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Calcutta High Court: Admiralty Jurisdiction Applies to Every Vessel but Does Not Apply to an Inland Vessel Exclusively Meant for Plying Inland.

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Case: Jindal ITF Limited and Anr. v. I-Marine Infratech (India) Pvt. Ltd. [APO 160 of 2020; GA 01 of 2020; AS 05 of 2020]

The Calcutta High Court on 29th January 2021, rejected the appeal filed by the appellant by affirming the earlier interim order of the division bench made on 23rd December 2020, confirming that the respondent plaintiff has a maritime claim.

Facts of the case:

The cargo barge vessel M.V. MAHESHWARI was built at Old Goa by Dempo Shipbuilding & Engineering Pvt. Ltd., Old Goa, on 27th May 2013. It was registered under Section 19F of the Inland Vessels Act, 1917, and also under the Merchant Shipping Act, 1958. 

The respondent plaintiff who was the owner of the TUG Ferrari, under a Charter Party agreement, chartered it for hire to the appellant for transportation of men and materials on 24th November 2014, and the said agreement was extended till 4th May 2018. 

The appellant alleged the agreement was terminated prematurely and on or about 9th September 2017 redelivered the tug to the respondent plaintiff. The respondent plaintiff’s claim for Rs.2,13,41,345/- substantially arises out of an alleged loss of earnings in vessel hire for premature termination of this agreement.

The appellant filed the appeal against the order dated 21st December 2020 passed by the court to withdraw the security from the Registrar and continue to ply the vessel without any security whereas the respondent plaintiff insists that the security should be maintained till the suit’s disposal.

Appellant’s arguments:

The learned counsel for the appellant pleaded that the suit was not maintainable at all in the admiralty jurisdiction of this court as the vessel in question was an inland plying vessel. Although it is also registered under the Merchant Shipping Act, 1958, on 1st August 2019 the appellant surrendered the vessel’s river-sea certificate to the government and retained its registration under the Inland Vessels Act, 1917 and hence, it became an inland vessel. 

Thus, it was contended that the admiralty jurisdiction is not attracted and hence, no order of arrest of the vessel could have been made, and therefore, no question of furnishing any security by the appellant owner could arise.

Respondent’s arguments:

The learned counsel for the respondent plaintiff contended that since the vessel in question was registered under the Merchant Shipping Act, 1958, thus section 2(1)(a) of the Inland Vessels Act, 1917 did not apply to it. 

Therefore, the vessel ‘M.V. MAHESHWARI’ cannot be excluded from the operation of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 as provided in the proviso to sub-section 2 of Section 1 read with Section 2(1)(l) thereof.

Court’s observations:

The bench of Hon’ble Justice I. P. Mukerji and Justice Md. Nizamuddin observed that through the interpretation of the law, the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 applies to every vessel but does not apply to an inland vessel defined in Clause (a) of sub-section 1 of Section 2 of the Inland Vessels Act, 1917 if that vessel is exclusively meant for plying inland. 

The vessel in question is registered under the said Act of 1917 as also under the Merchant Shipping Act, 1958, so, the 2017 Act applies to it. The owners surrendered their certificate of River Sea Safety to the authority but retained its registration under the Merchant Shipping Act, 1958 and thus, the respondent plaintiff had the right to invoke the admiralty jurisdiction of this court, irrespective of the fact whether it had the certificate to ply in the sea. 

Further, since the plaintiff has a maritime claim, it is entitled to arrest a vessel from which the claim arose or any other vessel of the owner in a proceeding in rem provided the vessel is under the admiralty jurisdiction of the court. Furthermore, it was held that this is a very valuable right for the plaintiff because the owner can only obtain a release of the vessel upon furnishing adequate security to the satisfaction of the court while in an ordinary suit, the ordinary plaintiff has to wait till he obtains the decree to execute it against any property of the judgment debtor by attachment and sale of his property. Also, the learned single judge has rightly not vacated the order of arrest and directed the appellant owner to furnish security which they have duly done and obtained a release of the vessel.

Judgment:

The Hon’ble court ruled that only if the cancellation or suspension of the registration of the vessel under the Merchant Shipping Act, 1958 has been obtained, it would make a person entitled to apply for a vacation of the order of arrest, return of the security, and for the conversion of the suit into an ordinary suit. Therefore, the appeal is disposed of accordingly, confirming the earlier interim order of the division bench made on 23rd December 2020.

Click here to view the judgment.


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