State Trading Corporation Of ... vs Government Of The People'S ...
1996 Latest Caselaw 478 Del

ORDER

1. This is an application under Order 39, Rule 4 read with Section 151 of the Code of Civil Procedure, 1908, seeking vacation of order dated April 9, 1996, passed in I.A. No. 3205/96 in Suit No. 805/96, and for directing the release of the vessel 'M.V. Pranburi'.

2. In order to appreciate the controversy between the parties it will be necessary to first notice the facts as given in the plaint.

3. The plaintiff/non-applicant is the Stale Trading Corporation of India, while the Government of the People's Republic of Bangladesh is the first defendant. The plaintiff entered into a contract for sale of Non-Basmati Par Boiled Rice with the first defendant on July 19, 1995 (for short the principal contract'). By virtue of this agreement the plaintiff agreed to sell to the first defendant 50,000 MT (+ 5%) of non-Basmati for Boiled Rice of Indian origin. The plaintiff supplied and the first defendant received a total quantity of about 40,000 MT of the rice. For the remaining quantity of the contracted rice the plaintiff entered into a Back-to-Back Contract (for short the subsequent contract) with the second defendant M/s. Doon Valley Rice Limited, as per the subsequent contract, -the second defendant agreed to perform and observe all the obligations of the plaintiff under the principal contract with the first defendant to the extent of the remaining quantity of 10,500 MT (+ 5%). In the subsequent contract it was stipulated that the payment was to be made to the second defendant by partial assignment of letter of credit to be opened by the first defendant in favour of the plaintiff. According to the subsequent contract the plaintiff was to receive service charges of US Dollars 4 per M.T. of rice supplied to the first defendant which was to be deducted by the negotiating bank from bills presented for negotiation under the L. C. The plaintiff was also to get. foreign agent's commission of US dollars 4 per M.T. of rice from the bills presented for negotiation. The agreement further stipulated that the documents under the L. C. assigned to the second defendant were restricted to the State Bank of India, Overseas Brach, Vijaya Bank Building, New Delhi, only. Some times in January !996,the plaintiff received the amount as per the subsequent contract. Out of the 10,500 MT of the rice, which was covered by the subsequent agreement, the second defendant despatched 6,500 MT of rice on M. V. Yanmit from Kakinada Port of Andhra Pradesh to the first defendant. The ship belonged to the third defendant Mr. C. Y. Lee Charterparty agreement for carriage of the rice was signed by and between the second defendant and the third defendant directly. The ship arrived at Chitta going Port for unloading the cargo, but the first defendant required all the cargo to be discharged at Mongla Port despite the fact that the first defendant had agreed for discharge of all the cargo at Chittagong Port prior to its despatch from India. While the dispute regarding the place of unloading of the cargo was being sorted out, there was outbreak of disturbances in Bangladesh which resulted in work at Chittagong Port coming to a grinding halt. M. V. Yanmit without taking the permission of the Chittagong Port authorities and without unloading the cargo and delivering the same to the first defendant escaped with the rice on the night intervening 26th and 27the February, 1996. As a result of the nondelivery of the cargo, the first defendant by its letter dated March 27, 1996, addressed to the plaintiff asked the latter to pay damages for undelivered quantity of 6,500 M.T. of rice which was loaded on MV Yanmit. The letter also claimed certain other amounts as well including short delivery of 524 MT of rice, subject-matter of the subsequent contract. The plaintiff discovered that the second defendant negotiated the documents through the seventh defendant, the Branch Manager, State Bank of India, Karnal, though the documents under the contract should have been negotiated through the State Bank of India, Overseas Branch, Vijaya Bank Building, Barakhamba Road, New Delhi. The second defendant was successful in recovering the entire amount covered by the L.C. opened by the first defendant in favour of the plaintiff and assigned to the second defendant without the delivery of 6,500 MT of rice to the first defendant. The plaintiff claims that the seventh defendant was also in league with the second defendant. The plaintiff also claims that a quantity of -524 MT of rice was also short-delivered by the third defendant. In nutshell the plaintiff claims that the third defendant is in illegal possession of 6,724 MT of rice, and is liable to restore the said quantity. It is also prayed that the second and the third defendants should be asked to pay a sum of US dollars 18,88,572.23 to the plaintiff along with pendente lite and future interest. It is further prayed that since the third defendant and his properties are located out of India his ship, M V Pranburi, which came to discharge cargo at New Mangalore Port be arrested. There are certain other reliefs which have been claimed against the first and the second defendants, and the rest of the defendants.

4. Along with the suit, the plaintiff moved an application, being I.A. No. 3205/94, under Order 38, Rule 5 and Order 39, Rules 1 and 2 read with Section 151 of the Code of Civil Procedure for the arrest and attachment before judgment of the ship MV Pranburi. In the application it is averred that the third defendant had cheated and defrauded the plaintiff by escaping with a cargo of 6,500 MT of rice which was required to be delivered to the first defendant, that the third defendant had moved the vessel carrying the cargo to some undisclosed location and was attempting to dispose of the rice, that M V Pranburi, one of the ships belonging to the third defendant, is presently anchored at New Mangalofe Port and is due to leave the territorial waters of the country, and that the first defendant has raised a claim of over Rs. 3.65 crores against the plaintiff for nondelivery of the rice which was with the third defendant. In the circumstances, the plaintiff seeks arrest and detention of MV Pranburi and also an order restraining the third and the fourth defendants (M/s. Worldwide Shipping Inc.) and their agents, from removing the ship from the New Mangalore Port. On April 9, 1996, my predecessor passed an interim order of arrest and attachment of the vessel MV Pranburi and also directed the fifth defendant and the sixth defendant, Deputy Conservator, New Mangalore Port, New Mangalore, to ensure the compliance of the order.

5. The present application has been filed on behalf of the T.J.T. Services Company Ltd. for vacation of the aforesaid order. In this application it is claimed that the vessel Pranburi is registered with Harbour Department, Bangkok, Thailand, and belongs to the applicant. It is claimed that "the applicant and the vessel Pranburi have not been involved with any transaction or with any matter connected with the plaintiff, or with any contract that may have been entered into or existing between the parties to the suit. It is contended in the application that the plaintiff has no enforceable claim against the applicant or its vessel Pranburi. This application is supported by an affidavit of Mr. Sumit Jantrasomboon, who is stated to be the Attorney of the applicant T.J.T. Services Company Ltd.

6. In reply to the application the plaintiff reiterated that the vessel MV Franburi belongs to the third defendant. The plaintiff has controverted and traversed the allegation that the said vessel is not connected .with the parties to the suit. It is also asserted that Mr. Sumit Jantrasomboon has no right, power or authority to file the application on behalf of the T.J.T. Services Company Ltd) and the applicant is not the owner of M V Pranburi as actually the ship belongs to the third defendant, Mr. C. Y. Lee. It is alleged that C. Y. Lee has put up the applicant company'in a bid to mislead the court.

7. Learned Counsel for the applicant T.J.T. Services Company Ltd. submitted that this Court has no jurisdiction to order arrest of the ship which is located at New Mangalore Port. It was also contended that no cause of action has arisen within the jurisdiction of this Court. He further submitted that the applicant is the rightful owner of the vessel Pranburi and it has no connection whatsoever with the third defendant. Learned Counsel invited my attention to certificate Annexure 'B' to the application to show that the T.J.T. Services Company Ltd. is registered according to the Thai Laws which comprises of four directors, namely, Mr. Tawatowari Tangaitrong, Mr. Usah Sucodhaman, Mr. Dhansha Ngamkerkewote, and Mr. Vajrauth Nimboonsart. He further invited my attention to Annexure 'F' to the application and contended that C.Y. Lee was not even a shareholder of the applicant company. He also submitted that the plaintiff has filed a suit against Windlass Shipping Corporation; Angus Shipping Corporation; and Sin Hoa Chiang Trading Co. Pte. Ltd., in the High Court of the Republic of Singapore, and obtained an injunction whereby the defendants have been restrained from disposing of in any way whatsoever the 6,500 MT of non basmati parboiled rice, subject-matter of subsequent contract, lying in Sembawang Wharves, Warehouse, which was despatched through MV Yanmit. He also canvassed that in the circumstances the Court was not right in directing the arrest and attachment of the vessel Pranburi.

8. On the other hand, learned Counsel for the plaintiff/non-applicant contended that MV Pranburi belongs to the third defendant C. Y. Lee who is connected directly or indirectly with several companies including Antara Shipping Company Ltd., Angus Shipping Corporation, Golden River (Thailand) Company Ltd. etc. It was also contended that there was a direct and unmistakable link between C.V. Lee and MV Pranburi and the aforesaid companies. In this regard he invited my attention to several documents which have been filed along with the reply. He asserted that all these companies and concerns belong to C.Y. Lee. Learned Counsel further canvassed that Tawatchai is a fugitive and has been absconding as he was wanted in number of cases on account of amounts due from him to a number of persons, and on April 16, 1996, he was not in Bangkok, the day when the power of attorney is said to have been executed by him in favour of Sumit. Learned Counsel vehemently contended that this Court has jurisdiction to direct arrest of MV Pranburi as security for the amount which has been claimed from defendants 2 and 3.

9. I have considered the submissions of the learned Counsel for the parties. The first question which arises for prima facie determination is whether the applicant T.J.T. Services Company Ltd. and the vessel MV Pranburi have not been involved in any transaction or matter connected with the plaintiff or any contract that may have been entered into arid/or existing between the parties to the instant suit. This question acquires significance in view of averments made in paras 9 and 21 of the application. At this stage it will be convenient to set out the said paras:--

"9. The applicant and the said vessel have not been involved with any transaction or matter connected with the plaintiff or any contract that may have been entered into and or existing between the parties to the above suit. XX XX XX

21. That none of the defendants are the shareholders or Directors or owners of the Applicant Company or of the said vessel."

10. The assertions made in these paras have to be tested in the light of the documents which have been filed by the applicant and the plaintiff. Annexure 'B' to the instant application is a certificate, according to which the applicant company was registered on July 8, 1980, as per the Thai Laws. Annexure 'E' has been filed by the applicant to show the name of the shareholders of the company. It needs to be noted that in Annexure 'F' to the application, which is claimed to be a translation of Annexure 'E' thereof and lists the names of the shareholders, the name of the third defendant does not figure as a shareholder of the T.J.T. Services Company Ltd., but at the same time Annexure 'E' shows that the company is connected with another company called 'Antara'. At the top of Annexure 'E' the word 'Antara' and No. 6626931571 (which is presumably a telephone number) have been mentioned. Annexure 'B' to the application has been filed by the applicant to demonstrate the losses which it is likely to suffer due to detention and arrest of the vessel. This annexure also shows the connection of M.V. Pranburi with 'Antara'. In the beginning of the annexure the word 'Antara' and telephone No. 6623934014 is mentioned. At this stage it will be convenient to set out an extract of the annexure.

 
    "FRI 12-APR-96 10:31 ANTARA
       662 6934014 P.02
             Broking Services
Iss/BG/3103        31/Mar/96.
TO: ANTARES-SHIPPING
HILMAR/BARNET
 Re: M V PRANBURI
Please find re-cap as under:
 *Performing Vessel: M V PRANBURI
  as described vide your fax 091 dated
  25 Mar 1966.
    XX    XX    XX"


 

11. The plaintiff in reply to the instant application has filed documents in order to emphasise the connection between Antara, T.J.T. Services Company Ltd., Angus Shipping Corporation, Golden River (Thailand) Company, Yanmit, M. V. Pranburi, Mr. Sumit Jantrasomboon (the power of attorney holder of the applicant) and the third defendant (C. Y. Lee). One of the documents is the communication dated March 14, 1996, from the third defendant C. Y. Lee to one Capt. Nirmal. The subject mentioned in the communication is M. V. Pranburi. This communication is on the letterhead of Antara Shipping Company Ltd. Again at the top of the communication the word 'Antara' and telephone No. 662 6931571 have been mentioned. Revering to Annexure 'A' to the application (Certificate of Incorporation of T.J.T. Services Company Limited) it is noteworthy that the number given therein and the number given in the communication dated March 14, 1996, are the same. Similarly, there are other letters/fax messages/communications (collectively marked as Annexure 'A' to the reply of the plaintiff) which disclose a clear link between C.Y. Lee, Antara Shipping, M.V. Pranburi, Yanmit, Angus Shipping Corporation, and Worldwide Shipping Inc., etc.

12. Few excerpts from the documents are given below to illustrate the point:--

1.

"THU 14-MAR-96 9:59 ANTARA 6626931571 SHIP AGENTS & SHIPPING CONSULTANTS FAX TRANSMISSION

------------------------------------

Ref: UMA/PRAN/001 DATE: 13-3-1996 Pages: 01

------------------------------------

To: ANTARA SHIPPING CO. LTD./
BANGKOK
    XX           XX          XX
RE : MV. PRANBURI AT PORT MANDVI
    XX           XX          XX
MY. C. Y. LEE
    XX           XX          XX
2.
"WORLDWIDE SHIPPING INC.
                     Date: 22-3-1996 
                  Ref: WsI/95-96/192
To:
ATTN: MR LEE
     RE: MV PRANBURI -- DA;
ETA NMP -- 25-3-96."
3.
"BOSE & MITRA
Advocates & Solicitors
       FACSIMILE TRANSMISSION
FAX. NO. 7669! 83 Date 26th March, 1996.
TO: CAPT. NIRMAL TRADESH1P PVT.
    LTD.
RE: M. V. "PRANBURI" 
It is regretted  that till  date we have not
received  payment against  our  Bill No. BM/ 
44/96 Dt. 12-3-96 for Rs. 1,06,990.00 cover-
ing the.....
    XX           XX          XX
NIRMAL/CY  LEE; HOW COME  WE ARE UNDER BLACK  
MAIL  BY  EVERYONE EVEN BY THE SOLICITORS....
THEMSELF WHO IS SUPPOSED TO  BE  ON  OUR SIDE
WHAT WOULD BE LEFT OF THE FREIGHT AGAIN.
               REGARDS. 
TO: MR. C. Y. LEE
AS I UNDERSTAND ADVOCATES WERE PAID REGULARLY 
BY CAPT. NIRMAL, HOW THIS BIG BILL IS DUE NOW.
Sd/- 27-3
    XX           XX          XX
     MY DIRECT LINE: 6934019
         DIRECT FAX: 6931571
    XX           XX          XX"
4.    
"THU 28--MAR--96 15:50 ANTARA 
662 6931571
           ANTARA SHIPPING COMPANY
                  LIMITED
              FACSIMILE MESSAGE
TO:   UNIMARINE  BOMBAY  Date: 28-3-96
              Ref. MV PRANBURI FREIGHT
ATTN: NURRIDDIN/KISHORE
FROM: CY LEE
SUBJECT: MV PRANBURI FREIGHT.
    XX           XX          XX"
        ----------------------
5.
       "ANTARA SHIPPING COMPANY
                LIMITED
Bangkok 10320, Thailand/Tel. 6934010-
3/6934015-8/6931570, Fax: 6934014/1571.
        FACSIMILE MESSAGE
To: Unimarine Bombay Date: 4-4-96.
Attn. Mr. Nuruddin
From: CY Lee
Subject: MV Pranburi
   
              MV PRANBURI"
---------------------------------------
(Note: No. 662 6934014 mentioned at the
beginning of Annexure 'G' (page  22  of 
the application LA- 3510/96) Also finds 
mention  in  this  letter  as  the Fax. 
number of Antara Shipping Company Ltd., 
Bangkok.)
---------------------------------------
            ----------------
6.
"TUE 09--APR--96 10:55 ANTARA 
662 6931571
UNJMARINE/ MUMBAI, APRIL 6TH 96.
TO: ANGUS SHIPPING--BANGKOK
ATTN: MR. C. Y. LEE
    XX           XX          XX
REGDS: NURIDIN.
"Antara Shipping Company Limited
RE: DEMURRAGE OF "M/V YANMIT"
ACT "DOON VALLEY LIMITED.
    XX           XX          XX
       GRAND TOTAL DUE TO ANGUS
           SHIPPING CORPORATION
          = 123,824.65 US $"
          -------------------
7.
"From the desk of
Mr. C. Y. Lee. 12-3-96
                 (BY FAX)
     captain nirmal/cy lee:
RE: YANMIT CARGO LIEN.
    XX           XX          XX
                BEST REGARDS/CY LEE "
         -----------------
8.
"VANCENT, FRENCH & BROWNE
        Solicitors
    XX           XX          XX
To: MESSRS. JOHNSON STOKES &
    MASTER.
    XX           XX          XX
REF/MATTER: M.V. "YANMIT" 
CREDIT SUISSE -- ST. VINCENT AND
THE GRENADINES REGISTRY.
   

 Dear Mr. Vatransuchart, 
 

You are hereby instructed on behalf of Credit Suisse to approach the Thai Port authorities to determine whether the M.V. YANMIT has been re-registered under Thai flag -free from mortgages. We are told that the owner a Mr. Lee, a Thai national, is presently offering the vessel for sale under new name registered in Thailand. I copy to you a fax from the Government of Sr. Vincent and the Grenadines to the Ministry of Transport and Communications in Bangkok indicating your vessels including the "YANMIT" which have been re-registered free from mortgage. I also copy to your our fax to Mr. Lee of the 27th March requesting that he -- from offering the vessel or sale free from mortgage. I will try and find out the new name of the vessel under Thai flag. In the meantime, such assistance as you can offer with the Thai Authorities would be most helpful"

Having regard to the documents on record, it appears that C.Y. Lee, the third defendant, is connected with M.V. Pranburi and in turn with T.J.T. Services Company Ltd. and there has been an attempt by the applicant to camouflage the connection of C.Y. Lee with M.V. Pranburi and T.J.T. Services Company Ltd. and others. Therefore, prima facie, the applicant was not right in stating in the application that the applicant and the said vessel are not involved in any transaction or matter connected with the plaintiff "or any contract that might have been entered into and/or existing between the parties to the suit", and that "none of the defendants are the shareholders or Directors or owners of the applicant company or of the said vessel". The applicant has not come out with the correct information which it was bound to disclose in its applicatioin. The applicant is guilty of suppressio veri. The application is accompanied by an affidavit of Mr. Sumit Janlra-somboon. Attorney of the Applicant TJT Services Company Limited. The averments made in the application not being true and complete, Sumit Jantrasomboon and TJT Services Company Limited must explain why the information was not fully disclosed and why certain important and fundamental aspects of the matter were suppressed. However, this aspect of the matter need not detain me as the question still remains whether despite the connection or link between the third defendant and vessel MV Pranburi this Court has jurisdiction to pass an order of arrest and detention in regard to the vessel MV Pranburi. The other question which would necessarily arise is whether Section 20 of the Code of Civil Procedure or Section 443 of the Merchant Shipping Act, which is a special provision relating to detention of foreign ships, will apply. In order to determine the questions it would be necessary to examine the provisions of the merchant Shipping Act, 1958 (for short 'the Act'). This is a voluminous Act consisting of 461 sections stretching over eighteen parts and two schedules. First, the Preamble of the Act which enunciates the objectives behind the enactment. It reads thus :--

"An Act to foster the development and ensure the efficient-maintenance of an Indian mercantile marine in a manner best suited to serve the national interests and for that purpose to establish a National Shipping Board and a Shipping Development Fund, to provide for the registration of Indian ships and generally to amend and consolidate the new law relating to merchant shipping."

Part I deals with short title and commencement of the Act and the definitions. Subsection (1) of Section 2 states that unless otherwise expressly provided, the provisions of this Act which apply to any vessel which is registered in India; or any vessel which is required by this/Act to be so registered; or any other vessel which is owned wholly by persons to each one of whom any of the descriptions specified in clause (a) or. in clause (b) or in clause (c), as the case may be, of Section 21 applies, shall So apply wherever the vessel may be. Sub-section (2) of Section 2 is material. This section reads as follows :--

"Unless otherwise expressly provided, the provisions of this Act which apply to vessels other than those referred to in sub-section (1) shall so apply only while any such vessel is within India, including the territorial waters thereof."

Thus, according to sub-section (2), the Act would apply to any foreign vessel which is within India including the territorial waters thereof.

13. Section 3 is the definition section. Sub-section (15) thereof is relevant for the determination of the question. It defines High Court in relation to a vessel. This sub-section reads as follows:

"High Court", in relation to a vessel, means the High Court within the limits of whose appellate jurisdiction -

(a) the port of registry of the vessel is situate; or

(b) the vessel is for the time being; or

(c) the cause of action wholly or in part arises."

14. Part II deals with National Shipping Board. Part III deals with the appointments' of Director General of Shipping, Surveyors, Radio Inspectors, Seamens Welfare Offjcers, establishment and maintenance of Mercantile Marine Department, Shipping Officers and Seamens Employment Offices. Part IV, consisting,of Sections 14 to 19 of the Act dealing with Shipping Development Fund, stands repealed by the Merchant Shipping (Amendment) Act, 1986(Act No. 66 of 1986). The Amendment Act consists of four chapters. Chapters I to IV of the Amendment Act deal with the repeal of the Shipping Development Fund Committee and consequential amendments in the Principal Act and the definitions. Part V deals with registration of Indian ships. Part VI deals with certificates of officers,' namely, masters, mates, engineers, skippers, etc. Part VI-A concerns with the obligations of certain certificate holders to serve Government or in any Indian ships. Part VII makes provision for classification of Seamen and prescription of minimum manning scale. Part VIII deals with provisions relating'to survey of passenger ships. Part IX deals with safety provisions. Part IX-A relates to nuclear ships. Part X deals with matters relating to collision of ships, accidents at sea and related issues of liability. Part X-A concerns with limitation of liability of owners for damages in respect of certain claims and matters connected therewith. Part X-B deals with civil liability of the owners for damages due to oil pollution. Part XI makes provisions relating to navigation. Part XI-A concerns with prevention and containment of pollution of the sea by oil Part XII deals with investigations and enquiries in relation to shipping casualties, charges against masters, mates and engineers. Part XIII deals with matters' relating to wreck and salvage. Part XIV deals with control of Indian ships and ships engaged in coasting trade. Part XV deals with sailing vessel. Part XV-A deals with fishing boats. Part XVI makes provisions relating to penalties and procedure. Section 443 of this Chapter needs to be noticed. This section reads as follows:

Power to detain foreign ship that has occasioned damage.

443. (1) Whenever any damage has in any part of the world been caused to property belonging to the Government or to any citizen of India or a company by a ship other than an Indian ship and at any time thereafter that ship is found within Indian jurisdiction, the High Court may, upon the application of any person who alleges that the damage was caused by the misconduct or want of skill of the master or any member of the crew of the ship, issue an order directed to any proper officer or other officer named in the order requiring him to detain the ship until such time as the owner, master or consignee thereof has satisfied any claim in respect of the damage or has given security to the satisfaction of the High Court to pay all costs and damages that may be awarded in any legal proceedings that may be instituted in respect of the damage, and any officer to whom the order is directed shall detain the ship accordingly.

(2) Whenever it appears that before an application can be made under this section, the ship in respect of which the application is to be made will have departed from India or the territorial waters of India, any proper officer may detain the ship for such time as to allow the application to be made and the result thereof to be communicated to the officer detaining the ship, and that officer shall not be liable for any costs or damage in respect of the detention unless the same is proved.to have been made without reasonable grounds.

(3) In any legal proceedings in relation to any such damage aforesaid, the person giving security shall be made a defendant and shall for the purpose of such proceeding be deemed to be the owner of the ship that has occasioned the damage."

Chapter XVII deals with provisions relating to miscellaneous matters. Chapter XVIII deals with repeals and savings.

15. It appears from the scheme of the Act that it is a self-contained Code covering the entire field relating to matters concerning merchant shipping. Therefore, this being a special piece of legislation in the field of merchant shipping all matters connected therewith will be governed by it. Therefore, , jurisdiction of this Court to deal with matters of detention and arrest of the ship Pranburi will be governed by Section 443 of the Act and not Section 20 of the C.P.C. As already seen above, Section 443 deals with the power of the High Court concerned to detain foreign ships. High Court in relation to a vessel is defined by Section 2(15) of the Act, and means the High Court within the limits of whose appellate jurisdiction the port of registry of the vessel is situate or the vessel is for the time being, or the cause of action wholly or in part arises. Now, as per Section 443, whenever any damage in any part of the world has been caused to the property belonging to the Government or to any citizen of India or a company by a ship other than an Indian ship, and at any time thereafter the ship is found within Indian jurisdiction, the High Court concerned may, upon an application of any person who alleges that the damage was caused by the misconduct or want of skill of the master or any member of the crew of the ship, issue an order directing any proper officer or other officer named in the order requiring him to detain the ship until such time as the owner, master or* consignee thereof has satisfied any claim in respect of the damage or has given security to the satisfaction of the High Court. In nut-shell the provision permits the concerned High Court to order detention of an offending foreign ship on the ground of damage caused to the property belonging to the Government of India, or lo any citizen of India or company.

16. The section is of a wide amplitude and the term 'damage' must receive an expansive interpretation. It does not merely mean bodily damage to the property as a result of collision of a ship with another ship or any other object. Damage can be caused to a property in several ways. It can be caused by breach of contract or by acts of omission or commission or misconduct on the part of the owner, master and consignee of the ship, or their agents or servants or by their negligence or mismanagement of the vessel. The damage can also be caused due to theft, misappropriation of the cargo. Material damage to the property including cargo can also result when by pernicious conduct of the aforesaid persons it is lost or cannot be found or it is diverted or disposed of in violation of the direction of its owner or consignee, as the case may be. Damage also results from illegal detention of goods. The Supreme Court in M. V. Elisabeth v. Harwan Investment and Trading Pvt. Ltd., , in this regard, has held as follows:--

"These provisions relate to detention by reason of damage caused in any part of the world by a foreign ship to property belonging to the Government of India or to an Indian citizen or company. The sections are wide in terms and the expression 'damage' is not necessarily confined to physical damage. Ordinarily damage is caused by physical contract of the ship, such as in collision. But damage can also be caused to property by breach of contract or acts of commission or omission on the part of the carrier or his agents or servants by reason of the negligent operation and management of the vessel, as, for example, when cargo is damaged by exposure to whether or by negligent stowage; or, by the misconduct of those in charge of the ship, like when cargo is disposed of contrary to the instructions of the owner or by reason of theft and other misdeeds. In all these cases, damage arises by reason of loss by what is done by the ship or by the breach, negligence or misdeeds of those in charge of the ship".

17. Having regard to the above decision, I have no hesitation in holding that damage can result to the cargo when a foreign ship fails to berth and discharge cargo at the port of destination in contravention of the legal and binding obligations created and existing between the owner or consignee of the cargo on the one hand and the owner, master or consignee of the vessel on the other, or the latter diverts or retains or misappropriates the same (cargo) and in such contingencies S. 443 would be attracted and the High Court envisaged by Section 443 read with Section 2(15) of the Act can order arrest or detention of the ship when the same is found in the Indian jurisdiction.

18. Thus it can be stated that a High Court contemplated under Section 2(15) have jurisdiction to pass an order detaining a foreign ship found in Indian jurisdiction which caused damage to the property of the persons mentioned in Section 443 of the Act provided any of the following conditions are satisfied:--

(a) the port of registry of the vessel is situated within its appellate jurisdiction; or

(b) the vessel is for the time being within the limits of its appellate jurisdiction; or

(c) the cause of action wholly or in part arose within the limits of its appella'te jurisdiction.

In so far as conditions (a) and (b) are concerned, it is obvious that they are not satisfied. The port of registry of the vessel M.V. Pranburi is not situate within the appellate jurisdiction of this Court. The vessel is at Mangalore Port and is therefore not located within the limits of appellate jurisdiction of this Court. We are, thus, left only with the third condition. If the cause of action wholly or in part has arisen within the appellate jurisdiction of this Court, then the objection of the third defendant must fail, if not then his application is to be allowed.

19. For the application of condition (c) the cause of action must be in relation to the vessel regarding which an order of detention is sought. Assuming for the sake of argument that M. V. Pranburi was the vessel which as involved in the non-delivery of cargo to the first defendant, even the cause of action cannot be said to have arisen either wholly or partly in the appellate jurisdiction of the Delhi High Court. In a case like the present one, the cause of action in relation to a vessel cannot arise at a place where the vessel has never visited or is incapable of visiting unless it is shown that the offending vessel is involved in some breach of an obligation created by a contract governing the parties and the contract was signed or was to be executed or to be performed wholly or partly or the cargo was delivered or was to be received at a place within the High Court's appellate jurisdiction. In the present case, I have not been able to persuade myself to hold that condition (c) above has been satisfied.

20. It is true that the second defendant was to discharge the obligations of the plaintiff under the subsequent contract, but it is not the case of the plaintiff that in execution thereof a charterparty was signed at Delhi. In the event of the charterparty being signed at Delhi, it may have been possible to say that part of cause of action arose within the appellate jurisdiction of this Court.

21. This Court, therefore, cannot exercise jurisdiction over the vessel M. V. Pranburi as none of the conditions mentioned in Section 2(15) for assumption of jurisdiction exists. The proceedings for damages in rem against the body of the ship have to be instituted in the High Court having jurisdiction under the Act.

22. Having so held it needs to be clarified that the power under Section 443 read with Section 2(15) of the Act cannot be construed to be confined to the Admiralty Court alone whose power is derived from the provisions of the Admiralty Courts Act, 1861, made applicable to India by the Colonial Courts of Admiralty (India) Act, 1890, read with Colonial Courts Admiralty (India) Act, 1891, but the power is available to all High Courts in India subject to the conditions specified therein being satisfied. Article 215 of the Constitution declares every High Court to be a court of record. A Court of record is undoubtedly a superior Court and is competent to determine the scope of its jurisdiction including the jurisdiction to pass interim orders. Unless the jurisdiction on a particular matter is restricted or barred and subject to the appellate jurisdiction of the Supreme Court, the High Courts have unlimited jurisdiction including the jurisdiction to determine their own powers.

23. At this stage it will be relevant to quote the following observations of the Supreme Court in M. V. Elisabeth (supra) :--

"46. Admiralty Law confers upon the claimant a right in rem to proceed against the ship or cargo as distinguished from a right in personam to proceed against the owner. The arrest of the ship is regarded as a mere, procedure to obtain security to satisfy judgment. A successful plaintiff in an action in rem has a right to recover damages against the property of the defendant. The liability of the shipowner is not limited to the value of the res primarily proceeded against..... An action ..... though originally commended in rem, becomes a personal action against a defendant upon appearance, and he becomes liable for the full amount of a judgment unless protected by the statutory provisions for the limitation of liability (Roscoe's Admiralty Practice, 5th fid p. 29)

47. The foundation of an action in rem, which is peculiarity of the Anglo-American law, arises from a maritime lien or claim imposing a personal liability upon the owner of the vessel. A defendant in an admiralty-action in personam is liable for the full amount of the plaintiff's established claim Likewise a defendant acknowledging service in action in rem is liable to be saddled with full liability even when the amount of the judgment exceeds the value of the res or of the bail provided. An action in rem lies in the English High Court in respect of matters regulated by the Supreme Court Act, 1981, and in relation to a number of claims the jurisdiction can be invoked not only against the offending ship in question but also against a 'sistership' i.e., a ship in the same beneficial ownership as the ship in regard to which the claim arose. . XX XX XX

48..... The plaintiff may therefore detain the ship by obtaining an order of attachment whenever it is feared that the ship is likely to slip out of jurisdiction, thus leaving the plaintiff without any security.

 

 49. A ship may be arrested (i) to acquire jurisdiction; or (ii) to obtain security for
satisfaction of the claim when decreed; or (iii) in execution of a decree.... .  XX   XX                                   XX
 

66. It is likewise within the competence of the appropriate Indian Courts to deal, in accordance with the general principles of maritime law and the applicable provisions of statutory law, with all persons and things found within their jurisdiction. The power of the Court is plenary and unlimited unless it is expressly or by necessary implication curtailed. Absent such curtailment of jurisdiction, all remedies which are available to the courts to administer justice are available to a claimant against a foreign ship and its owner found within the jurisdiction of the concerned High Court. This power of the Court to render justice must necessarily include the power to make interlocutory orders for arrest and attachment before judgment.

67. The High Courts in India are superior Courts of record. They have original and appellate jurisdiction. They have inherent and plenary powers. Unless expressly or impliedly barred, and subject to the appellate or discretionary jurisdiction of this Court, the High Courts have unlimited jurisdiction, including the jurisdiction to determine their own powers.....

75. All foreign merchant ships and persons thereon fall under the jurisdiction of a coastal State as they never enter its waters. Subject to the right of 'innocent passage', the coastal State is free to exercise jurisdiction over such ships in respect of matters the consequences of which extend beyond the ships. Such ships are subject to the local jurisdiction in criminal, civil and administrative matters. This jurisdiction is, however, assumed only when, in the opinion of the legal authorities, the peace or tranquillity of the port is disturbed, when strangers to the vessel are involved or when the local authorities are appealed to. Questions which affect only the internal order and economy of the ships are generally left to the authorities of the flag State. Coastal States are entitled to assume jurisdiction in respect of maritime claims against foreign merchant ships lying in their waters. There ships are liable to be arrested and detained for the enforcement of maritime claims. The courts of the country in which a foreign ship has been arrested may determine the cases according to merits, provided they are empowered to do so by the domestic law of the country or in any of the cases recognised by the international convention relating to the Arrest of Seagoing Ships, Brussels, 1952 (See also the International Conventions for the unification of certain rules relating to Maritime Liens and Mortgages of 10th April, 1926 and May 27, 1967). The maritime claims in respect of which the power of arrest is recognised in law include claims relating to damage caused by any ship either in collision or otherwise; claims relating to carriage of goods in any ship whether by charter party or otherwise, loss of or damage to goods etc. These principles of international law, as generally recognised by nations, leave no doubt that, subject to the local laws regulating the competence of courts, all foreign ships lying with the waters of a State, including waters in ports, harbours, roadsteads, and the jurisdiction of the local authorities in respect of maritime claims and they arc liable to be arrested for the enforcement of such claims. XX XX XX

85. No Indian statute defines a maritime claim. The Supreme Court Act, 1981, of England has catalogued maritime claim with reference to the unified rules adopted by the Brussels Convention of 1952 on the Arrest of Seagoing Ships. Although India has not adopted the various Brussels Convention (sic) the Conventions listed above), the provisions of these Conventions are the result of international unification and development of the maritime laws of the world, and can, therefore, be regarded as the international common law or transnational law rooted in and evolved out of the general principles of national laws, which, in the absence of specific statutory provisions, can be adopted and adapted by courts to supplement and complement national statutes on the subject. In the absence of a general maritime Code these principles aid the Courts in filling up the lacunae in the Merchant Shipping (sic) and other enactments concerning shipping. "Procedure is but a handmaiden of justice and the cause of justice can never be allowed to be thwarted by any procedural technicalities."

24. In view of the aforesaid observations of the Supreme Court it is absolutely clear that all the High Courts will have power under Section 443 read with Section 2(15) of the Act to arrest and detain an offending vessel for causing damage provided the conditions laid down therein are fulfillled.

25. Learned counsel for the plaintiff submitted that applying the principle laid down by the Supreme Court in M. V. Elisabeth (supra) based on International Convention Relating to Arrest of Seagoing Ships, Brussels, 1952, MV Pranburi being the sister-ship of MV Yanmit has been rightly arrested and detained. On the other hand, learned Counsel for the applicant submitted that the plaintiff has placed no material to show that the third defendant C. Y. Lee is the owner of MV Pranburi and, therefore, the vessel is liable to be released. He also submitted that assuming C.Y. Lee was the owner of both MV Pranburi and MV Yanmit, MV Pranburi must be released as it had nothing to do with the cause of action which may be against M V Yanmit. He further contended that courts in India have no power to arrest sister-ships. Regarding Brussels Convention he submitted that the same has not been ratified by India and is not applicable. He further canvassed that the Supreme Court in MV Elisabeth case (supra) was not dealing with the case of a sister-ship. In support of his submissions he relied upon the decision of the Bombay High Court in Pal Oil Company Ltd. v. M. T. Leontas, a Vessel end others (Admiralty Suit No. 39 of 93, Lodging No. 3857 of 1993, decided on November 9, 1993). It is not necessary to consider the aforesaid submissions of the learned Counsel for the parties as I have already come to the conclusion that this Court does not have jurisdiction to arrest and detain the vessel MV Pranburi.

26. Having regard to the above discus sion, the interim order dated April 9, 1996, is vacated.

27. Mr. Nayar, learned Counsel appearing for applicant TJT Services Company Ltd., however, states that vessel MV Pranburi will remain at New Mangalore Port for the next 14 days. He states that this statement is being made on the instructions of TJT Services Company Ltd. and Sumit Jantrasom-boon, Having regard to this submission of Mr. Nayar, the fifth and the sixth defendants are directed to ensure that the vessel is not removed from New Mangalore Port for the next fourteen days. I.A. No. 3205/96 is also dismissed.

28. However, before parting with the order it is directed that Sumit Jantrasomboon will file an affidavit explaining in detail the reasons for not disclosing the correct facts in the application under Order 39, Rule 4, C.P.C, The affidavit will be filed within six weeks.

29. Copies of the order may be given dasti to learned Counsel for both the parties.

30. Application allowed.