17. 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
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
14-IA 4500.2022 in COMAS 40.2022.doc
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.
18. 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.
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
14-IA 4500.2022 in COMAS 40.2022.doc
the Applicant/Plaintiff's claim.
19. 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.
20. 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 $ 7,360,243 along with interest @ 5% p.a. on US $
7,360,243 from the date of the suit till realization including
the claim in Indemnity in the sum of USD 5,126,050.
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.]
