JUDGMENT
D.Y. Chandrachud, J.
1. The plaintiff sues for the recovery of an amount of US$ 45,229/-, on a claim for the supply of necessaries to the Defendant Vessel, M.V. Sagar Shakti previously known as Al-Karim. The claim in the suit comprises of a principal sum of US$ 40,426.30 and interest of $ 4802.72. The supplies are alleged to have been effected on 2nd March 1997. The erstwhile owner of the vessel was a company known by the name of Al-Karim Shipping Company Ltd. On 9th April 1997, the ownership of the vessel was stated to be transferred to the present owners, Rank Resources Ltd.
2. The vessel was arrested by an order dated 30th September 1997 passed by this Court. On 3rd October 1997, an order for the release of the vessel was passed subject to the condition that a Bank Guarantee be furnished in the amount of US$ 45,229.02 and to cover, in addition, the claim for interest at the rate of 18% p.a. from the date of the institution of the suit, the Sheriff’s poundage and an amount of Rs. 25,000/- towards costs. The ship has since been released from arrest upon the Bank Guarantee being furnished.
3. From the averments in the plaint, the case of the Plaintiff is that a supply of bunkers to the vessel took place in pursuance of a communication received from one “Delta International Shipping”. In paragraph 2 of the Plaint, the Plaintiff avers that in pursuance of a communication received from Delta International Shipping, the Plaintiff confirmed by its telex dated 25th February 1997 that it would be making supplies. According to the Plaintiff, its telex provided the Master of the vessel with instructions regarding prior notice to the Plaintiff so that it could organise the supply of bunkers. In paragraph 3, it has been averred that the Master confirmed the estimated time of arrival of the vessel at the nominated site so that the supply of bunkers could be facilitated and the Chief Engineer of the Vessel acknowledged the receipt of bunkers without any qualification. The Plaintiff avers in paragraph 4 that it drew an invoice dated 2nd March 1997. According to the Plaintiff, on 21st April 1997, it called upon the Defendant through its representative, Mr. M. Fouad and followed this up by facimile communications dated 23rd April 1997 and 15th May 1997. To this, there was a reply dated 19th May 1997 in which it was stated that the order for the supply of bunkers had been placed by Delta International Shipping and it is to them that the Plaintiff should look for the receipt of payment. The case of the Plaintiff is that the supply of bunkers is in the nature of necessaries without which the vessel would not be in a position to sail and that this constitutes a maritime claim entitling the Plaintiff to proceed against the Defendant vessel in rem in order to secure the claim by the arrest, sequestration, condemnation and sale of the vessel. According to the Plaintiff, the vessel was named m.v. AL KARIM at the time when supplies were effected and that subsequently, the name has been changed to m.v. SAGAR SHAKTI. The Plaintiff avers that though this change is reflected in Lloyds Shipping Index, the registry of the vessel has remained unchanged. The Plaintiff has averred that it verily believes that the alleged sale is only a device or strategem on the part of the owners/managers/beneficial interests concerned in the vessel with the intent of defrauding her creditors. The Plaintiff has further averred that in any event, the supply of necessaries “constitutes a maritime lien which lien travels with the res and survives change in ownership.” The jurisdiction of the Court is invoked in paragraph 11 of the Plaint on the basis that the vessel “is presently in port and harbour Mumbai and within the jurisdiction of this Court.”
4. The Written Statement on behalf of the Defendant has been filed by Rank Resources Limited, a company which claims to have purchased the vessel on 9th April 1997. The defendant contends that this Court has no jurisdiction to entertain or try the suit. Moreover, according to the Defendant, the supplies, if any, were made to the vessel Al Karim and the Defendant vessel was not liable in respect of the alleged supplies. The Defendant also avers that the Plaintiff is not entitled to claim a maritime lien either under the laws of U.A.E. or of India in view of the change of ownership of the vessel. In paragraph 3 of the Written Statement, the defence is that the alleged supply, if any, had been made at the request of Delta International Shipping and not at the request of the owners of the vessel. The Defendant claims to have made payment in respect of the bunkers on board to the previous owners of the vessel. There is a denial by the Defendant that the Plaintiff supplied bunkers to the vessel m.v. Al Karim as alleged or at all. The contents of paragraphs 2, 3, 4, 5 and 5 of the Plaint are not admitted in the Written Statement. The Defendant has denied that the alleged supplies of necessaries constitutes a maritime claim and that the Plaintiffs are entitled to proceed against the Defendant-vessel in rem and/or to arrest and/or to sell as alleged or at all. According to the Defendant, it purchased the vessel m.v. Sagar Shakti for valuable consideration from the previous owner and it has denied the allegation that this was merely a device for the purpose of defrauding its creditors. The defence is that the Plaintiff is not entitled to a maritime lien and that in any event, the same does not survive a change of ownership.
5. By an order of 9th March 2001, the following issues were framed in the suit:
1) Whether this Court has jurisdiction to entertain and try the suit?
2) Whether the defendants prove that Rank Resources Ltd. have become owners of the vessel m.v. Sagar Shakti?
3) Whether the plaintiffs prove that they have supplied Bunkers to the vessel Al Karim at the request of Delta International Shipping and/or that they are entitled to sum of US $ 40,426.30?
4) Whether the defendants prove that under the laws of UAE a claim in the nature of necessaries does not have the maritime lien?
5) Whether the Plaintiffs prove that the supplies if any made are in the nature of necessaries?
6) Whether the claim for necessaries constitutes maritime lien?
7) Whether the Plaintiffs prove that they are entitled to interest and if so at what rate?
8) What orders and what reliefs?
6. During the course of the hearing, Counsel appearing on behalf of the Defendant has not pressed his objection in respect of the jurisdiction of this Court and correctly so since the invocation and assumption of jurisdiction was based on the presence of the vessel within jurisdiction. The vessel, as already noted earlier, came to be arrested on 30th September 1997. Counsel appearing for the Defendant has not pressed the defence that under the laws of UAE a claim in the nature of necessaries does not constitute a maritime line. Issue No. 1 is, therefore, answered in the affirmative. Issue No. 4 is not pressed.
7. ISSUE NO. 2: Whether the defendants prove that Rank Resources Ltd. have become owners of the vessel m.v. Sagar Shakti?
On this issue, the evidence of Vinod Kumar Dang, Chairman of Rank Resources Limited will primarily have to be considered. The evidence of this witness is that on 2nd April 1997, Rank Resources Ltd. in a Board meeting authorised any one of its Directors to enter into contracts and agreements and to sign and execute documents on behalf of the company. Rank Resources Ltd., Rank Maritime Limited are stated to be group companies. According to the witness, the group had decided to purchase three vessels namely, m.v. Al Karim, m.v. Al Mutawakil and m.v. Rita. For the said purpose and in order to comply with legal formalities, Messrs. Clifford Chance came to be engaged as Solicitors in London. On 3rd April 1997, Rank Enterprises Ltd. instructed Standard Chartered Bank, Dubai to transfer a sum of US $4.3 million to Standard Chartered Bank, London with instructions to hold the said amount at the disposal of the Company’s Director. Bank Resources Ltd. obtained a certificate of ownership and non-encumbrance on 9th April 1997 from the Commissioner for Maritime Affairs, St. Vincent and the Grenadines in respect of m.v. Al Karim. The certificate has been marked in evidence as Exh. 3. On 9th April 1997, a Memorandum of Agreement was executed between Rank Resources Ltd. and Al Karim Shipping Co. Ltd. The agreement which has been duly proved and marked as Exh. 4 stipulated that the price of the vessel in the sum of U.S. $ one million would have to be paid over to Banque de Luxembourg A/c. “Moncherand 51397”. On 3rd April 1997, Standard Chartered Bank, Dubai had confirmed having credited a sum of U.S. $ 4.3 million to the account of Dr. M.J. Dang. The sellers, Al Karim Shipping Co. Ltd. executed a Protocol of Delivery and Acceptance dated 9th April 1997 (Exh. 6). A Bill of Sale was signed and delivered by Al Karim Shipping Co. ltd. A notarized copy of the Bill of Sale has been produced and marked as Exh. 7. The witness for the Defendant has also produced a certificate dated 10th April 1997 of the Commissioner for Maritime Affairs, Vincent and the Grenadines recognising Rank Resources Ltd. as new owners of the vessel (Exh. 8). By its communication of 2nd July 2001, Standard Chartered Bank, London confirmed that on 9th April, 1997 a sum of US $ 2.8 million was remitted to the Bank Moncherand 51397 and a sum of US $ 1.5 million was remitted to Bankers Trust Company, New York in respect of three vessels, including m.v. Al Karim. The Defendant’s witness has also produced on record a letter (Exh. 10) dated 3rd July 2001 of M/s. Clifford Chance, London confirming that they had acted as the English lawyers in connection with the purchase of the three vessels including m.v. Al Karim.
8. The defendant’s witness has denied the suggestion that the sale was not bona fide. In the course of cross examination, the witness has deposed to the fact that he is one of the two shareholders of the three companies which had purchased three vessels, including m.v. Al Karim. The witness deposed that the purchase price is normally paid by the purchaser’s bank to the seller’s nominated bank account, and that the money had gone from his bank. The witness denied the suggestion that the money had gone from his bank to a bank account nominated by a company in which he and his wife had an interest.
9. In the course of his cross examination, the witness for the Plaintiff has deposed that his allegation in the plaint that the alleged sale is ‘merely cosmetic’ is because of the fact that one Vinod Dang who claimed to be the purchaser of the vessel had called him and tried to negotiate the amount outstanding against the vessel which the witness refused to do. Similarly, the witness admitted that he had no document to prove the statement in the plaint that though the vessel was sold and her name changed, her registry remained the same.
10. Sufficient evidence has, therefore, been lead on behalf of the Defendant to establish and prove that Rank Resources Ltd. have become the owners of the vessel now known as m.v. Sagar Shakti. The documentary and oral evidence in regard to the purchase of the vessel and the transfer of ownership is sufficient to answer the aforesaid issue in the affirmative. This aspect of the evidence of the witness of the Defendant has not been shaken in the cross-examination. No part of the evidence adduced by the witness for the Plaintiff would cast doubt on the evidence led on behalf of the Defendant in regard to the acquisition of the vessel.
11. ISSUE NO. 3: Whether the Plaintiffs prove that they have supplied Bunkers to the vessel Al Karim at the request of Delta International Shipping and/or that they are entitled to sum of US $ 40,426.30?
ISSUE NO. 5: Whether the Plaintiffs prove that the Supplies, if any, made are in the nature of necessaries?
Both these issues can conveniently be taken up together.
12. In so far as the third issue is concerned, the pleading set up on behalf of the Plaintiff is that in pursuance of a communication received from Delta International Shipping, the Plaintiff confirmed by a telex dated 25th February 1997 its willingness and ability to supply 300 M.T. C.S.T. 180 and 50 M.T. M.G.O. at US $ 101 and US $ 210 per M.T. respectively. Besides setting out of the terms of payment, the telex provided the Master of the vessel with instructions regarding the prior notice that was required to be given to the Plaintiff so as to organise the supply of bunkers. Then in paragraph 3 of the Plaint, it has been averred that the Master of the vessel confirmed the estimated time of arrival at the nominated site so that the supply of bunkers could be facilitated; the vessel arrived at the outer roads off Fujairah and bunkers were supplied on 2nd March 1997. According to the Plaintiff, the Chief Engineer of the vessel acknowledged receipt of the bunkers without any qualification. In paragraph 4 of the Plaint, there is an averment with regard to the invoice dated 2nd March 1997 drawn by the Plaintiff and in Paragraph 5 to the communications addressed by the Plaintiff on 21st April 1997, 23rd April 1997 and 15th May 1997 seeking payment of the outstandings. The communications were addressed to Mr. M. Fouad. In reply, M. Fouad stated on 19th May 1997 that the Plaintiff should look for payment to Delta International which had placed the order for supplies of bunkers.
13. In support of the case, the Plaintiff has adduced the evidence of Capt. Sushil Kumar Bhasin. In the course of his deposition, Capt. Bhasin stated that by a fax followed by a telex dated 25th February 1997, he has recorded the placement of the order for supply and the instructions which were required to be given to the Master of the vessel regarding pre-arrival notices. Capt. Bhasin has deposed that on 27th February 1997, the Master of the vessel reported the position of the vessel for the purposes of supplies and that by a further telex dated 1st March 1997, the Master once again intimated her position. According to the witness, the Plaintiff thereupon contacted the intermediary, M/s. Fairdeal, who supplied the bunkers to the vessel and obtained an endorsement from the Chief Engineer. A bunker report was accordingly prepared. The Bunker Report at Exh.P-5 provided the relevant details of the delivery of bunkers on 2nd March, 1997, to the vessel m.v. Al Karim. Based thereupon, by a telex dated 2nd March 1997, Delta International Shipping was informed that supplies as ordered were made. The documents which have been proved on behalf of the Plaintiff include inter alia, a telex dated 27th February 1997 of the Master of the vessel communicating the estimated time of arrival of the vessel at Fujairah on 1st March 1997 “for bunker as per owners nomination”. (Exh.P-7). There is a further telex of 1st March 1997 of the Master of the vessel communicating the position of the vessel (Exh.P-6). At Exh. P-8 is a telex dated 2nd March 1997 intimating Delta International that supplies as ordered were made to the vessel. An invoice dated 2nd March 1997 in the total amount of US $ 40,426.30 was accordingly drawn. The evidence which has been produced on behalf of the Plaintiff is sufficient to establish that supplies of bunkers were in fact, effected to the vessel at the nomination of the owners of the vessel. Of particular importance is the Bunker Report at Exh. P-5 coupled with the two telexes respectively dated 27th February 1997 and 1st March 1997 issued by the Master of the vessel. In his telex dated 27th February, 1997, the Master had clearly specified the estimated time or arrival of the vessel in Fujairah “for bunker as per owners nomination”. In view of the telex communications of the Master, it would not be open to the Defendant to now contend that the supplies had been effected not to at the request of the erstwhile owners, but at the request of Delta Shipping which would not constitute a request made by the owner or an agent acting on behalf of the owner. The statement made by the Master of the vessel that the vessel was arriving at Fujairah upon the nomination of the owners for the receipt of bunkers is unequivocal.
14. As regard the fifth issue, in para 7 of the Plaint, it has been pleaded thus:
“7. The supply of bunkers that has been made by the Plaintiffs to these Defendants is in the nature of necessaries, without which the Defendant vessel would not be in a position to sail. The said supply of necessaries constitutes into a maritime claim and entitles the Plaintiffs to proceed against the defendant vessel in rem in order to secure their claim by her arrest, sequestration, condemnation and sale.”
The reply, in paragraph 12 of the Written Statement is as follows:
“12. With reference to para 7 these defendants deny that the alleged supply of necessaries constitute a maritime claim and/or that plaintiffs are entitled to proceed against the defendant vessel in rem and/or to arrest and/or to sell as alleged or at all.”
The averment in the first sentence of paragraph 7 of the plaint is thus not specifically traversed. Whether a maritime lien can in law be said to exist will be considered separately while dealing with Issue No. 6. In order to enable the Plaintiff to succeed in proving that what was supplied was necessaries, it is necessary to aver that the supply of necessaries was effected at the request of the owners, or, that in the alternative, the supply was effected for and at the behest of the agent of the owners who was duly authorised to place an order for the supply of necessaries. This position in law has been elucidated in a judgment of a Learned Single Judge of this Court, Mr. Justice D.K. Deshmukh, in Raj Shipping Agencies v. m.v. Bunga Mas Tiga 2002(1) ALL M.R. 145. The Learned Single Judge, after referring to the judgment of the Supreme Court in m.v. Elisabeth v. Harwan Investment & Trading Pvt. Ltd. held thus:
“It is thus clear that even for maritime lien there has to be an enforceable right in the plaintiff against the owner of the vessel. That right is enforceable against the vessel. But existence of a right in the Plaintiffs against the owner of the vessel, is a must. In so far as the present case is concerned, averments in the plaint do not disclose any existing right in the Plaintiffs against the owner of the vessel.”
In the case which came up for consideration before the Learned Single Judge, there were two contracts which were entered into, the first between the owner of the vessel and North End Oil Pvt. Ltd. under which the owner had agreed to purchase oil at a stated price from the latter. The second contract was between North End Oil Pvt. Ltd. and the Plaintiff. The Learned Single Judge held that the supply of necessaries would not make the owner of the vessel liable to pay the price of the supplies unless the Plaintiff proved that the supplies were made at the instance of either the owner of the vessel or at the instance of persons authorised by the owner of the vessel.
15. The judgment of the Leaned Single Judge in the aforesaid case as has been followed in a subsequent judgment dated 11th July 2002 of another Learned Single Judge, Mr. Justice S.A. Bobde, in S. Scandinavian Bungering AS v. m.v. CHOPOL-2 (Notice of Motion No. 69 of 2002 in Admiralty Suit No. 26 of 2001). In that case, the plaint was rejected under the provisions of Order 7 Rule 11 of the Code of Civil Procedure, 1908 on the ground that there was a failure to aver and plead that the supply of necessaries had been effected at the request of the owner or of an agent duly authorised by the owner to place an order for supply. In the aforesaid case, the vessel in question was m.v. Chopol-2. The owner of the vessel was the Second Defendant, M/s. Korean Polish Shipping Co. Ltd. The order for the supply of bunkers was placed by M/s. Anderson Hughes & Co. Ltd. Bunkers were supplied on the basis of the said order after the plaintiff issued a bunker confirmation on 15th February, 2000. The Learned Single Judge dealing with the facts of the case, recorded in paragraph 6 of the judgment that “according to the Plaintiff, the bunkers were supplied to the vessel in accordance with the bunker confirmation, the Plaintiff’s own document, and the Chief Engineer accepted the bunkers for and on behalf of the Defendant-vessel”. Having recorded this, the Learned Single Judge made the following observation which to my mind is extremely significant: “It is noteworthy that the acceptance is not attributed to the Master. The Learned Single Judge noted that in paragraph 4 of the Plaint, it was in fact, the averment of the Plaintiff that irrespective as to who has placed the order for supply of bunkers, the receipt of the bunkers by the vessel creates a contract between the Plaintiff and the vessel and those concerned with her ownership, operations and maintenance. Thereafter, in paragraph 5, there was an averment that M/s. Anderson Hughes & Co. Ltd. had acted in the capacity of agents for and on behalf of the defendant vessel and those concerned with her operation and maintenance. The Learned Single Judge noted that the words “those concerned with her ownership” were missing in para 5. In this context, the Learned Single Judge concluded thus in paragraph 14:
“14. In short, the plaintiff’s case is that the act of accepting bunkers which was done on behalf of the vessel by the Chief Engineer results in a contract between the owners and the plaintiff. In the Bunga Mas Tiga case, supra, the learned single Judge has held that supply of necessaries does not make the owner of the vessel liable to pay the price of the supply unless the plaintiff shows that the supplies were made at the instance of either the owner of the vessel or at the instance of the person authorised by the owner of the vessel. There must, therefore, be clear averments that supplies were made at the instance of the owner of the vessel.”
16. In the present case, the Plaintiff had expressly averred in paragraph 2 that the telex dated 25th February 1997 of the Plaintiff communicating its offer clearly provided the Master of the vessel with instructions regarding prior notice which was required to be given to the Plaintiff so that the supply of the bunkers could be organised. In paragraph 3, it has then been clearly stated that “the Master of the Defendant vessel accordingly confirmed his estimated time of arrival at the nominated site so that the supply of bunkers could accordingly be facilitated”. Then, it has been averred that the Chief Engineer of the vessel acknowledged receipt of the bunkers without qualification. This aspect of the case, as already noted earlier, has been duly proved by the Plaintiff in the form of two telexes dated 27th February 1997 and 1st March 1997 of the Master. In the earlier telex dated 27th February 1997, the Master communicated that he was indicating the estimated time of arrival of the vessel at Fujairah in accordance with the nomination of the owners for the receipt of bunkers. That being the position, while there can be no dispute as regards the principle of law which has been laid down in the earlier judgments of this Court, the facts of the present case establish clearly that the supplies were made at the instance of the owner this being confirmed by the Master of the Vessel who was a person authorised by the owner of the vessel. The Plaintiff has duly established that supplies of necessaries were effected. Issues 3 and 5 are answered accordingly.
17. ISSUE NO. 6: Whether the claim for necessaries constitutes a maritime lien?
This issue stands concluded by a recent judgment of the Supreme Court in Epoch Enterrepots v. M.V. WON FU . In fairness, it must be stated that both the Counsel, have fairly accepted before the Court that the judgment of the Supreme Court would conclude this issue. In the case which was decided by the Supreme Court, a suit for the recovery of an amount of Rs. 11 lakhs was instituted by the Plaintiff together with interest thereon by reason of loss and damages allegedly suffered on account of a breach of contract by the Defendant-vessel. The Plaintiff there had entered into an agreement with a mining company in Taiwan for the export of a consignment of Feldspar. In order to complete the agreement between the parties, the Plaintiff had entered into an agreement with the Defendant ship’s disponet owner for the export of the cargo from Tuticorin harbour to Taiwan. The agreement was stated to have been evidenced in the form of a fixture note dated 20th October 1995. The suit came to be dismissed by a Learned Single Judge of the Madras High Court in the Admiralty jurisdiction and that judgment was affirmed in appeal by the Appellate Bench. A bench of two Learned Judges of the Supreme Court held that a maritime lien can be said to exist and is restricted 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. The Supreme Court held that “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.” Referring to “the limited applicability of such a lien”, the Supreme Court held that “not every kind of service or every kind of damage which arises in connection with a ship gives rise to a maritime lien.” (para 22). However, the Court held that statutory enactments may list out other forms of maritime liens. In arriving at this conclusion, the Supreme Court adverted to the prior judgment of the Court in M.V. AL Quamar v. Tsavliris Salvage (international) Ltd. and Ors. and the provisions of the International Convention for Unification of Certain Rules Relating to Maritime Liens and Mortgages at Brussels (1967). In so far as the facts of the case before the Supreme Court were concerned, it was held that inasmuch as the claim arose out of a contract de hors a maritime lien, no action in rem was permissible and a suit in the exercise of the original jurisdiction of the Madras High Court could not be maintained against the vessel. In view of the judgment of the Supreme Court, this issue will have to be answered in the negative. The claim of the Petitioner is not based on any of the five categories set out in the judgment of the Supreme Court wherein only a maritime lien has been held to exist.
18. In view of the judgment of the Supreme Court in Epoch Enterrepots (supra), the claim of the Plaintiff cannot be regarded as having crystallised into a maritime lien. That being the foundation of the claim in the suit. The Plaintiff is not entitled to relief. The suit is liable to be dismissed and shall accordingly stand dismissed with costs.
19. The Learned Counsel appearing on behalf of the Plaintiff prays that the Bank Guarantee which has been furnished by the Defendant may be ordered to be kept as alive for a further period so as to enable the Plaintiff to pursue its remedy in appeal. The Learned Counsel appearing on behalf of the Defendant opposes. In my view, the ends of justice would be served if a direction is issued to the effect that the Bank Guarantee shall be kept alive for a further period of two weeks. Ordered accordingly.