Calcutta High Court
Hindustan Aegis Lpg Ltd vs The Owners And Partners ... on 2 November, 2023
OD-1
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
ORIGINAL SIDE
APOT/413/2023
WITH AS/5/2023
IA NO. GA/1/2023, GA/2/2023
HINDUSTAN AEGIS LPG LTD.
VS
THE OWNERS AND PARTNERS INTERESTED IN
THE VESSEL MT TSM POLLUX (IMO NO. 9266889)
BEFORE :
THE HON'BLE JUSTICE SABYASACHI BHATTACHARYYA
AND
THE HON'BLE JUSTICE PARTHA SARATHI CHATTERJEE
Date : 2nd November, 2023
(Vacation Bench)
Appearance :
Mr. Amitesh Banerjee, Sr. Adv.
Mr. K.R. Thaker, Adv.
Ms. Tannya Baranwal, Adv.
Mr. Prathamesh Kamat, Adv.
Mr. Nooruddin Dhilla, Adv.
Mr. Dharmesh Singh Chauhan, Adv.
Mr. Shahrukh Raja, Adv.
...for the appellant
Mr. V.K. Ramabhadhran, Sr. Adv.
Mr. Subhojit Roy, Adv.
Mr.Deepnath Roy Chowdhury, Adv.
Mr. Rohit Mukherji, Adv.
Mr. Ramanuj Raychaudhuri, Adv.
Mr. Aditya Sarkar, Adv.
...for the defendant
The Court : The present appeal arises out of an order dated October
19, 2023, modifying a previous order dated September 15, 2023 by which
the concerned vessel MT TSM Pollux (IMO No. 9266889) along with her
tackle, hull, engine, equipment, apparels, furniture and all movables lying
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on board was directed to be arrested forthwith. The said order was to
continue unconditionally till September 27, 2023. If in the meantime, the
plaintiff filed an undertaking in terms of Section 11 of the Admiralty
(Jurisdiction and Settlement of Maritime Claims) Act, 2017 to the effect as
envisaged therein, the order of arrest was to continue until further orders.
It may be mentioned that the plaintiff/appellant has complied with
such direction by filing the said undertaking.
It was further clarified in the order dated September 15, 2023 that in the
event the defendant deposits an aggregate amount of USD 506,161 and Rs.
84,00,67,559/- in the suit as security with the Registrar, Original Side of
this Court, the order of arrest of the vessel shall stand automatically
vacated.
By the order impugned in the present appeal dated October 19, 2023,
the learned Single Judge directed the defendant to deposit only
Rs.4,77,70,265.93 as security with the Registrar, Original Side of this Court,
instead of the total amount as directed vide order dated September 15,
2023.
Learned Senior Counsel appearing for the appellant contends
primarily that the learned Single Judge, while passing the impugned order
dated October 19, 2023, proceeded on an erroneous premise that the only
documents disclosed were invoices raised by the appellant on account of
bottling and throughput charges but the plaintiff had not disclosed any
agreement with HPCL and the invoices disclosed did not refer to any
particular berth, for example, HOJ-I or HOJ-II. It is required to be clarified
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here that HOJ-I refers to Haldia Oil Jetty - I and HOJ-II refers to Haldia Oil
Jetty - II respectively.
It was further observed that the entire projected loss of income for one
year consequential to the damage of the loading/unloading arm of HOJ-I
where the accident occurred is based on unsubstantiated figures. The
learned Single Judge further observed that the plaint does not plead duty of
care owed by the applicant owner to the plaintiff and the pleadings in the
plaint suggest that the defendant was discharging cargo for HPCL, which is
incorrect.
Despite observing that a claim for compensation or damages would
have to meet the standard test of a reasonably best arguable case at the
interim stage, the learned Single Judge observed that the plaintiff had not
been able to substantiate its claim for business losses.
Learned Senior Counsel for the appellant places reliance on the
averments made in the plaint as well as the documents annexed thereto,
which include several invoices for a period of one year immediately prior to
the claim being made. It is argued that the said invoices clearly show the
income earned by the appellant from the business which was being done by
the appellant by operation of twin 'arms' of the appellant in HOJ-I and HOJ-
II respectively.
Thus, it is argued that the plaintiff sufficiently substantiated its claim
for damages on account of business loss for the projected period of one year,
which would be the requisite period for replacing the arm which was broken
due to alleged negligence of the defendant.
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It is argued that the plaintiff also substantiated the case of damage in
so far as it is an admitted position that the vessel of the defendant was
plying in the said port at the relevant juncture and it was going to unload its
cargo at HOJ-I.
While so plying, the boom of the crane on board the vessel of the
defendant was kept in an obtuse angle, projecting out of the body of the
vessel, and not in a right angle, properly parked on the said vessel. Due to
such utter negligence of the defendant, it is argued, one of the arms at HOJ-
I was damaged beyond repair.
Learned Senior Counsel for the plaintiff/appellant also places
reliance on a report given by the manufacturer of the said arm to
substantiate his claim that the said arm cannot be repaired but has to be
replaced. The entire process, it is argued, shall take about one year, which is
also substantiated from such report. In fact, when the arm which has been
damaged was initially procured, the total time taken for transport and
installation of the same was more than 7/8 months.
Learned Senior Counsel argues that, thus, the premise on which the
impugned order was passed is palpably erroneous, since the learned Single
Judge did not take into account the substantial pleadings and materials in
the plaint and annexed to the plaint of the appellant, which bolstered the
claim of the plaintiff.
That apart, it is argued that the learned Single Judge also proceeded
on the premise that there were three berths of the appellant. However, it is
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an admitted position that the plaintiff only has a pair of twin arms, one at
HOJ-I and the other at HOJ-II and there is no third arm.
It is argued by learned Senior Counsel appearing for the appellant, by
placing reliance on the judgement of Vohra Sadikbhai & Ors. vs. State of
Gujarat & Ors., reported at (2016) 12 SCC 1, that in a nutshell, what needs
to be examined is as to whether the damage to the property of the appellant
was a result of an inevitable accident or unavoidable accident which could
not possibly be prevented by the exercise of ordinary care, caution and skill
i.e. it was an accident physically unavoidable.
In paragraph 15 of the said judgement, it was observed by relying on
Rylands v. Fletcher that the true rule of law is that the person who, for his
own purpose, brings on his land and collects and keeps there anything
likely to do mischief if it escapes, must kept it in at his peril; and if he does
not do so, is prima facie answerable for all the damage which is the natural
consequence of its escape. It was further observed that the general rule as
stated above seems on principle just.
It was also held that where a wrong has been committed, the
wrongdoer must suffer from the impossibility of accurately ascertaining the
amount of damages.
Learned Senior Counsel further places reliance on Videsh Sanchar
Nigam Ltd. Vs. M.V. Kapitan & Ors., reported at (1996) 7 SCC 127. In the
said judgement it was inter alia observed that the admiralty action is an
action in rem. In the said case, the Division Bench found that the claim was
not vexatious but was triable.
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There was strong evidence to show that at the relevant time the
respondent vessel was within the vicinity of the damaged cable.
The Court went on to observe that the ship was a foreign ship and if it
left the shores of Indian territorial waters it was difficult to get hold of it and
it might not return to the jurisdiction of Indian courts. The claim thereby,
even if successful, would remain inexecutable or land in trouble in private
international law in its enforcement. Under such circumstances, the Court
proceeded to form the opinion that the vessel may be released on condition
of payment of certain sums of money.
It is argued that the same principle ought to be imported in the
present case. Since the plaintiff has made out a sufficiently arguable case
for damages by way of business loss, there was no justifiable reason to deny
the plaintiff of such relief by the impugned order.
Learned Counsel appearing for the respondent places reliance on
Spartan Steel & Alloys Ltd. v. Martin & Co. (Contractors) Ltd. In the said
judgement, it was observed by the court of appeal, that in the said case, the
plaintiff had a factory at Birmingham where they manufactured stainless
steel which obtained electricity by a direct cable from a power station of the
Midland Electricity Board. There was a massive power disconnection for
which damages were claimed by the plaintiff. Such damages against the
contractors were claimed on the ground of negligence. No evidence was
given at the trial. It was observed that the question of recovering economic
loss is one of policy. Whenever the Courts draw line to mark out the bounds
of duty, they do it as matter of policy so as to limit the responsibility of the
defendant. Whenever the Courts set bounds to the damages recoverable -
saying that they are, or are not, too remote - they do it as a matter of policy
so as to limit the liability of the defendant.
By taking a cue from the judgment of Managing Director, Kerala
Tourism reported at 2019(16) SCC 573, learned Counsel highlights that
negligence as a tort is a breach of the duty caused by omission to do
something which a reasonable man would do, or doing something which a
prudent and reasonable man would not do. The element of tort of negligence
consists in- (a) duty of care; (b) duty is owed to the plaintiff; (c) the duty has
been carelessly breached. Negligence, it was observed, does not entail
liability in law to exact the duty in the given circumstances to observe care.
The duty is an obligation recognized by law to avoid conduct fraught with
unreasonable risk or damages.
Thus, it was highlighted that the essential ingredient of a claim of
damages is that the following requirements must be satisfied before a duty
of care is held to exist,
(i) forseeability of the damage;
(ii) a sufficiently proximate relationship between the parties and;
(iii) even where (i) and (ii) are satisfied it must be just and
reasonable to impose such a duty.
Learned Counsel also places reliance on Wander Limited and Another
reported in 1990 (Supp.) SCC 727 where it was observed that the appellate
court will not interfere with the exercise of discretion of the court of first
instance and substitute its own discretion except where the discretion has
been shown to have been exercised arbitrarily or capriciously or perversely
or where the Court has ignored the settled principles of law regulating grant
or refusal of interlocutory injunctions. In order to reiterate the said
proposition, learned Counsel also relies on Punjab and Sind Bank reported
at 2023 SCC OnLine SC 470.
Learned Counsel for the respondent also seeks to distinguish the
judgments cited by the appellant on facts as well as law.
It is contended categorically by learned Counsel for the respondents
that the learned Single Judge was sufficiently justified in passing the
impugned orders by taking note of the fact that the plaintiff had utterly
failed to substantiate its claim for damages on account of business loss.
First, it is argued, in order to ascertain the actual business losses, the
plaintiff was required to produce before the Court materials to substantiate
its claims by segregating between the business done by the twin arms at
HOJ-I and HOJ-II respectively. Despite having sufficient opportunity, it is
argued that the plaintiff failed to do so.
Rather, from the invoices produced along with the plaint, the
plaintiff/appellant clearly indicated that those were raised by the plaintiff for
aggregate work done in respect of both the jetties in general, without
distinguishing between the HOJ-I and HOJ-II. It is argued that unless it is
proved by the plaintiff categorically that different vessels docked at both the
said jetties and were loaded and unloaded simultaneously, the plaintiff's
claim of damages, merely by adopting the device of dividing the total income
of the plaintiff by two, cannot be justified.
By placing reliance on the documents annexed to the vacating
application, learned Counsel for the respondents argues that in fact the
respondents have substantiated that the plaintiffs are earning substantially
from the HPCL from the undamaged twin arm at HOJ-II. Hence, the plinth
of the argument of business loss is not credible.
Learned Counsel further submits that it is the plaintiff who was all
along in possession of relevant documents to indicate the exact transactions
being done by the damaged twin arm and the other twin arm separately.
Since the plaintiffs have deliberately suppressed such transactions, the
learned Single Judge, at the first instance while passing the order of arrest,
was not justified in directing the defendant to secure the damages in lieu of
business loss as well. Hence, in the impugned order dated October 19,
2023, the learned Single Judge rightly distinguished between the cost of
damages with regard to the equipment, transport and installation of the
damaged twin arm on the one hand and business losses sought to be
projected by the plaintiff on the other.
Although detailed arguments are advanced by the parties, the cardinal
premise of the orders at both the instances, while passing the first order of
arrest and while passing the order of vacating the same, remains the same.
Despite the respondents having sought to hit at the root of the claim of
damages of the plaintiff altogether, it transpires from the plaint that
sufficient proximity between the conduct/action of the respondents' vessel
and the damages caused to the twin arm of the plaintiff has been
established prima facie.
The argument of the respondents that liability may be cast on the port
authorities as well, since it was the port's duty to navigate the vessel of the
defendants/respondents properly, cannot be accepted vis-à-vis the nature of
the present allegations.
In the event the vessel of the defendants itself had hit the twin arm,
the said claim might have had some justification. However, in the present
case, the boom of the crane of the defendants' vessel was jutting out
apparently at an obtuse angle from atop the defendant's vessel, which was
plying close to the jetty-in-question at the relevant point of time. During
motion, the damage occurred; as such, prima facie there is sufficient
material in the pleadings and the documents produced by the plaintiff to
indicate that the respondents had duty of care to castigate them in respect
of damages.
Another aspect of the matter cannot be overlooked. The challenge in
the defendant's vacating application was primarily with regard to the
component of business loss in the security directed to be deposited by the
defendant and not the economic loss suffered by the plaintiff for damage
which actually occurred to the equipment and the cost of replacing the
same, including transport, installation etc. Insofar as the premise of the
damages to the equipment is concerned, the same cannot be distinguished
from the premise of the claim for business loss. The plinth of both the
claims is the alleged negligence on the part of the defendants and the right
of the plaintiff to claim damages from the defendants.
In the same breath, the defendants cannot impugn only the security
directed to be paid by way of business loss on the premise that damage has
been caused by the crane from its vessel on the one hand, while admitting
on the other the claim of economic loss caused to the plaintiff on the count
of repairs/replacement and ancillary charges owing due to the same act of
damage. Hence, the said submission of the defendant regarding the very
root of the duty of care and negligence cannot be accepted.
Thus, the present issue boils down to the liability of the defendants to
secure the damages claimed by way of business loss by the plaintiff.
Foreseeability, as rightly argued by the defendants, is an essential
determinant in that regard.
A perusal of the plaint as well as the documents annexed thereto
indicates that the plaintiffs only produced certain invoices for the year prior
to the incident in question. From the invoices, it is seen that apart from
throughput charges, bottling charges and GST have also been clubbed
therewith. The defendants might have a justification in arguing that the
GST component and the bottling charges claimed by the plaintiff are not
related to the damage on business loss; however, the said challenge is a
side issue, since even from the invoices produced by the plaintiffs, the
different components for bottling, throughput charges and the GST
component can very well be segregated, thereby arriving at the actual
throughput charges which were apparently earned by the plaintiff during
the relevant period.
The question is not what the plaintiff could have earned during the
coming one year from operation of the damaged twin arm. The relevant
issue is whether actual damages or loss has been or will be suffered by the
plaintiff due to the damage caused to the twin arm, since the work of the
two twin arms might very well have been done by the undamaged arm till
the damaged twin arm was replaced.
The mere possibility of damages or loss cannot be an indicator in that
regard. What the first Court did at the time of passing the order of arrest
was merely to club the total income earned by the appellant during the
relevant period and divide the same by two on the logic that the plaintiff has
been operating two such twin arms at HOJ-I and HOJ-II.
However, the defendant is justified in arguing that only in one
circumstance could it be justified that the plaintiff lost half of its revenue
due to the crippling of one of the arms, it being that vessels are
simultaneously serviced by both the arms for the purpose of loading and
unloading.
An insinuation is sought to be made by the plaintiff in this regard to
the effect that at the same time if one vessel is already docked for the
plaintiff or for other operators in a particular jetty and an HPCL vessel
comes for being loaded/unloaded by the plaintiff, the said vessel would have
to wait indefinitely for loading and unloading. It has been argued by the
plaintiff that for such purpose two twin arms are being operated, to
distribute the load between the two.
However, not an iota of pleading in that regard finds place either in
the plaint or in the pleadings relating to the vacating application at any
point of time.
In any event, accepting such a proposition would be resorting to
conjecture and surmise. We say so because even if we assume that a
particular vessel is blocking the jetty at the relevant point of time, there is
nothing to prevent both the jetties in question being blocked by different
vessels at the same point of time, in which case, the plaintiff would then be
remediless, having no other twin arm to operate. In such circumstances the
plaintiff may very well have to wait indefinitely for the other vessels to move
on.
That apart, we do not find anything on record to indicate as to
whether the work which was being done by both the twin arms cannot be
accomplished by the single twin arm which is now operating due to the
other being damaged. In such view of the matter, we cannot resort to mere
conjecture for the purpose of ascertaining or calculating the projected
business loss of the appellant.
As rightly argued by the defendant, only if it was shown that
simultaneously different vessels were being serviced/loaded/unloaded by
both the twin arms of the defendants, could the plaintiff claim that the total
income earned by the plaintiff should have been distributed between the two
arms. However, the frequency of arrival of vessels to the jetties, as borne out
by the plaintiff's invoices does not justify such conclusion.
Moreover, there is nothing on record to indicate as to the exact
transactions during the relevant period of the last year with regard to the
specific operations of each of the arms, which also weakens the plaintiff's
claim of damages on account of business losses.
Even keeping in mind the scope of the admiralty jurisdiction and the
probability that a foreign vessel may leave the waters of India thereby
rendering the ultimate relief claimed by the plaintiff infructuous even if the
suit is decreed, we cannot convince ourselves to take such a paranoid
approach so as to make out such a case for damages on account of loss of
business where the plaintiff itself could not make out such a case from the
averments in the plaint or the materials annexed to the plaint.
During arguments, learned counsel for the respondents in his usual
fairness had contended that the defendants are agreeable to display their
bone fides, to deposit double the amount of security which has been
directed in the impugned order, to cover additional costs which may be
suffered by the plaintiff, due to rising cost of placing the arms, if ultimately
the plaintiff is found entitled to the same.
In view of the above discussions, we are of the opinion that although
the plaintiff has made out a prima facie case for the purpose of establishing
that damages occurred to the plaintiff's twin arm due to the apparent
negligence of the defendants' vessel in not properly mooring its crane, we are
not convinced as to there being any fallacy in the impugned order with
regard to refusal of the security amount on the count of loss of business.
In so far as the reference by the Learned Single Judge in the
impugned order to a non-existent third twin arm is concerned, a careful
perusal of the impugned order indicates that the ultimate conclusion of the
order did not hinge on such observation. The said observation was made in
the context when the Learned Single Judge was discussing that the non-
disclosure of a particular berth is important since the plaintiff has many
facilities in other berths including in HOJ-I, HOJ-II and HOJ-III. Even if we
omit the last HOJ-III, the ultimate conclusion of the Learned Single Judge
cannot differ because the ratio and the logic remain the same that the
plaintiff failed to disclose the transactions of a particular berth to justify its
claim that the lack of operation of the damaged arm would fetch it sufficient
income which would justify the claim of damages on account of loss of
business.
That apart, even if an alternative case is probable on the basis of the
arguments of the plaintiff and in the opinion of this Court on the basis of
the materials on record, it is well-settled, not only in intra-court appeals but
in all other kinds of appeals, that the Appellate Court has only to see
whether any perversity or patent illegality has been committed by the
Learned Single Judge or the court against whose order the appeal has been
preferred. The Appellate Court cannot substitute its own views merely
because a second opinion is possible on the same materials on record just
because such second opinion is available.
Keeping in view such cardinal principle of adjudication of appeals, we
are of the opinion that there is no occasion to interfere with the impugned
order in the present appeal.
Accordingly, APOT/413/2023 along with any pending application in
connection therewith are dismissed without any order as to costs.
Liberty, however, is given to the parties to rely on the report filed
pursuant to the judgment of the Co-ordinate Bench in connection with the
appeal before the learned Singe Judge when the main injunction application
and/or the admiralty suit itself is being taken up for hearing, in accordance
with law.
It is further clarified that the observations made above are tentative,
made only for the purpose of adjudication of the appeal which arises out of
an interlocutory order, and shall not operate as res judicata in any
subsequent interlocutory application or the admiralty suit itself.
At this juncture, learned Senior Counsel appearing for the appellant
seeks an order of stay in terms of the initial order passed in the appeal, on
the ground that in the event the vessel leaves upon furnishing the reduced
security as directed by the learned Single Judge in the impugned order, the
ultimate decree, if obtained by the plaintiff, shall suffer inexecutability.
Learned Counsel appearing for the respondents opposes such prayer
and points out that the defendant has already complied with the order of the
learned Single Judge by depositing the requisite security and the detention
of the vessel is causing huge day-to-day losses to the defendant.
Since we are of the opinion that sufficient arguable questions have
been raised in the present appeal, the appellant should get an opportunity
to have this judgment tested before a higher forum.
Accordingly, the order of stay of the order impugned in the appeal, as
granted on October 26, 2023 by the co-ordinate Bench in connection with
this appeal, shall stand extended for seven days from date, i.e., till the
midnight of November 9, 2023.
No order as to costs.
Urgent certified website copies of this order, if applied for, be supplied
to the parties subject to compliance with all requisite formalities.
(SABYASACHI BHATTACHARYYA, J.)
(PARTHA SARATHI CHATTERJEE, J.)
SN/D.Ghosh/mg/TO/S.Pal/SK.
