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CASE NO.:

Appeal (civil) 7039 of 2002

PETITIONER:

Epoch Enterrepots

RESPONDENT:

M.V. WON FU

DATE OF JUDGMENT: 29/10/2002

BENCH:

Umesh C. Banerjee & Y.K. Sabharwal.

JUDGMENT:

JUDGMENT

BANERJEE,J.

Leave granted.

Issuance of warrant for the arrest of the vessel M.V. WON FU berthed

at Madras Port has been the principal controversy before the Madras High

Court in its Admiralty Jurisdiction.

The plaintiff being the appellant herein instituted a suit for recovery of

damages of 11 lakhs for breach of contract with interest at the rate of 24%

per annum by reason of loss and damages suffered and caused by breach of

contract by the defendant vessel. The factual element we will refer shortly

here after but presently be it noted that against the refusal to entertain the

suit and the consequent dismissal of the same before the learned trial judge,

the plaintiff moved the appellate forum in the High Court but having failed

to obtain the relief the petition for special leave under Article 136 has been

moved before this Court and this Court at the admission stage itself upon

issuance of notice and upon the grant of leave as appears herein before

proceeded to deal with the issue without much of procedural formalities.

Turning attention to a brief reference on to the factual score it appears

that the plaintiff being a sole proprietor concern stands involved in the

business of export of mines and minerals especially in Feldspar. In the usual

course of events plaintiff entered into an agreement with M/s. SAN I.

Mining Company at Taiwan to export Feldspar and to complete the

agreement between the parties the plaintiff entered into an agreement with

said to be defendant's ship disponent owner, to export the cargo of Feldspar

from Tuticorin harbour to Taiwan. The agreement is stated to be evidenced

in a fixture note dated 20.10.1995. The relevant extract whereof are as

below:

"It is this day mutually agreed between Taiyo

Senpaku Kaisha, Ltd. Tokyo as disponent owners and

Epoch Entrrepots. Madras as charterers on the following

terms and conditions

- Vessel: X/Y WONFU AS DESCRIBED.

- Cargo: XIN 8.000 MI IN IF BLS FELDSPAR

UPTO VSLS FULL CAPA CHOP

- L/D Port: 1SB SP Tuticorin India/1-SB 1 SP

TAICHUNG, TAIWAN

-Laycan: 25th Oct-5th Nov.1995

-L/D Rate: 1.200 XT PWDSSEX BIU/1.500MT

PWDSEEX W IUARC

-Freight: VSD 25.00 PWI FIOST BSS 1/1

-Payment: 100 pet frt payable w/I 5 banking days acol

S/BLS/L

FET prepaid

-Full frt TB deexed earned by ovrs CH is discountless

non-returnable whether CGO/VSL Lost or not lost.

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-CGO TB loaded in unobstructed main hold only

-Demurrage: USS 4000.00/DHD Vis be

-Agents Owners Agents be

..

Disponent owners Charterers

TAIYO Senpaku Kaisha Ltd. Manager

M. Takahashi, Managing EPOCH Entrepots

Director Suguna Apartments

12-A, Lloyds Road,

Madras 600 014"

On the factual matrix the learned Senior Advocate Mr. ATM Sampath

rather emphatically contended that the contract stands completed by the

signing of the fixture note and the plaintiff has also acted in terms therewith

by exporting stock 8400 MT of Feldspar to Taiwan through the defendant's

vessel on 26.10.1995. It has been the contention that the defendant's ship

has failed to act in terms of the fixture note by reason wherefor the plaintiff

has not been able to send the cargo to the purchaser as per the schedule thus

exposing the plaintiff to suffer a loss of 11 lakhs by reason of a deliberate

act of default to ship the cargo on the vessel.

As detailed above the learned single Judge dismissed the suit and

recorded inter alia the following:

"The plaintiff sought for the claim of arrest of the

vessel and for damages. The arrest of the vessel can be

sought for only under the Admiralty Jurisdiction.

Nothing was performed with regard to loading of cargo

in the ship. The plaintiff states that since the contract for

export of goods was dropped, the vessel must be arrested.

Since no shipment of the cargo has taken place, the

Admiralty Jurisdiction of this Court cannot be invoked.

The fixture note Ex.P1 is between the plaintiff and Taiyo

Senpaku Kaisha Ltd. No contract has been entered into

between the plaintiff and the defendant, the owner of the

vessel WON FU. Absolutely there is no disponent to link

the defendant with the alleged contract and that there was

a concluded contract between the plaintiff and the

defendant. In the absence of any specific evidence to

prove that there was a contract between the plaintiff and

the defendant. I am quite unable to accept the case of the

plaintiff. I hold that there is no privity of contract

between the plaintiff and defendant. If at all there was

breach of contract, the plaintiff has to seek their remedy

under the proper forum for breach of contract. Since no

shipment had taken place and as the ship is not involved

for the breach of contract by the disponent owner or any

other party the Admiralty Jurisdiction of this Court

cannot be involved and arrest of vessel cannot be sought

for. The facts and circumstances of the case do not come

under the Admiralty Jurisdiction of this Court. Further,

the suit is also not filed against the proper party. The

name of the owner of this ship is not mentioned in the

short cause title. It is not clear from the plaint as to

against whom the plaintiff sought the relief. The suit has

not been properly framed."

It is this conclusion and the finding of the learned Single Judge stands

accepted by the Division Bench without however much elucidation on the

same and as such we refrain ourselves from recording herein any further

save that the appeal by the plaintiffs stands rejected and the present appeal

before this Court by reason therefor.

Without however going to the issue of privity of contract which has

been one of the basic reasons for the learned single judge to come to the

conclusion, be it noted that the suit has been framed for the arrest of the

vessel MV WON FU in the Admiralty Jurisdiction of the High Court at

Madras. At this juncture however a brief historical perspective of the

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Admiralty Jurisdiction in the country may be adverted. The three erstwhile

Presidency High Courts (in common and popular parlance Chartered High

Courts), namely, Calcutta, Bombay and Madras were having the Letters

Patent for the conferment of the ordinary original civil jurisdiction and by

reason of the provisions contained therein read with the Admiralty Court

Act, 1861 and subsequent enactment of Colonial Courts of Admiralty Act,

1890 and Colonial Courts of Admiralty (India) Act.

The High Courts of these three Presidency towns were conferred with

the same jurisdiction as was vested in the High Court of England and the

High Courts were declared to be otherwise competent to regulate their

procedure and practice as would be deemed necessary corresponding to the

Indian perspective in exercise of the admiralty jurisdiction by way of rules

framed in that regard. There is no manner of doubt that there existed or is

existing any fetter in regard to the exercise of admiralty jurisdiction in so far

as the three High Courts at Calcutta, Bombay and Madras are concerned.

It is in this context observations of this Court in M.V. Elisabeth v.

Harwan Investment and Trading Pvt. Ltd., Goa [AIR 1993 SC 1014] seem

to be of some assistance. This Court in paragraph 26 of the report observed:

"Assuming that the admiralty powers of the High

Courts in India are limited to what had been derived from

the Colonial Courts of Admiralty Act, 1890, that Act,

having equated certain Indian High Courts to the High

Court of England in regard to admiralty jurisdiction, must

be considered to have conferred on the former all such

powers which the latter enjoyed in 1890 and thereafter

during the period preceding the Indian Independence Act,

1947. what the Act of 1890 did was, as stated earlier, not

to incorporate any English statute into Indian law, but to

equate the admiralty jurisdiction of the Indian High

Courts over places, persons, matters and things to that of

the English High Court. As the Admiralty jurisdiction of

the English High Courts expanded with the progress of

legislation and with the repeal of the earlier statues,

including in substance the Admiralty Court Acts of 1840

and 1861, it would have been reasonable and rational to

attribute to the Indian High Courts a corresponding

growth and expansion of admiralty jurisdiction during the

pre-independence era. But a restrictive view was taken

on the question in the decision of the High Courts cited

above."

Turning attention on to the appeal presently before us the cardinal

issue arises for consideration stands out to be the applicability of the concept

of Maritime Lien on the basis of the fixture note as above stated and

alternatively as to whether the fixture note by itself would give rise to a right

in rem thereby enabling the plaintiff to initiate proceedings under Admiralty

Jurisdiction of the High Court at Madras.

Before embarking on to the discussions apropos above, certain

notions as regards the constituents of Maritime Liens ought to be noticed:

the Encyclopedia Britannica has the following to state as regards Maritime

Lien and the same reads as below:

"Maritime liens: although admiralty actions are

frequently brought in personam, against individual or

corporate defendants only, the most distinctive feature of

admiralty practice is the proceeding in rem, against

maritime property, that is, a vessel, a cargo, or "freight",

which in shipping means the compensation to which a

carrier is entitled for the carriage of cargo.

Under American maritime law the ship is

personified to the extent that it may sometimes be held

responsible under no liability. The classic example of

personification is the "compulsory pilotage" case. Some

State statutes impose a penalty on a ship owner whose

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vessel fails to take a pilot when entering or leaving the

waters of the State. Since the pilotage is thus

compulsory, the pilot's negligence is not imputed to the

ship owner. Nevertheless, the vessel itself is charged

with the pilot's fault and is immediately impressed with

an inchoate maritime lien that is enforceable in Court.

Maritime liens can arise not only when the

personified ship is charged with a maritime tort, such as a

negligent collision or time tort, such as a negligent

collision or personal injury, but also for salvage services,

for general average contributions and for breach of

certain maritime contracts."

Incidentally, be it noted that this concept of maritime lien did come

for judicial scrutiny before the Courts often and it is Sir John Jervis who

probably for the first time in The Bold Buccleugh (1851 (7) Moo P.C. 267)

defined the maritime lien as below :

".a maritime lien is well defined .. to mean a claim or

privilege upon a thing to be carried into effect by legal process

. that process to be a proceeding in rem. This claim or

privilege travels with the thing into whosoevers possession it

may come. It is incohate from the moment the claim or

privilege attaches, and, when carried into effect by legal

process by a proceeding in rem, relates back to the period when

it first attached."

While the definition provided by Sir John Jervis, as above, stands

accepted in various other decisions of the English Courts, the definition by

Atkin L.J. in The Tervaete (1922 (P) 259) became subject matter of criticism

by reason of its failure to distinguish a maritime lien and its maritime right

of action in rem. Atkin L.J., however, in The Tervaete defined the maritime

lien as below :

" of the right by legal proceedings in an appropriate form to

have the ship seized by the officers of the Court and made

available by sale if not released on bail."

In M.V. AL Quamar v. Tsavliris Salvage (International) Ltd. & Ors.

(2000 (8) SCC 278: AIR 2000 SC 2826) this Court upon reference to

Elisabeth's case (supra) has the following to state as regards the attributes of

maritime lien. This Court observed in paragraphs 33 to 36 as below:

33. Be it noted that there are two attributes to maritime

lien : (a) a right to a part of the property in the res; and (b)

a privileged claim upon a ship, aircraft or other maritime

property in respect of services rendered to, or injury caused

by that property. Maritime lien thus attaches to the

property in the event the cause of action arises and remains

attached. It is, however, inchoate and very little positive

in value unless it is enforced by an action. It is a right which

springs from general maritime law and is based on the

concept as if the ship itself has caused the harm, loss or

damage to others or to their property and thus must itself

make good that loss. (See in this context 'Maritime Law' by

Christopher Hill, 2nd Edn.)

34. As regards the concept of proceeding in rem and

proceeding in personam, it should be understood as

actions being related to the same subject-matter and are

alternative methods pertaining to the same claim and can

stand side by side.

35. In this context, reference may also be made to the

observations of this Court in M.V. Elisabeth's case, (AIR

1993 SC 1014) (supra), as stated below :-

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"47. Merchant ships of different nationalities

travel from port to port carrying goods or

passengers. They incur liabilities in the course

of their voyage and they subject themselves to

the jurisdiction of foreign States when they enter

the waters of those States. They are liable to be

arrested for the enforcement of maritime claims,

or seized in execution or satisfaction of

judgments in legal actions arising out of

collisions, salvage, loss of life or personal

injury, loss of or damage to goods and the like.

They are liable to be detained or confiscated by

the authorities of foreign States for violating

their customs, regulations, safety measures, rules

of the road, health regulations, and for other

causes. The coastal State may exercise its

criminal jurisdiction on board the vessel for the

purpose of arrest or investigation in connection

with certain serious crimes. In the course of an

international voyage, a vessel thus subjects itself

to the public and private laws of various

countries. A ship travelling from port to port

stays very briefly in any one port. A plaintiff

seeking to enforce his maritime claim against a

foreign ship has no effective remedy once it has

sailed away and if the foreign owner has neither

property nor residence within jurisdiction. 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.

48. 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. In the first two cases the

Court has the discretion to insist upon security

being furnished by the plaintiff to compensate

the defendant in the event of it being found that

the arrest was wrongful and was sought and

obtained maliciously or in bad faith. The

claimant is liable in damages for wrongful

arrest. This practice of insisting upon security

being furnished by the party seeking arrest of the

ship is followed in the United States, Japan and

other countries. The reason for the rule is that a

wrongful arrest can cause irreparable loss and

damages to the shipowner; and he should in that

event be compensated by the arresting party.

(See Arrest of Ships by Hill, Soehring, Hosoi

and Helmer, 1985)".

36. In Halsbury's Laws of England, the nature of

action in rem and the nature of action in personam is

stated to be as below:

310. Nature of actions in rem and actions in

personam. An action in rem is an action

against the ship itself, but the view that if the

owners of the vessel do not enter an appearance

to the suit in order to defend their property no

personal liability can be established against them

has recently been questioned. It has been stated

that, if the defendant enters an appearance, an

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action in rem becomes, or continues also as, an

action in personam; but the Admiralty

jurisdiction of the High Court may now in all

cases be invoked by an action in personam,

although this is subject to certain restrictions in

the case of collision and similar cases, except

where the defendant submits or agrees to submit

to the jurisdiction of the Court.

The foundation of an action in rem is the

lien resulting from the personal liability of the

owner of the res. Thus an action in rem cannot

be brought to recover damages for injury caused

to a ship by the malicious act of the master of

the defendant's ship, or for damage done at a

time when the ship was in the control of third

parties by reason of compulsory requisition. On

the other hand, in several cases, ships allowed

by their owners to be in the possession and

control of charterers have been successfully

proceeded against to enforce liens which arose

whilst the ships were in control of such third

parties.

The defendant in an Admiralty action in

personam is liable, as in other actions in the

High Court, for the full amount of the plaintiff's

proved claim. Equally in an action in rem a

defendant who appears is now liable for the full

amount of the judgment even though it exceeds

the vale of the res or of the bail provided. The

right to recovery of damages may however be

affected by the right of the defendant to the

benefit of statutory provisions relating to

limitation of liability."

In M.V. AL Quamar (supra) this Court spoke of two attributes of

maritime lien as noticed herein before. The International Convention for

Unification of Certain Rules relating to Maritime Liens and Mortgages at

Brussels in 1967 defined the maritime lien to be as below :

a. 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;

b. port, canal and other waterways and pilotage dues;

c. claims against the owner 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;

d. claims against the owner based on tort and not capable of being

based on contract, in respect of loss of or damage to property

occurring, whether on land or on water in direct connection

with the operation of the vessel;

e. claims for salvage, wreck removal and contribution in general

average.

Incidentally, the Admiralty Court Act, 1861, read with the

International Convention for Unification of Certain Rules relating to

Maritime Liens and Mortgages, Brussels, 1926 read with Brussels Arrest (Of

Seagoing Ships) Convention 1952 and Brussels Maritime Liens Convention

1967 clearly indicate that a claim arising out of an agreement relating to the

use and/or hire of the ship although a maritime claim would not be liable to

be classified as maritime lien. (See in this context Thomas on Maritime

Liens).

Mr. Sampath, learned Senior Advocate with all the emphasis in his

command contended that the breach of the agreement in the facts of the

matter under consideration cannot but be ascribed to be a maritime lien,

whereas Mr. Sundaram, learned Senior Advocate appearing for the

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respondents rather strongly refuted the same and contended that even

assuming that there was in fact an agreement in existence between the

respondent and the disponent owner, question of there being a maritime lien

by reason of the breach of such an agreement does not and cannot arise

We have in this judgment herein before dealt with the attributes of

maritime lien. But simply stated maritime lien can be said to exist or

restricted to in the event of (a) damage done by a ship; (b) salvage; (c)

seamen's and master's wages; (d) master's disbursement; and (e) bottomry;

and in the event a maritime lien exists in the aforesaid five circumstances, a

right in rem is said to exist. Otherwise, a right in personam exists for any

claim that may arise out of a contract.

Mr. Sampath did place very strong reliance on to the fixture note and

contended that the document itself cannot but be termed to be a concluded

contract relying upon the maritime lien. Upon reliance thereon, Mr.

Sampath contended that the fixture note contains all the particulars and has

been issued after the completion of negotiations and upon acceptance of the

terms and conditions, by reason whereof the fixture note is final and the

same binds not only the parties to the agreement but also the vessel.

Incidentally, the fixture note stands issued by the Japanese Company (Taiyo

Senpaku Kaisha Ltd.) through its agent in Malaysia, M/s Oriental Shipping

Corporation.

Further on the issue, we find Thomas on Maritime Liens stated it to

represent a small cluster of claims which arise either out of services rendered

to a maritime res or from damage done to a res and listed five several heads

of maritime liens as under :

(a) Damage done by a ship

(b) Salvage

(c) Seamen's wages

(d) Master's wages and disbursements

(e) Bottomry and Respondentia

The limited applicability of such a lien thus well illustrates that not

every kind of service or every kind of damage which arises in connection

with a ship gives rise to a maritime lien. We, however, hasten to add that

this is apart from the statutory enactments which may further list out various

other forms of maritime liens. In the Ripon City [(1897) P. 226, 246],

Gorrel Barnes, J. upon appreciation of this facet of a maritime lien and also,

in part, to the surrounding policy considerations observed :

". A maritime lien travels with the vessel into

whosoever possession it comes, so that an innocent purchaser

of a ship may find his property subject to claims which exist

prior to the date of his purchase, unless the lien is lost by laches

or the claim is one which is barred by the Statutes of

Limitation. This rule is stated in The Bold Buccleugh to be

deduced from the civil law, and, although it may be hard on an

innocent purchaser, if it did not exist a person who was owner

at the time a lien attached could defeat the lien by transfer if he

pleased."

As regards the issue of relationship between a maritime lien and

personal liability of a res owner, Thomas has the following further to state :

"The issue as to the relationship between a maritime lien

and the personal liability of a res owner is therefore one which

may fall to be answered differently as between individuals

maritime liens. It is clear that the various maritime liens do

not, in this regard, display common characteristics. The fact

that there exists this disparity may in turn be a symptom of the

absence of any clearly defined theoretical framework in the

development of the law relating to maritime liens. It is also

note-worthy that the emphasis on personal liability is most

clearly established in relation to the damage and disbursement

maritime liens which were the last in point of time to be

established."

As regards the merits of the matter presently, Mr. A.T.M. Sampath,

commented that the factum of contract between the parties was clearly

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admitted by the agent of the respondent vessel in its counter dated 24.6.1996

in Application No. 1147 of 1996. The admission of the Vessel is as

follows:-

"As per the contract between the plaintiff and the

respondent dated 20.10.95 there is absolutely no provision for

payment of 24% interest in the case of any delayed shipment".

It is in this context it has been contended that the respondent vessel

never disclosed the owner of the vessel in the written statement and reply

statement and as a matter of fact till date the respondent vessel did not

disclose who is actually contesting the case. For the first time in the cross

examination they marked the "Lloyd's Maritime Directory" of the year 1998

and in which the owner of the vessel has been shown as one Pambridge

Maritime Inc., Panama City. Only in the Additional Written Statement for

the first time it has been stated that the owner is in Hongkong, but even the

name of the owner was not disclosed. The records depict that the respondent

vessel filed a power of attorney before the trial court. In which Skarrup

Management of Hongkong gave power of attorney in favour of one PC

Thilak and Venkatachalam. The above said Venkatachalam filed the counter

in O.A. No. 1147 of 1996. But P.C. Thilak the other power of attorney

subsequently filed a reply statement, in which he has stated that the

admission made by the other power agent is without getting the instruction

from the owner and without knowing the fact that they are not the parties to

the document but yet the respondent vessel did not disclose as to the owner

of the vessel.

Further reliance was placed on the decision of this Court in Nagindas

Ramdas v. Dalpatram Ichharam alias Brijram & Ors. (1974 (1) SCC 242),

wherein this Court in paragraph 27 stated as regards the admissions of

pleading the following :

"..Admissions in pleadings or judicial admissions,

admissible under Section 58 of the Evidence Act, made by the

parties or their agents at or before the hearing of the case, stand

on a higher footing than evidentiary admissions. The former

class of admissions are fully binding on the party that makes

them and constitute a waiver of proof. They by themselves can

be made the foundation of the rights of the parties. On the

other hand, evidentiary admissions which are receivable at the

trial as evidence, are by themselves, not conclusive. They can

be shown to be wrong."

In continuation of his submission as regards the fixture note it has

been the definite submission of Mr. Sampath that the Japanese Company

cannot but be said to be the disponent owner of the vessel M.V. WON FU

and, however, thus leads us to the next issue as regards the maintainability of

the suit upon an assumption that the latter has been the disponent owner.

Black's Law Dictionary (7th Edition) illustrates the meaning of 'dispone'

being available in Scot's Law and means to grant or to convey. It is on this

score, Order XLII Rule 2 of the Original Side Rules of the Madras High

Court has been referred to, which reads as below :

"A suit shall be instituted by a plaint drawn up,

subscribed and verified according to the provisions of the code,

save that if the suit is in rem, the defendants may, subject to

such variations as the circumstances may require, be described

as "the owners and parties interested in the vessel" or other

property proceeded against instead of by name."

Mr. Sampath contended that the suit is filed under the admiralty

jurisdiction in rem in the Original Side of the High Court of Judicature at

Madras and not in personam since the respondent vessel as per the fixture

note was bound to make itself available in Tuticorin Port and the laycan time

was fixed as 25th October-5th November to load 8,000 MTs and the

destination was Taiwan. The buyer of the cargo is San-I-Mining, Taiwan.

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The appellant informed the same to his buyer immediately after entering of

the agreement with Taiyo in Ex.P.2 dated 26.10.1995. Further it has been

stated that in order to avoid demurrage, the cargo was transported from the

appellant's stockyard to the local clearing and forwarding agent M/s Lotus

Marine Shipping Clearing and Forwarding Agent's stockyard near the Port

and thus it is a duty incumbent of the Charterer to be ready with the cargo

near the stockyard for immediate shipment. It has been contended that once

the contract was entered between the parties and the ship is available for

shipment of the cargo, it is the bounden duty and obligation under the

contract for the owners and master of the vessel to make available of the

ship as agreed in the contract and any breach, if occasioned, would entitle

the Charterer to claim damages for the loss. In the present case the ship is

within the territorial water of India. The ship is unloading iron cargo at

Madras Port as per appellant's agent's information to the appellant. The

appellant informed the same to his buyer in Taiwan in Ex.P2 on 26.10.1995.

The appellant when waited for the ship to reach the Tuticorin Port to load his

cargo, he received the message, the copy of fax message sent to the

disponent owner from his agent in Malaysia in Ex.P.3 dated 27.10.1995

stating that the respondent vessel is dropping the business and it contains

further information that if the vessel did not perform this contract it would

result in serious consequences.

Mr. Sampath contended that the appellant immediately filed the suit

on 30.10.95 under the admiralty jurisdiction in rem and the order of arrest

was passed on 1.11.1995 and the ship was arrested on 2.11.1995. One

Skarupp Management, Hongkong entered appearance through its counsel

M/s King & Patridge. (But no affidavit of interest was filed as enumerated

in the Original Side Rules and this came to the knowledge of the appellant

only when the appellant filed a petition to peruse the records at the time of

trial.) To release the vessel, a bank guarantee was given and the ship left

the jurisdiction of India upon furnishing security for the release.

It is on this score very strong emphasis has been laid on the decision

of this Court in M.V. Elisabeth (supra). Special attention has been drawn

to paragraph 44 of the Report in M.V. Elisabeth which reads as below :

"The vital significance and distinguishing feature of an

admiralty action in rem is that this jurisdiction can be assumed

by the coastal authorities in respect of any maritime claim by

arrest of the ship, irrespective of the nationality of the ship or

that of its owners, or the place of business or domicile or

residence of its owners or the place where the cause of action

arose wholly or in part."

In para 44 of M.V. Elisabeth (supra) it has been further observed as

follows :

".. In admiralty the vessel has a juridical personality,

an almost corporate capacity, having not only rights but

liabilities (sometimes distinct from those of the owner) which

may be enforced by process and decree against the vessel,

binding upon the world, for admiralty in appropriate cases

administers remedies in rem, i.e. against the party

personally."

It is submitted that in the present case the respondent vessel entered

appearance through its counsel but the affidavit of interest by the owner of

the vessel was not filed and the respondent vessel without disclosing its

owner contested the case. Again emphasis should be made to the fact that

Skarrup Management of Hongkong filed a power of attorney in favour of

two persons jointly and severally. In the course of the cross-examination of

the PW.1 for the first time the respondent vessel produced Lloyd's Maritime

Directory Ex.D1 and claimed that one Pambridge Maritime Inc., of Panama

City was the owner in the year 1998. But in the additional written

statement filed by the respondent vessel on 30.7.1998 in para 2 it has been

stated as follows :

"It is submitted that the aforementioned counter affidavit

was filed in reply to the plaintiff's applications for amendment

when the Defendant's agents in Chennai did not have complete

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instructions from the defendant who is at Hongkong."

The additional written statement and the Lloyd"s Maritime Directory

are of the same year 1998. But in the additional written statement there is

no mentioning that the respondent is at Panama City. The Lloyd's Maritime

Directory of the year 2000 did not contain the name of M.V. Won Fu. The

book is published every year. Even the author of the book did not guarantee

its authenticity.

The power of attorney of Skarupp Management after the disposal of

the O.S.A. filed a petition seeking the permission of the High Court

permitting the respondent's counsel to withdraw the amount, for the sole

reason that the order of the High Court in C.S. No.1693 of 1995 is that the

money, which is lying in the fixed deposit in the credit of the suit, should be

refunded to the respondent vessel. As per the order of the High Court the

money can be paid only in favour of Pambridge Maritime Inc. In the

application seeking the permission of the Court to permit the respondent's

counsel to withdraw the amount once again it has been stated that the owner

is in Hongkong. Thus, the suit is contested without disclosing the ownership

of the respondent vessel before the Lower Court as well as before this Court.

Thus the suit is stated to be contested in rem and not in personam.

Mr. C.A. Sundaram, Senior Advocate, appearing for the respondent,

on the other hand very strongly contended that even assuming that an

agreement had come into effect between the owner and the disponent owner,

but unless the charter was by demise, whereby the possession and control of

the vessel has to be given to the disponent owner, question of enforcing the

same in an action in rem and against the res would be rather futile.

Incidentally, this aspect of the matter, namely, the action in personam and

the action in rem has been rather elaborately dealt with in M.V. Elisabeth

(supra) as also in M.V. AL Quamar (supra).

Even, however, assuming the agreement has in fact been entered into

by the disponent owner, unless sufficient evidence is laid that the charter

was by demise, whereby the possession and control of the vessel was given

to the disponent owner, question of pursuing the cause of action against the

vessel would not arise. Needless to add that charter parties are of three

kinds; (a) Demise Charter; (b) Voyage Charter; and (c) Time Charter.

Whereas in demise charter, the vessel is given to the charterer who thereafter

takes complete control of the vessel including manning the same, in both

voyage charter and time charter, master and crew are engaged by the owner

who act under owner's instructions but under the charterer's directions.

Simply put, voyage charter is making available the vessel for use of carriage

for a particular voyage and the time charter correspondingly is where the

vessel is made available for carriage of cargo for a fixed period of time. In

the contextual facts, apart from the fixture note, no other documentary

support is available as to whether ownership arose through a charter by

demise and possession and control of the vessel has already been given to

the disponent owner. The facts disclose that the disponent was an intending

charterer of the vessel from the owner and it is on expectancy of such a

contract, the fixture note was issued. There was as a matter of fact no

charter party or agreement with the charterer and some eventuality in future

is stated to be the basis of the cause of action. It is on this score we think it

expedient to record that even upon assumption of the appellant's case at its

highest, no credence can be attached thereto. The disponent owner was not a

demise charterer but it is on the happening of such an event in futuro that

such a fixture note has been issued. In our view there is no sufficient

evidence available as regards the action in rem making the vessel liable in

the contract said to have been entered into, as recorded in the fixture note.

It is in the nature of a breach of contract and liability of the vessel would not

arise, though however, we are not expressing any opinion as regards the

maintainability of an action in personam or its eventual success.

Inasmuch as the claim in the present case arises out of contract de

hors a maritime lien, no action in rem is permissible, neither a suit in the

original jurisdiction of the Madras High Court can be maintained against the

vessel.

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On the wake of the aforesaid, this appeal fails and is dismissed,

without, however, any prejudice to initiate further action in personam. No

costs.