(1)
M/S. SURENDRA TRADING COMPANY Vs.
M/S. JUGGILAL KAMLAPAT JUTE MILLS COMPANY LIMITED .....Respondent D.D
19/09/2017
Facts:The case pertains to the interpretation of Section 9(5) of the Insolvency and Bankruptcy Code, 2016, concerning the time limit for rectifying defects in the application for the initiation of the corporate insolvency resolution process.Issues:Whether the time limit mentioned in the proviso for subsection (5) of Section 9 of the Insolvency and Bankruptcy Code, 2016, is mandatory or directory i...
(2)
MUNICIPAL CORPORATION OF DELHI Vs.
DHARMA PROPERTIES PVT. LTD. .....Respondent D.D
15/09/2017
Fact: The Municipal Corporation of Delhi issued a notice under Section 126 of the Delhi Municipal Corporation Act, 1957, proposing to enhance the rateable value of a property owned by Dharma Properties Pvt. Ltd. The notice was received by the respondent after the specified period.Issues:Whether the notice received after the specified period would be invalid.Whether the assessment for subsequent/fu...
(3)
RATANLAL Vs.
PRAHLAD JAT .....Respondent D.D
15/09/2017
Facts: The appellant, Ratanlal, challenged the High Court's decision to allow the re-examination of two witnesses, PW4 and PW5, in a criminal trial. The witnesses had initially supported the prosecution but later filed applications claiming their earlier statements were made under police influence.Issues: Whether the High Court was justified in setting aside the Sessions Judge's order an...
(4)
RE-INHUMAN CONDITIONS IN 1382 PRISONS Vs.
RE-INHUMAN CONDITIONS IN 1382 PRISONS D.D
15/09/2017
Facts: The case stemmed from a letter by (Retd.) Chief Justice R. C. Lahoti highlighting unnatural deaths in prisons, which was treated as a public interest litigation. The focus was on addressing the alarming number of unnatural deaths, particularly suicides, in prisons across India.Issues:Defining natural and unnatural deaths.Addressing suicides in prisons and implementing prevention strategies....
(5)
STATE OF HARYANA Vs.
HINDUSTAN CONSTRUCTION COMPANY .....Respondent D.D
15/09/2017
Facts:The respondent's sales tax assessment for the assessment year 1998-99 was completed under the Haryana General Sales Tax Act, 1973, with a refund ordered on 12.05.2000.The Act of 1973 was repealed by the Haryana Value Added Tax Act, 2003, on 01.04.2003.A show cause notice was issued to the respondent on 07.06.2004 regarding the earlier refund, invoking suo-moto revisional powers under Se...
(6)
STATE OF MAHARASHTRA Vs.
RELIANCE INDUSTRIES LTD. .....Respondent D.D
15/09/2017
Facts: The case involved the acquisition of part of a building without acquiring the land underneath by the State of Maharashtra. The owner of the building was different from the owner of the land, which belonged to the government.Issues:Whether it is permissible for the State to acquire part of a building without acquiring the land underneath, where the ownership of the land lies with the governm...
(7)
ANNAII MEDICAL COLLEGE AND HOSPITAL AND ANR Vs.
UNION OF INDIA AND ANR .....Respondent D.D
14/09/2017
Facts: The petitioners challenged the decision of the Central Government to decline confirmation of a conditional Letter of Permission (LOP) for establishing a new medical college. Despite the petitioners' application for the academic session 2016-17, the Ministry of Health & Family Welfare, based on the Medical Council of India's (MCI) recommendation, barred the college from admitti...
(8)
ASSOCIATION OF ENGINEERS Vs.
GOVERNMENT OF TAMIL NADU .....Respondent D.D
14/09/2017
Facts:The case involved a challenge to the recruitment ratio for Assistant Engineers in the Tamil Nadu Engineering Service.Various government orders and amendments to rules dating back to 1972 were considered.Dispute arose regarding the eligibility criteria and recruitment methods for Assistant Engineers.Issues:Whether the recruitment ratio prescribed by the Tribunal was appropriate.Interpretation...
(9)
CHRISOMAR CORPORATION Vs.
MJR STEELS PRIVATE LIMITED .....Respondent
Sections, Acts, Rules, and Articles mentioned:
Section 5: Admiralty Courts Act, 1861
Section 62: Contract Act, 1872
Subject:
Contract Law - Admiralty Law - Maritime Claims - Ownership of Vessels
Headnotes:
Facts:
Including the supply of necessaries to a vessel owned by Third Element Enterprises, the subsequent legal proceedings initiated by Chrisomar Corporation to recover its dues, and the dispute regarding ownership of the vessel at the time of arrest.
Issues:
The applicability of Sections 62 and 63 of the Indian Contract Act.
Clarification on the distinction between maritime claims and maritime liens.
Determination of the relevant date for asserting a maritime claim.
Examination of whether the subsequent agreement between the parties constituted novation of the original contract.
Burden of proof regarding ownership of the vessel.
Held:
The court held that Section 63 of the Contract Act applied to the facts of the case, as the subsequent agreement did not completely replace the original contract but dealt with one aspect (payment) while keeping the original transaction alive.
It was clarified that while necessaries supplied to a vessel constitute a maritime claim, they do not automatically create a maritime lien on the vessel.
The court determined that a maritime claim can only be asserted at the time of vessel arrest, not at the time of institution of the suit.
The argument that the subsequent agreement amounted to novation of the original contract was rejected, as it was found to reinforce the original contract rather than supersede it.
The burden of proof regarding ownership of the vessel was found to be on the respondent, who failed to prove the change of ownership in their favor at the time of arrest.
Decision: The appeal was allowed, setting aside the judgment of the High Court and restoring the decree of the trial court in favor of Chrisomar Corporation.
Referred Cases:
Anandram Mangturam Vs. Bholaram Tanumal, AIR 1946 Bom 1 at 6
Bailey Petroleum Company Vs. Owners and parties interested in the vessel M.V. Dignity, (1993) 2 CHN 208 at 213-214
Bhajan Lal Vs. State of Punjab, (1971) 1 SCC 34
Chunna Mal Ram Nath Vs. Mool Chand- Ram Bhagat, (1928) I.L.R. 9 Lah. 510 518 : L.R. 55 I.A. 154 160
Currie Vs. M'Knight, (1897) AC 97
Harmer Vs. Bell, (1851) 7 Moo PC 267 : 13 ER 884
Hillas Vs. Arcos, (1932) All ER 494 at 503-504
Juggilal Kamlapat Vs. N.V. Internationale Crediet-En- Handels Vereeninging `Rotter-dam', AIR 1955 Cal 65
Justice Story, The United States Vs. The Big Malek Adhel, 43 US 2 How 210, 233 1844
Kapur Chand Godha Vs. Mir Nawab Himayatalikhan Azamjah, (1963) 2 SCR 168
Lachmeshwar Prasad Shukul Vs. Keshwar Lal Chaudhuri, (1940) FCR 84 : AIR 1941 FC 5
M.V. Al Quamar Vs. Tsavliris Salvage International Ltd., (2000) 8 SCC 278 at 301
M.V. Elisabeth Vs. Harwan Investment and Trading Private Limited, (1993) Sup 2 SCC 433 at 462
Mohammed Saleh Behbehani & Company Vs. Bhoja Trader, (1983) 2 Calcutta Law Journal 334. At 344
P. Venkateswarlu Vs. Motor & General Traders, (1975) 1 SCC 770, 772 : AIR 1975 SC 1409, (1410)
Patterson Vs. State of Alabama, (1934) 294 US 600, 607
poch Enterrepots Vs. M.V. Won Fu, (2003) 1 SCC 305 at 311, paragraph 13
Rameshwar Vs. Jot Ram, (1976) 1 SCR 847 at 851-52
Saba International Shipping and Project Investment Private Limited Vs. Owners and parties interested in the Vessel M.V. Brave Eagle, previously known as M.V. Lima-I, (2002) 2 CHN 280 at 287-288 and 289-290
Satya Jain Vs. Anis Ahmed Rushdie, (2013) 8 SCC 131 at 143
Shell Oil Co. Vs. Ship Lastrigoni, (1974) 3 All England Reports 399
JUDGMENT
R.F. Nariman, J.—The present appeal raises several interesting questions which arise in admiralty law. The vessel, M.V. Nikolaos-S, was owned by one Third Element Enterprises, a Cyprus company, and was flying the flag of the Republic of Cyprus. The plaintiff in the admiralty suit, who is the appellant before us, supplied bunkers and other necessaries to the said vessel at the port of Durban on terms and conditions agreed between the parties in November, 1999. According to the plaintiff, the bunkers were received by the master of the vessel and services were rendered to the vessel as acknowledged by the master. The plaintiff raised invoices on 26.11.1999 for US$ 94,611.25 which have not yet been paid.
2. When the vessel docked in the port of Haldia, the plaintiff filed admiralty suit No.1 of 2000 in the Calcutta High Court praying for an arrest of the vessel because, according to the plaintiff, the necessaries supplied to the vessel would not only amount to a maritime claim but would also be a maritime lien on the vessel. By an order dated 6.1.2000, the vessel was so arrested but nobody came forward for release of the vessel at that point of time. It is only on 25.1.2000 that learned counsel appearing on behalf of the plaintiff approached the learned admiralty Judge expressing the plaintiff's intention not to proceed with the application for arrest as, according to him, the parties had reached an out of court settlement. The order passed on 25.1.2000 reads as follows:-
"The Court by an order dated January 6, 2000 directed that the vessel known as M.V.Nikolaos - S was to be arrested. On the returnable date no one appeared on behalf of the respondents. The directions for affidavits had been given on January 10, 2000. Today when the matter was called on for hearing, counsel appearing for the petitioner submitted that an out of court settlement has been reached between the parties and the petitioner was not inclined to proceed with the matter any further. For these reasons, this application is dismissed for non prosecution.
All interim orders are vacated.
The vessel shall cease to be under arrest as of now."
3. It is important at this stage to advert to the agreement that was entered into on 18.1.2000. Since both sides have argued extensively on the aforesaid agreement, it is necessary to set it out completely. The said agreement reads as follows:-
"AGREEMENT GUARANTEE
In Piraeus and at the offices of "LALLIS OUTSINOS ANAGNOSTOPOULOS" Lawyers Maritime Consultants of 100, Kololotroni Street, Piraeus, this Tuesday the 18th January 2000, by and between:
A. CHRISOMAR CORPORATION, a company duly established and operating under the laws of Liberia, maintaining an office in Greece (5 Solomou Str. Kifissia) (hereinafter called Chrisomar), duly represented, for the purpose of this agreement by its authorized lawyer Mr. Dimitrios Voutsinos,
B. THIRD ELEMENT ENTERPRISES LTD, a company duly established and operating under the laws of Cyprus (hereinafter called "THE SHIPOWNERS"), duly represented for the purpose of this agreement by the President of the Board of Directors, Mr. Sotirios Soulkas, who also declared that he has the necessary authorization and capacity to bind the company to this agreement by his sole signature.
C. Sotirios Soukas, of 145 Filonos Str, Piraeus, the following were stated and agreed.
WHEREAS
1. The shipowners are the legal owners of the Cyprus flag vessel Nikolaos S, Int. Sign: P 3 KT 6 ("the vessel") managed in Greece by Suter Shipping and Trading Ltd.
2. Chrisomar has sold and delivered to the vessel in the port of Durban a certain quantity of bunkers, on or about 26th November, 1999, Chrisomar has issued its invoice no. 99232/15.12.1999 for the amount of USD 94,611.25, payable on 26th November, 1999 (Copy of the invoice is attached herewith as app. I).
3. The owners have failed to pay the amount of the above invoice by the 26th November 1999 and consequently, Chrisomar arrested the vessel in the port of Haldia, India for security of the above claim.
THE PARTIES AGREE AS FOLLOWS
1. The shipowners hereby confirm that they owe to Chrisomar USD 104,688.60, analysed as follows: USD 94,611.25 for the invoice amount + USD 2,177.35 for interest accrued + USD 7,900.00 for legal costs.
2. The shipowners, through their President Mr. Sotirios Soukas, represent to Chrisomar that (a) their vessel is due to be chartered out for a voyage from Bangkok, Thailand to ports of West Africa as against a freight of about USD 35.00 per metric ton of cargo; (b) that if Chrisomar releases their vessel from the above arrest shall be able to proceed to Bangkok for loading and to perform the intended charter voyage; (c) that the shipowners as soon as their vessel is released from its arrest by Chrisomar shall include in their recap and charter party with the intended charterers of their vessel a clause that part of the freight amounting to USD 104,668.60 shall be paid directly by the charterers to Chrisomar's bank account as follows:
ANZ GRINDLAYS BANK
21, Akti Miaouli, 18535 Piraeus
Swift: GRNDGRAA,
A/C No. 815142 USD 40632
In favour of Chrisomar Corp.
3. The above recap shall be faxed by the shipowners to Chrisomar one (1) working day after its conclusion.
4. The shipowners will not sell their vessel prior to the satisfaction of Chrisomar's above claim and shall provide Chrisomar with a report by fax of the movements of their vessel every five (5) days.
5. The above payment shall be made in full and final settlement of Chrisomar's above claim per capital and costs.
6. If, for any reason the above amount is not paid to Chrisomar within ten (10) working days after the ships sailing from the port of loading Bangkok or, the shipowners are in breach of any of the representations and obligations set out in paras 2, 3 and 4 above then Chrisomar will be entitled to take all the appropriate legal steps including the arrest of the vessel for recovering the above amount or any higher one which they may be entitled to.
7. Sotirios Soukas hereby guarantees to Chrisomar and in favour of the shipowner the due payment of the above amount, working the right of division and exclusion i.e. he admits that he will pay amounts due to Chrisomar without the latter having first to enforce its claim against the shipowners and their vessel.
8. If the vessel is lost, for any reason or if the mortgagee bank or any other claimant arrests the vessel before reaching Bangkok and as a result, the shipowners are unable to proceed for loading to Bangkok, and thus execute the above stated charter voyage, the above obligations of the guarantor shall cease to exist but Chrisomar will maintain its rights of recovery only against the shipowners and the vessel but not against the guarantor.
9. This agreement is subject to Greek law and the exclusive jurisdiction of the Piraeus Courts."
4. It appears that nothing in the meanwhile happened. At no point of time did the vessel sail for the port of Bangkok - it remained continuously in Haldia. It is only on 2.5.2000 that the vessel was re-arrested. The Court recorded that no payment had yet been made and that the claim of the plaintiff continued to remain unsatisfied. It is this re-arrest that is the bone of contention between the parties in the present matter.
5. A written statement was filed on behalf of respondent no.1, MJR Steels, an Indian company who allegedly purchased the vessel from one Fairsteel Corporation, Singapore. Apparently, an agreement was entered into between Fairsteel and respondent no.1 on 21.1.2000. The written statement filed by respondent no. 1 alleged:
"The said vessel was originally owned by The Third Element Enterprises Shipping Ltd. Third Element Enterprises Shipping Ltd. sold and transferred the said vessel to Eastern Wealth Investment Ltd. Eastern Wealth Investment Ltd. sold and transferred the said vessel to Fairsteel Corporation. Fairsteel Corporation sold and transferred the said vessel to this defendant. This defendant acquired the right, title or interest in respect of the said vessel from the said Fairsteel Corporation."
6. The learned single Judge by his judgment and order dated 28.4.2005 listed as many as seven issues and adverted to the fact that three witnesses were called on behalf of the plaintiffs, who not only deposed and were cross-examined, but also produced various documents. The defendants, however, did not produce any witness but tendered as their evidence six exhibits which were produced only through the plaintiff's witnesses.
7. According to the learned single Judge, the order of 25.1.2000 made it clear that suit No.1 of 2000 was kept alive and remained alive on the date of the re-arrest, namely, 2.5.2000. All that was done by the order dated 2.5.2000 was to recall the order dated 25.1.2000, and when that was done, the original order of arrest was automatically revived. This being the case, it is clear that the plaintiffs were entitled to recover their dues. The learned single Judge further went on to hold that respondent no.1's claim that ownership had changed and that they had become owners of the vessel in April, 2000, was not conclusively proved. The single Judge referred, among other documents, to a suit filed by respondent no.1 against Fairsteel Corporation on 9.5.2000 in which respondent no.1 prayed for a decree for rescission of the agreement for sale dated 21.1.2000, as also for cancellation of the said agreement, and perpetual injunction restraining Fairsteel from claiming any money under the Letter of Credit furnished by respondent no.1. It recorded that the said suit was dismissed for non-prosecution on 12.10.2004, and from the averments made in the said suit, it was clear that there was no concluded sale in favour of respondent no.1.
8. An appeal to the Division Bench by respondent no.1 however succeeded. By the impugned judgment dated 13.9.2006, it was held that the plaintiff's first witness admitted the fact that the vessel's ownership changed hands and that on the date of re-arrest, i.e. 2.5.2000, it was respondent no.1 who was the owner. It also examined various documents to arrive at the conclusion that the vessel physically changed hands on 15.4.2000 and payments under the Letter of Credit were made pursuant to the agreement dated 21.1.2000 on 26.4.2000. The Division Bench further went on to hold that though the allegation as regards the successive transfers of title had not been proved by the defendant, the said fact would make no difference. It also went on to hold that there could be a good title by estoppel. The Division Bench further went on to apply Section 62 of the Indian Contract Act, 1872 to the out of court settlement dated 18.1.2000 and stated that as there was a novatio of the original agreement in law, the original cause of action pleaded in admiralty Suit No. 1 of 2000 no longer subsisted. Therefore, the claim made in the suit was held to have been abandoned when the settlement dated 18.1.2000 was acted upon. In this view of the case, the Division Bench reversed the single Judge's decision and held that the suit was liable to be dismissed on all these grounds.
9. Shri Shyam Divan, learned senior counsel appearing on behalf of the appellants, has argued before us that the agreement dated 18.1.2000 would not amount to a novatio of the original agreement. According to him, the original agreement continued and was in fact enforced by the second order of arrest dated 2.5.2000. According to him, the right that was vested in the appellant on 5.1.2000, i.e. the date of the institution of the suit, is alone material, and it is on that date, and not the date of arrest on 2.5.2000, that the ownership of the vessel has to be seen. For this purpose, he cited certain English precedents. He also cited an American judgment to buttress his submission that the present was a case not merely of a maritime claim but also of a maritime lien in that necessaries supplied to the vessel would amount to a maritime lien. According to him, in any event, on facts, the Division Bench was completely wrong in arriving at a conclusion that there was a concluded sale in April, 2000 in favour of respondent no.1 inasmuch as several documents produced by the plaintiff's witnesses would show that no such sale had, in fact, taken place.
10. Shri Banerjee, learned senior counsel appearing on behalf of the respondents, has countered each of these submissions. According to Shri Banerjee, the Division Bench is absolutely correct. The present is the case of enforcement of a maritime claim, but there is no maritime lien in law for necessaries supplied to the vessel. This being the case, it is important to know who the owner of the vessel is on the date of arrest, i.e. on 2.5.2000. If the owner is respondent no.1, then a claim for necessaries against the original owner, Third Element, on the date of institution of the suit would not lie against the respondent on the date of arrest. According to learned counsel, English authorities cited by Shri Divan would not apply to the present case as in England there is a completely different procedure for arresting a vessel. A writ of summons is issued under Order 53 of the U.K. Civil Procedure Code for service outside the jurisdiction of the court which is kept alive for a period of six months. Further, according to learned counsel, Section 62 of the Contract Act is squarely attracted inasmuch as the settlement dated 18.1.2000 completely replaced the original agreement as a result of which the original cause of action pleaded in the suit has disappeared. Learned counsel also painstakingly took us through various documents to show that the sale of the vessel to respondent no.1 had indeed taken place in April, 2000 and that, therefore, on the date of arrest, i.e. 2.5.2000, since his client was the owner of the vessel, the amounts could not be recovered from respondent no.1.
11. Admiralty law in England, as was held by Lord Halsbury in Currie v. M'Knight 1897 AC 97, is derived from the laws of Oleron[1*] and other ancient maritime codes like the Rhodian Sea Law, the Basilika, the Assizes of Jerusalem, the Baltic Laws of Wisbuy and the Hanseatic Code. In England, the common law courts could not give effective redress to cases which arose in admiralty, which were then left to the jurisdiction of specialist admiralty Judges. By the 18th Century, the admiralty jurisdiction had fallen into "a feeble and neglected condition, and for long its proceedings excited no attention" [2*]. The Admiralty Court Act, 1840 was the first of a series of statutes extending and defining the jurisdiction of the High Court of Admiralty in England. This was followed by the 1861 Admiralty Court Act and various subsequent enactments which were consolidated by the Supreme Court of Judicature (Consolidation) Act, 1925. By the Administration of Justice Act of 1956, the admiralty jurisdiction of the High Court was further widened and the Supreme Court Act of 1981 now defines what the admiralty jurisdiction of the High Court in England is.
[1* The rolls of Oleron are associated with the island of Oleron, off the coast of Western France, which was the site of an ancient maritime court associated with a seaman's guild of the Atlantic. In England, they were promulgated by Eleanor of Aquitaine, wife of Henry II, as vice-regent for her son King Richard I, while the latter was fighting the Saracens on the Third Crusade. King Henry VIII later published these rolls as, "The judgment of the sea, of Masters, of Mariners and Merchants, and all their doings". They are expressly included in the compilation of English admiralty law, the "Black Book of the Admiralty".]
[2* See, Roscoe's Admiralty Practice, 5th edn. at Pg. 14.]
12. Insofar as our law is concerned, the admiralty law of the chartered High Courts has historically been traced to the charters of 1774 and 1798 as subsequently extended and clarified by the Letters Patents of 1823, 1862 and 1865. The Admiralty Court Act, 1840 and 1861, and the Colonial Courts of Admiralty Act, 1890 and 1891 essentially stated what the admiralty law in this country is, and these enactments continued as existing laws under Article 372 of the Constitution of India. Some of the relevant provisions of these Acts are set out hereinbelow:-
"Admiralty Court Act, 1840
6. The court in certain cases may adjudicate, etc.- The High Court of Admiralty shall have jurisdiction to decide all claims and demands whatsoever in the nature of salvage for services rendered to or damage received by any ship or seagoing vessel or in the nature of towage, or for necessaries supplied to any foreign ship or seagoing vessel, and to enforce the payment thereof, whether such ship or vessel may have been within the body of a country, or upon the high seas, at the time when the services were rendered or damage received, or necessaries furnished, in respect of which such claim is made.
Admiralty Court Act, 1861
5. As to claims for necessaries.-The High Court of Admiralty shall have jurisdiction over any claim for necessaries supplied to any ship elsewhere than in the port to which the ship belongs, unless it is shown to the satisfaction of the court that at the time of the institution of the cause any owner or partowner of the ship is domiciled in England or Wales: Provided always, that if in any such cause the plaintiff do not recover twenty pounds, he shall not be entitled to any costs, charges, or expenses incurred by him therein, unless the judge shall certify that the cause was a fit one to be tried in the said Court.
Colonial Courts of Admiralty Act, 1890
2. Colonial Courts of Admiralty.-(1) Every court of law in a British possession, which is for the time being declared in pursuance of this Act to be a Court of Admiralty, or which, if no such declaration is in force in the possession, has therein original unlimited civil jurisdiction, shall be a Court of Admiralty, with the jurisdiction in this Act mentioned, and may for the purpose of that jurisdiction, exercise all the powers which it possesses for the purpose of its other civil jurisdiction and such Court in reference to the jurisdiction conferred by this Act is in this Act referred to as a Colonial Court of Admiralty. ...
(2) The jurisdiction of a Colonial Court of Admiralty shall, subject to the provisions of this Act, be over the like places, persons, matters, and things, as the admiralty jurisdiction of the High Court in England, whether existing by virtue of any statute or otherwise and the Colonial Court of Admiralty may exercise such jurisdiction in like manner and to as full an extent as the High Court in England, and shall have the same regard as that Court to international law and the comity of nations.
Colonial Courts of Admiralty (India) Act, 1891
2. Appointment of Colonial Courts of Admiralty.- The following courts of unlimited civil jurisdiction are hereby declared to be Colonial Courts of Admiralty, namely:
(1) the High Court of Judicature at Fort William in Bengal,
(2) the High Court of Judicature at Madras, and
(3) the High Court of Judicature at Bombay."
13. The Republic of India has finally woken up to the need for updating its admiralty law. The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 has been made by Parliament and has received the assent of the President on 9.8.2017, though it has not yet been brought into force. In this Act, "maritime claim" is defined in Section 2(1)(f) as being a claim referred to in Section 4 and a "maritime lien" is defined in sub-section (g) of 2(1) as follows:
"2. Definitions
(1) In this Act,-
(g) "maritime lien" means a maritime claim against the owner, demise charterer, manager or operator of the vessel referred to in clauses (a) to (e) of subsection (1) of section 9, which shall continue to exist under sub-section (2) of that section;"
Section 4 reads as follows:
"4. Maritime Claim
(1) The High Court may exercise jurisdiction to hear and determine any question on a maritime claim, against any vessel, arising out of any-
(a) dispute regarding the possession or ownership of a vessel or the ownership of any share therein;
(b) dispute between the co-owners of a vessel as to the employment or earnings of the vessel;
(c) mortgage or a charge of the same nature on a vessel;
(d) loss or damage caused by the operation of a vessel;
(e) loss of life or personal injury occurring whether on land or on water, in direct connection with the operation of a vessel;
(f) loss or damage to or in connection with any goods;
(g) agreement relating to the carriage of goods or passengers on board a vessel, whether contained in a charter party or otherwise;
(h) agreement relating to the use or hire of the vessel, whether contained in a charter party or otherwise;
(i) salvage services, including, if applicable, special compensation relating to salvage services in respect of a vessel which by itself or its cargo threatens damage to the environment;
(j) towage;
(k) pilotage;
(l) goods, materials, perishable or non-perishable provisions, bunker fuel, equipment (including containers), supplied or services rendered to the vessel for its operation, management, preservation or maintenance including any fee payable or leviable;
(m) construction, reconstruction, repair, converting or equipping of the vessel;
(n) dues in connection with any port, harbour, canal, dock or light tolls, other tolls, waterway or any charges of similar kind chargeable under any law for the time being in force;
(o) claim by a master or member of the crew of a vessel or their heirs and dependents for wages or any sum due out of wages or adjudged to be due which may be recoverable as wages or cost of repatriation or social insurance contribution payable on their behalf or any amount an employer is under an obligation to pay to a person as an employee, whether the obligation arose out of a contract of employment or by operation of a law (including operation of a law of any country) for the time being in force, and includes any claim arising under a manning and crew agreement relating to a vessel, notwithstanding anything contained in the provisions of sections 150 and 151 of the Merchant Shipping Act, 1958;
(p) disbursements incurred on behalf of the vessel or its owners;
(q) particular average or general average;
(r) dispute arising out of a contract for the sale of the vessel;
(s) insurance premium (including mutual insurance calls) in respect of the vessel, payable by or on behalf of the vessel owners or demise charterers;
(t) commission, brokerage or agency fees payable in respect of the vessel by or on behalf of the vessel owner or demise charterer;
(u) damage or threat of damage caused by the vessel to the environment, coastline or related interests; measures taken to prevent, minimise, or remove such damage; compensation for such damage; costs of reasonable measures for the restoration of the environment actually undertaken or to be undertaken; loss incurred or likely to be incurred by third parties in connection with such damage; or any other damage, costs, or loss of a similar nature to those identified in this clause;
(v) costs or expenses relating to raising, removal, recovery, destruction or the rendering harmless of a vessel which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such vessel, and costs or expenses relating to the preservation of an abandoned vessel and maintenance of its crew; and
(w) maritime lien.
Explanation.-For the purposes of clause (q), the expressions "particular average" and "general average" shall have the same meanings as assigned to them in sub-section (1) of section 64 and sub-section (2) of section 66 respectively of the Marine Insurance Act, 1963.
(2) While exercising jurisdiction under sub-section (1), the High Court may settle any account outstanding and unsettled between the parties in relation to a vessel, and direct that the vessel, or any share thereof, shall be sold, or make such other order as it may think fit.
(3) Where the High Court orders any vessel to be sold, it may hear and determine any question arising as to the title to the proceeds of the sale.
(4) Any vessel ordered to be arrested or any proceeds of a vessel on sale under this Act shall be held as security against any claim pending final outcome of the admiralty proceeding."
14. Under Section 5 of the Act, the High Court may order for the arrest of a vessel which is within its jurisdiction for the purpose of providing security against a maritime claim. Under Section 6 of the said Act, the High Court may also exercise admiralty jurisdiction by an order in personam in respect of the maritime claims referred to in Section 4. Section 9 of the Act sets out the inter se priority of maritime liens, but in so doing also informs us that they are restricted to five subject matters only. Section 9 reads as follows:
"Sec. 9 Inter se priority on maritime lien
(1) Every maritime lien shall have the following order of inter se priority, namely:-
(a) claims for wages and other sums due to the master, officers and other members of the vessel's complement in respect of their employment on the vessel, including costs of repatriation and social insurance contributions payable on their behalf;
(b) claims in respect of loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the vessel;
(c) claims for reward for salvage services including special compensation relating thereto;
(d) claims for port, canal, and other waterway dues and pilotage dues and any other statutory dues related to the vessel;
(e) claims based on tort arising out of loss or damage caused by the operation of the vessel other than loss or damage to cargo and containers carried on the vessel.
(2) The maritime lien specified in sub-section (1) shall continue to exist on the vessel notwithstanding any change of ownership or of registration or of flag and shall be extinguished after expiry of a period of one year unless, prior to the expiry of such period, the vessel has been arrested or seized and such arrest or seizure has led to a forced sale by the High Court:
Provided that for a claim under clause (a) of subsection (1), the period shall be two years from the date on which the wage, sum, cost of repatriation or social insurance contribution, falls due or becomes payable.
(3) The maritime lien referred to in this section shall commence-
(a) in relation to the maritime lien under clause (a) of sub-section (1), upon the claimant's discharge from the vessel;
(b) in relation to the maritime liens under clauses (b) to (e) of sub-section (1), when the claim arises,
and shall run continuously without any suspension or interruption:
Provided that the period during which the vessel was under arrest or seizure shall be excluded.
(4) No maritime lien sh D.D
14/09/2017
Facts:Including the supply of necessaries to a vessel owned by Third Element Enterprises, the subsequent legal proceedings initiated by Chrisomar Corporation to recover its dues, and the dispute regarding ownership of the vessel at the time of arrest.Issues: The applicability of Sections 62 and 63 of the Indian Contract Act. Clarification on the distinction between maritime claims and maritime lie...