Gujarat High Court
United Shippers Limited vs Vitol S.A on 18 February, 2025
Author: Biren Vaishnav
Bench: Biren Vaishnav
NEUTRAL CITATION
C/OJA/7/2023 ORDER DATED: 18/02/2025
undefined
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/O.J.APPEAL NO. 7 of 2023
In R/PETN. UNDER ARBITRATION ACT NO. 19 of 2017
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2023
In R/O.J.APPEAL NO. 7 of 2023
================================================================
UNITED SHIPPERS LIMITED
Versus
VITOL S.A. & ANR.
================================================================
Appearance:
MR MANOJ KHATRI WITH MR JWALIT B SONEJI(7895) for the Appellant(s)
No. 1
MR SN SOPARKAR, SENIOR ADVOCATE WITH MR HARSH N
PAREKH(6951) for the Opponent(s) No. 1
================================================================
CORAM:HONOURABLE THE ACTING CHIEF JUSTICE MR.
JUSTICE BIREN VAISHNAV
and
HONOURABLE MR. JUSTICE HEMANT M.
PRACHCHHAK
Date : 18/02/2025
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK)
1. The present appeal is filed by the appellant against the
judgment and order dated 07.10.2023 passed by the learned
Single Judge in OJCA No. 1 of 2018 in R/PETN. under Arbitration
Act No. 19 of 2017, whereby, the learned Single Judge has
partly allowed the application and ordered to disburse an
amount of Rs.17,34,632/- alongwith interest accrued thereon
NEUTRAL CITATION
C/OJA/7/2023 ORDER DATED: 18/02/2025
undefined
in favour of the appellant and the remaining amount of
Rs.5,05,65,368/- alongwith interest accrued there on was
ordered to be paid to the Judgment Creditor respondent No.1
herein.
2. The brief facts giving rise to the present appeal are as
under :
2.1 That one Bhatia Group of Companies which includes
Bhatia Global Trading Limited, Bhatia Industries and
Infrastructure Ltd. and Asian Natural Resources (India) Ltd.,
had entered into a contract dated 18 th July, 2014. The said
contract was entered into for a period of 8 months i.e from 1 st
August, 2014 to 31st March 2015 for handling their coal and
carrying out other stevedoring activities at the port of
Navlakhi. Pursuant thereto, vessel M.V. Iolcos Confidence and
Liberty Prudencia arrived at Navlakhi Port, Gujarat on 21 st
November 2014 and 29th November, 2014 respectively and
discharged and stored the said coal at the Appellant's
premises at Navlakhi Port. Thereafter, pursuant to an order
dated 18th December 2014 passed by the Additional District
Judge at Morbi, Gujarat an order was passed in terms of the
precept issued by the Bombay High Court, where an injunction
NEUTRAL CITATION
C/OJA/7/2023 ORDER DATED: 18/02/2025
undefined
order was passed against the 40,600 M.T of cargo discharged
from the vessel M.V. Lolcos Confidence and 21,889 M.T. of
cargo discharged from the vessel M.V. LIBERTY PRUDENCIA.
2.2 It is the case of the appellant that Respondent No.1 i.e.
Award Holder had applied for several extension of the precepts
time and again from the Bombay High Court which were
allowed. The said coal was lying at the premises allotted to the
Appellant incurring huge costs and expenses towards
maintenance and hence, the Appellant was constrained to file
an intervention application before the Bombay High Court vide
notice of motion seeking intervention in the execution
application filed by Respondent No.1 and other necessary
directions with respect to the coal lying at the Appellant's
premises. That, vide an order dated 30 th July 2015, the
Appellants were allowed to intervene in the proceedings
however, there were no orders passed with respect to the
custody or possession of the coal since there were appeals and
other proceedings pending between Award Debtor, Bhatia
Global and other Bhatia Companies. During the said period, the
coal kept lying at the premises allotted to the Appellant under
attachment order passed by the High Court. An application was
NEUTRAL CITATION
C/OJA/7/2023 ORDER DATED: 18/02/2025
undefined
made before Additional District Court, Morbi for sale/ shifting of
the said coal as the Port Authorities started pressurizing the
Appellant to shift the coal as it was causing pollution resulting
in environmental damage inside the port area and a consent
order dated 11th May 2016 came to be passed by the Morbi
Court for sale of the said coal discharged from the vessel M.V.
Liberty Prudencia.
2.3 Thereafter, the Appellant on numerous occasions had
made various applications to courts seeking urgent reliefs for
shifting of the coal. The Appellant had also addressed letters to
the Award Creditor i.e. Respondent No.1 requesting them to
shift the cargo from the said premises as it was causing severe
commercial loses as well as environmental issues due to
extensive smouldering of coal, the fire within the coal stacks
was spreading and the problem was further exacerbated by
the prevailing weather conditions of intense heat, high
temperature and strong winds, which was resulting in the fire
spreading to other cargo. However, no steps were taken by the
Respondent No.1 to shift the cargo from the Appellant's
premises.
NEUTRAL CITATION
C/OJA/7/2023 ORDER DATED: 18/02/2025
undefined
2.4 It is the case of the Appellant that the Gujarat Maritime
Board had addressed various notices to the Appellant holding
them responsible for causing air pollution, health hazards and
other losses to which is being caused due to the fire in stacks
of this coal. The Appellant had issued letters to the Respondent
No. 1 to shift the cargo but no shifting was carried out by
them. The Appellant had filed appropriate applications seeking
shifting of the coal in various Courts. That, the process of sale/
shifting of the said coal which was lying at the plot allotted to
the Appellant, which was discharged from the vessel, M.V.
locos Confidence commenced on 18 th November 2017 and
completed on 14th January 2018. The total amount deposited in
the court out of the sale proceeds of the said coal from the
vessel M.V. Lolcos Confidence is a sum of Rs. 3,74,12,240.00.
Similarly, the process of sale/shifting of the said coal which
was lying at the plot allotted to the Applicant by Port
Authorities, which was discharged from the vessel, M.V. Liberty
Prudencia commenced on 4th June 2016 and completed on 24th
June 2016. The total amount deposited in the court out of the
sale proceeds of the said coal from the vessel M.V. Liberty
Prudencia is a sum of Rs.1,01,96,141.00.
NEUTRAL CITATION
C/OJA/7/2023 ORDER DATED: 18/02/2025
undefined
2.5 The Appellant had taken care/maintained the coal whilst
it was lying at the plot allotted to them. The Appellant had to
continuously sprinkle water on the said coal and also to shuffle
the cargo with the help of machineries and men to control the
fire emanating from it, as coal is highly combustible cargo. If it
was not for the Appellant the said coal would have turned into
ashes completely and would not have fetched the value it has
in the auction sale. The Appellant for no fault of theirs were
unable to use the said plot for storing other cargo and have
lost huge revenue which they are not claiming. Furthermore,
the Appellant has taken continuous efforts for preservation,
shifting and sale of the cargo. Under their agreement with
Bhatia Group of Companies the Appellant had a lien on the
cargo for the charges incurred for maintaining the cargo and
ground rent. The Appellant has a total outstanding claim of
Rs.1,24,50,338.00 (Rupees One Crore Twenty Four lakhs Fifty
Thousand Three Hundred and Thirty Eight Only) towards
storing and maintaining the cargo discharged at the plot
allotted to them from the above mentioned two (2) vessels.
However, despite filing all the documents in proof of the
abovementioned amounts being due to them, the learned
Single Judge has passed an order dated 07.10.2023 directing a
NEUTRAL CITATION
C/OJA/7/2023 ORDER DATED: 18/02/2025
undefined
sum of Rs.17,34,632.00 alongwith accrued interest to be paid
to the appellant from the sale proceeds.
3. Feeling aggrieved and dissatisfied with the aforesaid
order dated 07.10.2023 passed by the learned Single Judge in
OJCA No. 1 of 2018 in R/PETN. under Arbitration Act No. 19 of
2017, the appellant has preferred this appeal.
4. Heard learned advocate Mr. Manoj Khatri assisted by
learned advocate Mr. Jwalit Soneji, appearing on behalf of the
appellant and Mr. S.N. Soparkar, learned senior advocate
assisted by learned advocate Mr. Harsh Parekh, appearing on
behalf of the Respondent No.1.
5. Learned advocate Mr. Khatri has submitted that the
impugned judgment and order passed by the learned Single
Judge is erroneous, illegal and unjust as the same is passed
without assigning any reason as to why their entire claim of
Rs.1,24,50,338.00 should not be paid to the appellant. He has
submitted that the learned Single Judge has completely
ignored and over looked the facts of the present case while
passing a perverse order by partly allowing the application and
NEUTRAL CITATION
C/OJA/7/2023 ORDER DATED: 18/02/2025
undefined
rejecting a major part of the claim made by the appellant,
without appreciating the entire facts and documents produced
by the appellant. He has submitted that the plot, where the
vehicle was kept alongwith the goods, was allotted to the
appellant and he had incurred a huge expenditure to keep the
vehicle alongwith the goods intact and he has received various
invoices for the same and therefore, the appellant is entitled to
recover the amount of Rs.1,04,81,548.00 as he has not
charged the amount towards barge charges.
5.1 In support of his submissions, learned advocate Mr. Khatri
has referred and relied upon the decision of the Hon'ble Apex
Court rendered in case of State Project Director, UP
Education For All Project Board & Ors. vs. Saroj Maurya
& Ors., in Civil Appeal No. 3465 of 2023, and emphasized
upon the observations made in paragraph 3, which reads as
under :
"3. We are of the opinion that in the absence of any reasoning
in the impugned judgment, the same cannot be sustained. In
this regard, we are benefitted by the following observations
made by this Court in CCT v. Shukla & Bros. The relevant
paragraphs of the judgment are extracted hereinbelow: -
"23. We are not venturing to comment upon the
correctness or otherwise of the contentions of law
raised before the High Court in the present petition, but
NEUTRAL CITATION
C/OJA/7/2023 ORDER DATED: 18/02/2025
undefined
it was certainly expected of the High Court to record
some kind of reasons for rejecting the revision petition
filed by the Department at the very threshold. A litigant
has a legitimate expectation of knowing reasons for
rejection of his claim/prayer. It is then alone, that a
party would be in a position to challenge the order on
appropriate grounds. Besides, this would be for the
benefit of the higher or the appellate court. As
arguments bring things hidden and obscure to the light
of reasons, reasoned judgment where the law and
factual matrix of the case is discussed, provides lucidity
and foundation for conclusions or exercise of judicial
discretion by the courts.
24. Reason is the very life of law. When the reason of a
law once ceases, the law itself generally ceases
(Wharton's Law Lexicon). Such is the significance of
reasoning in any rule of law. Giving reasons furthers the
cause of justice as well as avoids uncertainty. As a
matter of fact it helps in the observance of law of
precedent. Absence of reasons on the contrary
essentially introduces an element of uncertainty,
dissatisfaction and give entirely different dimensions to
the questions of law raised before the higher/appellate
courts. In our view, the court should provide its own
grounds and reasons for rejecting claim/prayer of a
party whether at the very threshold i.e. at admission
stage or after regular hearing, howsoever concise they
may be.
25. We would reiterate the principle that when reasons
are announced and can be weighed, the public can have
assurance that process of correction is in place and
working. It is the requirement of law that correction
process of judgments should not only appear to be
implemented but also seem to have been properly
implemented. Reasons for an order would ensure and
enhance public confidence and would provide due
satisfaction to the consumer of justice under our justice
dispensation system. It may not be very correct in law
to say, that there is a qualified duty imposed upon the
NEUTRAL CITATION
C/OJA/7/2023 ORDER DATED: 18/02/2025
undefined
courts to record reasons.
26. Our procedural law and the established practice, in
fact, imposes unqualified obligation upon the courts to
record reasons. There is hardly any statutory provision
under the Income Tax Act or under the Constitution
itself requiring recording of reasons in the judgments
but it is no more res integra and stands unequivocally
settled by different judgments of this Court holding that
the courts and tribunals are required to pass reasoned
judgments/ orders. In fact, Order 14 Rule 2 read with
Order 20 Rule 1 of the Code of Civil Procedure requires
that, the court should record findings on each issue and
such findings which obviously should be reasoned would
form part of the judgment, which in turn would be the
basis for writing a decree of the court.
27. By practice adopted in all courts and by virtue of
judgemade law, the concept of reasoned judgment has
become an indispensable part of basic rule of law and,
in fact, is a mandatory requirement of the procedural
law. Clarity of thoughts leads to clarity of vision and
proper reasoning is the foundation of a just and fair
decision. In Alexander Machinery (Dudley) Ltd. [1974
ICR 120 (NIRC)] there are apt observations in this regard
to say "failure to give reasons amounts to denial of
justice". Reasons are the real live links to the
administration of justice. With respect we will contribute
to this view. There is a rationale, logic and purpose
behind a reasoned judgment. A reasoned judgment is
primarily written to clarify own thoughts; communicate
the reasons for the decision to the concerned and to
provide and ensure that such reasons can be
appropriately considered by the appellate/higher court.
Absence of reasons thus would lead to frustrate the very
object stated hereinabove."
5.2 Over and above the grounds agitated in the memo of
appeal, learned advocate Mr. Khatri has urged that the present
NEUTRAL CITATION
C/OJA/7/2023 ORDER DATED: 18/02/2025
undefined
appeal be allowed and the impugned judgment and order
passed by the learned Single Judge be quashed and set aside
and the amount claimed by the appellant before the learned
Single Judge be awarded in favour of the present appellant.
6. On the other hand, Mr. S.N. Soparkar, learned senior
advocate appearing on behalf of the respondent No.1, has
opposed the present appeal by way of filing affidavit-in-reply
and submitted that even from the bare reading of the
document produced at Pg. 231 of the compilation, the copy of
the ledger, which is the part of the original application, more
particularly the entry dated 22.12.2014, wherein, it was
debited by the present appellant as Barge Freight Charges to
the tune of Rs.1,07,15,706.00, against which, the closing
balance was Rs.1,04,81,546.00, meaning thereby, that the
remaining amount is Rs. 2,34,158.00. He has submitted that
the respondent has clarified that the calculation of the amount
of Rs.17,34,632.00 made by the Court is based upon the
clarification given by the respondent in paragraph 7 onwards in
the Preliminary Affidavit dated 06.01.2024 filed by the
respondent No.1 - Vitol S.A., wherein, proper calculation was
given and the copy of the ledger was also annexed with the
NEUTRAL CITATION
C/OJA/7/2023 ORDER DATED: 18/02/2025
undefined
same and therefore, the contention raised by the learned
advocate Mr. Khatri is not tenable. He has also submitted that
since the order was passed by the learned Single Judge with
the consent of the parties, therefore, now it does not lie in the
mouth of the appellant that the order was passed without
assigning any reason, which is contrary to the facts.
6.1 Referring to paragraph 14 of the affidavit-in-rejoinder
filed by the appellant, wherein disputed facts have been
countered by the appellant, learned senior advocate Mr.
Soparkar has submitted that it was mentioned that the
Respondent is relying on a YouTube recording of the statement
given by the Advocate of the Appellant at the hearing dated
20th February, 2023. In this recording, it is allegedly stated
that, the appellant would not pursue its purported claim
against BGTL for Barge Freight Charges against the sale
proceeds and that the Appellant would raise its purported
claim, meaning thereby, that except this, the only charges for
which the appellant is entitled to is of Rs.17,34,632.00.
6.2 In support of his submissions, learned senior advocate
Mr. Soparkar has referred and relied upon the decision of the
NEUTRAL CITATION
C/OJA/7/2023 ORDER DATED: 18/02/2025
undefined
Hon'ble Apex Court rendered in case of Y. Sleebachen and
Others vs. State of Tamil Nadu through Superintending
Engineer Water Resources Organisation / Public Works
Department and Another, reported in [2015] 5 SCC 747,
wherein, it has been observed and held in paragraphs 16 and
17 as under :
"16. In this behalf, we would like to reproduce the following
discussion in the judgment of this Court in the case of State of
Maharashtra v. Ramdas Nayak, (1982) 2 SCC 463.
"4. When we drew the attention of the learned Attorney
General to the concession made before the High Court, Shri
A.K. Sen, who appeared for the State of Maharashtra before
the High Court and led the arguments for the respondents
there and who appeared for Shri Antulay before us
intervened and protested that he never made any such
concession and invited us to peruse the written submissions
made by him in the High Court. We are afraid that we cannot
launch into an inquiry as to what transpired in the High
Court. It is simply not done. Public Policy bars us. Judicial
decorum restrains us. Matters of judicial record are
unquestionable. They are not open to doubt. Judges cannot
be dragged into the arena. "Judgments cannot be treated as
mere counters in the game of litigation". Per Lord Atkinson in
Somasundaran v. Subramanian We are bound to accept the
statement of the Judges recorded in their judgment, as to
what transpired in court. We cannot allow the statement of
the judges to be contradicted by statements at the Bar or by
affidavit and other evidence. If the judges say in their
judgment that something was done, said or admitted before
them, that has to be the last word on the subject. The
principle is well settled that statements of fact as to what
transpired at the hearing, recorded in the judgment of the
court, are conclusive of the facts so stated and no one can
contradict such statements by affidavit or other evidence. If a
party thinks that the happenings in court have been wrongly
recorded in a judgment, it is' incumbent, upon the party,
while the matter is still fresh in the minds of the judges, to
NEUTRAL CITATION
C/OJA/7/2023 ORDER DATED: 18/02/2025
undefined
call attention of the very judges who have made the record
to the fact that the statement made with regard to his
conduct was a statement that had been made in error. Per
Lord Buckmaster in Madhusudan v. Chanderwati That is the
only way to have the record corrected. If no such step is
taken, the matter must necessarily end there. Of course a
party may resile and an Appellate Court may permit him in
rare and appropriate cases to resile from a concession on the
ground that the concession was made on a wrong
appreciation of the law and had led to gross injustice; but, he
may not call in question the very fact of making the
concession as recorded in the judgment."
17. It is also pertinent to point out that here also, no application
was filed by the respondents before the District Court immediately
after the passing of decrees in compromise terms, or even
thereafter, for recall of the compromise order with the plea that
such a compromise was unacceptable as the Government Pleader
was not authorised to enter into any such settlement. Instead
appeals were filed before the High Court. We are of the opinion that
respondents should have approached the trial court in the first
instance as it is the trial judge before whom the compromise was
recorded and as he was privy to events that led to the compromise
order, he was in a better position to deal with this aspect."
6.3 Referring to the above decision, learned senior advocate
Mr. Soparkar has submitted that the appellant has no right to
challenge the impugned judgment and order passed by the
learned Single Judge and therefore, the present appeal be
dismissed and the order passed by the learned single Judge be
confirmed.
7. We have heard the learned advocates appearing for the
respective parties and perused the material placed on record.
NEUTRAL CITATION
C/OJA/7/2023 ORDER DATED: 18/02/2025
undefined
We have also considered the impugned judgment and order
dated 07.10.2023 passed by the learned Single Judge, wherein,
the learned Single Judge while dwelling into the issue relating
to the entitlement of the amount as claimed by the appellant,
has considered the submissions and after considering the legal
pronouncements referred and relied upon by both the sides,
has observed and held in paragraphs 46, 47, 49 and 50, which
read as under :
"46. It was submitted that as per the statement of account
submitted by the applicant USL, there was outstanding dues of Rs.
19,68,792.10 with regard to the storage charges of coal unloaded
from vessel M.V. Liberty Prudencia and as per the statement of
account produced on record for the storage charges of coal of
40600 M.T. unloaded from vessel M.V. IoIcos Confidence BGTL as on
4.07.2018, the outstanding balance is 10,481,546/-. It was
therefore, submitted that the applicant USL is not entitled to get
any amount from the sale proceeds deposited before this Court. It
was further submitted that the USL would be suffering no loss
whatsoever if they would have raised invoices during the pendency
of attachment and therefore, it is purely a private dispute between
USL and the respondent no.1- Judgment Debtor from whom USL can
seek to recover alleged loss in absence of any causal connection
with attachment levied by the Court in execution proceedings
against respondent no.1 Judgment Debtor and purported losses
sustained by USL.
47. Having heard the learned advocates for the respective parties
and considering the submissions advanced by the learned
advocates, Civil Application No. 1 of 2022 filed by the liquidator of
the company in liquidation Judgment Debtor is considered first
because if the said application is allowed then no further order
would be required to be passed in the matter.
49. As per the provisions of section 73 of the Code where assets are
held by Court and more persons than one have, before the receipt
of such assets, made application to the Court for the execution of
NEUTRAL CITATION
C/OJA/7/2023 ORDER DATED: 18/02/2025
undefined
decree for the payment of money passed against the same
judgment-debtor, then after deducting the costs of realization, the
Court is required to distribute the proceeds of the execution i.e.
amount realised on sale of assets ratably amongst all such persons.
Therefore, the moot question that would arise as to whether
amount realised on sale of the coal cargo by this Court as well as
amount deposited before the District Court, Morbi on sale of part of
coal cargo whether the said amount is required to be transferred to
the liquidator of the Judgment Debtor company or it is required to
be ratably distributed amongst the persons who have claimed
against the Judgment Debtor company.
50. It would, therefore, have to be determined as to whether
amount realised on sale of coal cargo would be of Liquidation Estate
of the company in liquidation which is a Judgment Debtor in
execution proceedings or not as per Section 36 of the IBC which
refers to Liquidation Estate. Division Bench of Bombay High Court in
case of Rikhabchand Mohanlal Surana (supra) had an occasion to
consider such issue and in facts of the said case appellant
Rikhabchand Mohanlal Judgment Creditor supplied certain goods to
the Sholapur Spinning and Weaving Company Ltd. Judgment Debtor
and as sale proceeds of the goods remained unpaid, suit was filed,
and decree was passed. However, subsequently, when the
Judgment Creditor filed an Execution Application seeking to attach
certain moneys in the hands of Canara Bank, Sholapur, an
attachment order under Order XXI Rule 46 of the Code was
accordingly passed and the bank deposited the amount in the
Court. Division Bench of the Bombay High Court therefore,
considered the issue as to what are rights of attaching creditor
when garnishee has deposited the money in the Court and a final
order is made by Executing Court, as Judgment Debtor was ordered
to be wound up under section 433 of the Companies Act, 1956.
Bombay High Court considered the commentary on Mulla's Code of
Civil Procedure and noticed that there are differences in England
and India respectively as to the position of attaching creditors as
under :
"Attachment creates no charge or lien upon the attached
property. It only confers a right on the decree-holder to have
the attached property kept in custodia legis for being dealt
with by the Court in accordance with law. It merely prevents
and avoids private alienations; it does not confer any title on
the attaching creditors. There is nothing in any of the
provisions of the Code which in terms makes the attaching
creditor a secured creditor or creates any charge or lien in
NEUTRAL CITATION
C/OJA/7/2023 ORDER DATED: 18/02/2025
undefined
his favour over the property attached. But an attaching
creditor acquires, by virtue of the attachment, a right to have
the attached property kept in custodia legis for the
satisfaction of his debt, and an unlawful interference with
that right constitutes an actionable wrong."
8. In view of above, we are of the opinion that the learned
Single Judge is justified in passing the impugned judgment and
order which is under challenge. On perusal of the aforesaid
facts and circumstances of the case and after considering the
submissions of both the sides and the decisions cited by both
the sides, we are of the opinion that the learned Single Judge
has not committed any error of facts and law in passing the
order and therefore, no interference is required to be called for
and thus, the present appeal, being devoid of any merits,
deserves to be dismissed. Hence, the appeal is hereby
dismissed.
9. Learned advocate Mr. Khatri has lastly urged that the
amount which is deposited and lying in the Nazir Department
of this Court be permitted to be withdrawn, for which the other
side has no objection.
9.1 Registry is therefore, directed to pay the amount of
NEUTRAL CITATION
C/OJA/7/2023 ORDER DATED: 18/02/2025
undefined
Rs.17,34,632.00 with interest, if any, accrued thereon to the
appellant - United Shippers Ltd. and pay the remaining amount
of Rs.5,05,65,368.00 with interest, if any accrued thereon to
the respondent No.1 Decree Holder - M/s. Vistol S.A. as
observed by the learned Single Judge, through Account Payee
Cheque / RTGS after proper verification.
10. In view of the disposal of the appeal, pending civil
application, if any, also stands disposed of.
(BIREN VAISHNAV, ACJ)
(HEMANT M. PRACHCHHAK,J)
Dolly
