{"id":48337,"date":"2011-05-11T00:00:00","date_gmt":"2011-05-10T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/destel-vs-m-on-11-may-2011"},"modified":"2017-11-01T07:17:48","modified_gmt":"2017-11-01T01:47:48","slug":"destel-vs-m-on-11-may-2011","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/destel-vs-m-on-11-may-2011","title":{"rendered":"Destel vs M on 11 May, 2011"},"content":{"rendered":"
Gujarat High Court<\/div>\n
Destel vs M on 11 May, 2011<\/div>\n
Author: Anant S. Dave,&Nbsp;<\/div>\n
   Gujarat High Court Case Information System \n\n  \n  \n    \n\n \n \n    \t      \n         \n\t    \n\t\t   Print\n\t\t\t\t          \n\n  \n\n\n\t \n\t \n\t \n\t \n\t \n\t \n\t \n\t \n\t \n\t \n\t \n\t \n\t \n\t\n\n\n \n\n\n\t \n\nAS\/1\/2011\t 13\/ 13\tJUDGMENT \n \n \n\n\t\n\n \n\nIN\nTHE HIGH COURT OF GUJARAT AT AHMEDABAD\n \n\n \n\n\n \n\nADMIRALITY\nSUIT No. 1 of 2011\n \n\nwith\n \n\nOJ\nCivil Application No. 49 of 2011\n \n\nwith\n \n\nOJ\nCivil Application No. 92 of 2011\n \n\nwith\n \n\nOJ\nCivil Application No. 101 of 2011\n \n\n \n\n\n \n\nFor\nApproval and Signature:  \n \nHONOURABLE\nMR.JUSTICE ANANT S. DAVE\n \n======================================\n \n\t  \n\t \n\t  \n\t\t \n\t\t\t \n\n1\n\t\t\n\t\t \n\t\t\t \n\nWhether\n\t\t\tReporters of Local Papers may be allowed to see the judgment ? yes\n\t\t\n\t\n\n \n\t  \n\t \n\t  \n\t\t \n\t\t\t \n\n2\n\t\t\n\t\t \n\t\t\t \n\nTo\n\t\t\tbe referred to the Reporter or not ? yes\n\t\t\n\t\n\n \n\t  \n\t \n\t  \n\t\t \n\t\t\t \n\n3\n\t\t\n\t\t \n\t\t\t \n\nWhether\n\t\t\ttheir Lordships wish to see the fair copy of the judgment ? no\n\t\t\n\t\n\n \n\t  \n\t \n\t  \n\t\t \n\t\t\t \n\n4\n\t\t\n\t\t \n\t\t\t \n\nWhether\n\t\t\tthis case involves a substantial question of law as to the\n\t\t\tinterpretation of the constitution of India, 1950 or any order\n\t\t\tmade thereunder ? no\n\t\t\n\t\n\n \n\t  \n\t \n\t  \n\t\t \n\t\t\t \n\n5\n\t\t\n\t\t \n\t\t\t \n\nWhether\n\t\t\tit is to be circulated to the civil judge ? no\n\t\t\n\t\n\n \n\n \n======================================\n \n\nDESTEL\nMARINE LIMITED - Plaintiff(s)\n \n\nVersus\n \n\nM\nV STAR 7 - Defendant(s)\n \n\n======================================\n \nAppearance :\n \n\nMs.\nPaurami B. Sheth for the plaintiff.\n \n\nMr.Mihir\nThakore, Senior Advocate with Mr. R.S. Sanjanwala  for the\ndefendant. \n======================================\n \n\t  \n\t \n\t  \n\t\t \n\t\t\t \n\nCORAM\n\t\t\t: \n\t\t\t\n\t\t\n\t\t \n\t\t\t \n\nHONOURABLE\n\t\t\tMR.JUSTICE ANANT S. DAVE\n\t\t\n\t\n\n \n\n \n \n\n\n \n\nDate\n: ___\/05\/2011 \n\n \n\nCAV\nJUDGMENT \n<\/pre>\n
1\tPlaintiff
\nis a Company registered in Liberia engaged in the business of supply
\nof bunkers. The defendant-vessel is a Tanzania flagged vessel
\npresently in port and harbour Alang. The plaintiff seeks security
\nfrom the defendant for a sum of USD 1 million towards security for
\narbitration in New York arising out of unpaid supply of fuel and
\nbunkers as mentioned in paragraphs 2 to 4 of the plaint.\n<\/p>\n
2\tIt
\nis not in dispute that the claim made in the present suit is about
\nsupply of necessaries and no one disputes that it is not ‘maritime
\nclaim’ and the defendant also accepts the same.\n<\/p>\n
3\tAt
\nthe outset, the learned counsel for the defendant has raised
\npreliminary objection that the suit is not maintainable in view of
\nthe claim made only for security pending arbitration and no claim is
\npreferred for any money decree and reliance is placed on  the
\njudgment dated 17th February 2011 passed by a Division
\nBench of this Court in O.J. Appeal No.6 of 2011 confirming  the
\ndecision dated 24.1.2011 of this Court in Admiralty Suit No.10 of
\n2010.  It is submitted that no arrest can be ordered on the
\nprinciples akin to Order 38 Rule 5 of the Code of Civil Procedure in
\nview of the aforesaid judgment of the Division Bench and the law laid
\ndown by the Apex Court in paragraph
\n74 of M.V. Elisabeth and others vs. Harwan Investment & Trading
\nPrivate Limited,<\/a> reported in (1993) Suppl. 2 SCC 433, that ‘these
\nprinciples of international law, as generally recognised by nations,
\nleave no doubt that, subject to the local laws regulating the
\ncompetence of courts, all foreign ships lying within the waters of a
\nState, including waters in ports, harbours, roadsteads, and the
\nterritorial waters, subject themselves to the jurisdiction of the
\nlocal
\nauthorities in respect of maritime claims and they are liable to be
\narrested for the enforcement of such claims’.\n<\/p>\n
3.1
\nIt is further submitted that the vessel is imported in India on which
\ncustoms duty was paid, beaching permission and other clearance were
\ngranted by the competent authorities. Therefore the vessel is no more
\nintended to be run as a vessel and it is not meant for navigation.
\nThe vessel was beached at 4.30 a.m. on 5.1.2011 before the said
\nvessel was arrested by this Court and once the vessel is beached, it
\nis no more in the territorial waters and it is on the landmass of
\nIndia. Hence, no admiralty jurisdiction can be invoked.\n<\/p>\n
3.2\tOn
\nmerits, referring to the claims of Bunkers\/fuel supplied, payment for
\nport dues, and payment for transportation of Crank Shaft, it is
\nsubmitted that all the aforesaid claims were not in respect of
\n‘necessaries’ supplied in USA. It is submitted that all the payments
\nwere to be made in Africa or Europe. Maritime liens arise by
\noperation of law and they do not require any judicial or contractual
\naction for its creation.  It is submitted that the Federal Statute of
\nUSA creates a maritime lien in favour of a person providing
\nnecessaries to a vessel on the order of the owner or a person
\nauthorized by the owner. It is not impermissible for the plaintiff to
\nclaim lien not on the basis of goods necessaries having been supplied
\nin USA, but on the basis of a subsequent contract having been entered
\ninto on 20.1.2010 between the plaintiff and Michail Arhangelos S.A.
\neach having their office in Greece and by agreement declaring that
\nthe said Agreement shall be governed by the Federal Maritime Law of
\nUnited States. The said law has no connection to the supplies made.\n<\/p>\n
3.3
\nIt
\nis submitted that, assuming without admitting that maritime lien is
\ncreated as per the Federal Law of USA, such lien cannot be enforced
\nin India as India does not recognize maritime lien in respect of
\nsupply of necessaries   as laid down by the Apex Court in Epoch
\nEnterrepots vs. M.V. Won Fu,<\/a> (2003) 1 SCC 305 and the law which will
\nbe applicable for the purposes of determining the lien would be Lex
\nFori and not the law of the contract. Reliance is placed on Bankers
\nTrust International Ltd vs. Todd Shipyards Corporation reported in
\n(1981) 1 A.C. 221.\n<\/p>\n
3.4
\nIt is submitted that even if it is presumed that the claim of the
\nplaintiff is a maritime lien, it is not a maritime lien under Article
\n4 and the same shall stand extinguished at the expiry of six months
\nas per Article 6 of International Conventions of Maritime Liens and
\nMortgages, 1993. Even otherwise, all maritime liens stand
\nextinguished after a period of one year under Article 9 of the said
\nconvention.   It is further submitted that as the ownership of the
\nvessel has changed from the original owner Michail Arhngelos to Star
\nmatrix and finally to Kathiawar Steels, no maritime claim can lie
\nagainst the vessel and the plaintiff has no maritime lien and the
\nsuit deserves to be dismissed.\n<\/p>\n
4\tIt
\nis the case of the plaintiff that the plaintiff supplies necessaries
\nto vessels on Std. Sales Terms and Conditions dated 30.7.2007.  That,
\nthe plaintiff supplied necessaries to the defendant-vessel at
\ndifferent Ports in 2008 for which the Master of vessel issued bunker
\ndelivery receipts. That,  the defendant-vessel defaulted in making
\npayments by due date and, thereafter, the plaintiff and the owner
\nMichail entered into Debt Acknowledgment Agreement (DAA) dated
\n20.1.2010 under which the owner accepted that the plaintiff had right
\nof maritime lien on the vessel of plaintiff covering all bunker
\nsupplies and invoices.  Under DAA, the owner agreed to make full
\npayment by 31.3.2010 but made no payment. Hence, the plaintiff
\nultimately invoked clause C of DAA and commenced arbitration
\nproceedings in New York.\n<\/p>\n
4.1\tIt
\nis submitted by the plaintiff that the vessel is registered with St.
\nKitts Nevis and International Ship Registry and still continues to be
\nregistered with them. Having come to know that the vessel has come to
\nAlang, the plaintiff hs filed the present suit for security pending
\narbitration on 4.1.2011. By order dated 5.1.2011, this Court granted
\narrest of the defendant-vessel and permitted her to beach without
\nprejudice to rights and contentions of the plaintiff.\n<\/p>\n
4.2\tThe
\nlearned counsel for the plaintiff has relied upon Article 7 of  of
\n Brussels Convention of 1952, paragraph 74 of M.V. Elisabeth and
\nothers vs. Harwan Investment & Trading Private Limited,<\/a> reported
\nin (1993) Suppl. 2 SCC 433, about admiralty jurisdiction and the
\ndecision of the Bombay High Court in the case of Islamic Republic of
\nIran vs. M.V. Mehrab, reported in AIR 2002 Bombay 517, in support of
\nthe contention that exercise of admiralty jurisdiction is permissible
\neven if arbitration is pending. It is also submitted that since there
\nis no change of ownership even after MOA dated 2.4.2010 between the
\nplaintiff of AS No.3 of 2011 of the defendant-vessel and the supply
\nof ‘necessaries’ are governed under Federal Maritime law as per sales
\nterms and conditions dated 30.7.2007 and also as per the Debt
\nAcknowledgment Agreement [DAA} dated 21.10.2010 it constitutes
\nmaritime lien and, therefore, it is not necessary that all supplies
\nare to be made in the USA  to claim maritime lien. The plaintiff has
\nalso relied on Article 6 of Maritime Lien Convention 1993 and the
\nprinciples of ‘Lex Fori’ and also the order dated 8.11.2011
\nof this Court in the case of M.V. Sena vs. Galeheal Inc., Admiralty
\nSuit Nos. 8 of 2001 and 9 of 2001; the judgment of the Bombay High
\nCourt in the case of  Sigma Coatings [AIR 1995 Bombay 281], the
\ndecision of the Apex Court in the case of National Thermal Power [AIR
\n1993 SC 998] and the decision in VSNL [(1997) 7 SCC 127] about grant
\nof relief and continuation of the same.\n<\/p>\n
5\tHaving
\nheard the learned counsel for the parties and considering the rival
\nsubmissions of the parties, the preliminary issue ‘whether
\nbeaching of vessel before the arrest order came to be passed would
\nbar admiralty jurisdiction’
\ndeserves to be considered  in view of the
\nfollowing decisions of the Bombay High Court [i] in Appeal No.635 of
\n2001 in the case of Communications and Commerce International Pvt Ltd
\nvs. M.V. Saba decided by the Division Bench on 10.7.2001 [ii] in the
\ncase M.V. Saba decided by the Single Judge; and [iii] in the case of
\nNew Era Shipping Ltd vs. M.V. Express & others, reported in
\n2007(6) Bom.C.R.138.\n<\/p>\n
6\tIn
\nthe judgment dated 10th July 2001 in Appeal (L) NO.835 of
\n2001 in Admiralty Suit No.14 of 2001, the Division Bench of the
\nBombay High Court, upholding the view of the learned Single Judge,
\nheld that once the vessel is beached, no maritime claim can be
\nentertained while exercising admiralty  jurisdiction. The Division
\nBench has reproduced paragraph 7 of the judgment dated 28.6.2011 of
\nthe learned Single Judge and ultimately found that the vessel was
\nbeached for the purpose of demolition or breaking, and it could not
\nhave been described as ‘ship’ or ‘vessel’ and the claim for an action
\nin rem was not sustainable.\n<\/p>\n
6.1\tIn
\nthe judgment dated 7th July 2006 in Civil Application No.6
\nof 2006 in Admiralty Suit No.1 of 2006, reported in
\nManu\/GJ\/8251\/2006, this Court held in paragraphs 21 and  23 as under:\n<\/p>\n
“21.\n<\/p>\n
The question for consideration, still would be that after partial
\ndemolition of the ship, can the same be held to be navigable? In my
\nconsidered opinion, report of the Commissioner makes it clear that
\nthe ship, as on today, is no more navigable. The argument of the
\nlearned counsel for the plaintiff that even if the wrecks of a ship
\nare repaired, it can be made navigable, then, the wrecks would be
\ntaken to be a ship or a vessel, is too tall an argument. Navigability
\nis the first requirement for a ship. If an article as it is, cannot
\nbe navigated in the deep waters, then, such article cannot be called
\na ship or a vessel fit for navigation.    Because of the demolition
\nof a ship into  small pieces, there does not exist a ship or a
\nvessel, the argument of the learned counsel for the  plaintiff is
\napplied, there would  be chaotic results. Debris and small pieces
\ncannot be said to be a ship or a vessel. In the  modern times, Radio
\nequipments are must. In the present matter, the Radio equipment has
\nalready been demolished. It is also to be seen that the vessel is
\nlying beached on Plot No. 80 of the applicant-firm. It has not been
\nbeached for repairs or  allied purpose, but it has been  imported
\ninto Indian territory  as goods for home consumption after payment of
\nthe customs duty.  The intention of the importer would be material
\nand would be decisive to some extent. It is undisputed that  middle
\nportion of the vessel’s nose has been found to be cut.  Cuting of the
\nmiddle portion of the vessel’s nose  would make it clear that the
\nvessel is not to be re-used, but the same is to be  consumed as
\ngoods.\n<\/p>\n
23.
\nThe dictionary meaning of “ship” is  “vessel
\nemployed in navigation”. Navigability of a vessel is dominant
\nfactor in deciding whether it is  a ship or not. Navigability of a
\nvessel would not depend only on its mechanical navigability, but
\nwould also depend on its legal navigability.  From the facts, it
\nwould clearly appear that that the Intervener declared their
\nintention to authorities in India that they were importing goods in
\nIndia and they wanted to discontinue its use as a ship for  carrying
\ncargo or  passengers and they accordingly paid the customs duty on
\nthe vessel as goods, the owners became  disentitled to navigate the
\nvessel, and therefore, the vessel ceased to be a ship on its import
\nafter payment of the custom duty for its home consumption. I would
\nrespectfully agree with the observations made by the learned Single
\nJudge in the above-referred matter that the moment, vessel was
\nbeached for the purpose of demolition or breaking up, it ceased to be
\na ship or a vessel.”\n<\/p>\n
6.2\tIn
\nthe case of New Era Shipping Limited vs. m.v. P. Express, reported in
\n2007 (6) Bom.C.r. 138, the learned Single Judge of the Bombay High
\nCourt [Coram: Dharmadhikari S.C., J.], in paragraph 46, has relied
\nupon the decision in the case of North End Oil Limited vs. m.v. Kim
\nAn and another, 1992 (2) Bom.C.R. 448, and the paragraph 66 of the
\nsaid judgment was reproduced by Justice Dharmadhikari about the
\nburden cast upon the plaintiff when the suit is filed for action in
\nrem and arrest of vessel to prima-facie prove that the res was in
\nexistence on the date of its arrest. If the defendant denies the
\nexistence of res and contends that res was demolished, the burden is
\nstill on the plaintiff to prove that on the date of arrest the res
\nwas intact in existence and not demolished to such an extent so as to
\nget converted in to goods. Thereafter, while considering the judgment
\nin the case of Saaba [supra], Justice Dharmadhikari held in paragraph
\n47 as under:\n<\/p>\n
“47.\n<\/p>\n
The third decision is of another learned Single Judge of this Court,
\n(D.K.Deshmukh, J). in Notice of Motion No.1302 of 2001 in Admiralty
\nSuit No.14 of 2001 dated 28th June 2001. After considering the rival
\ncontentions in paras 7 and 8 this is what is observed by the learned
\nSingle Judge:-\n<\/p>\n
“7.\n<\/p>\n
Now if in the light of these rival submissions the record of the case
\nis perused, it is clear that when the plaint that is filed in the
\npresent suit was drafted, the plaintiffs were aware that the
\ndefendant No.1 vessel is at present lying at the port and harbour at
\nMumbai. The plaintiffs were also aware that she is scheduled to be
\nbeached on 19th May, 2001. The plaintiffs have stated in the plaint
\nthat they are carrying on business of managers of merchant vessels.
\nIf the plaintiffs on 19th May, 2001 were aware that the vessel is in
\nMumbai and that it is to be beached on 19th May, 2001 for the purpose
\nof demolition, then in my opinion, considering the business which the
\nplaintiffs carry on, the plaintiffs must have made enquiries with the
\nport authorities. In my opinion, therefore, it would be safe to
\nassume that the 46 plaintiffs were aware of the purpose for which the
\nvessel has been brought to Mumbai. It is clear from the bill of entry
\nproduced by the defendants that the defendant No.1 vessel was
\nimported into India for the purpose of demolishing and that because
\nthe vessel was brought in India for the purpose of demolition, the
\nImporter was held liable for payment of customs duty on the vessel
\nand it became goods which were being imported in India. In fact, the
\ncaption of the bill of entry is “Bill of Entry for Home
\nConsumption”. The bill of entry further shows that by 10th May,
\n2001, customs duty had already been paid for importing the vessel,
\nbut the plaintiffs chose not to disclose this in the plaint. It is
\ndifficult to believe that a plaintiff who know even the exact date on
\nwhich the vessel is to be beached for demolition, was not in a
\nposition on enquiry to find out the purpose for which the vessel has
\nbeen imported and as to whether any payment have been made for that
\npurpose. Considering that the plaintiffs are in the business of
\nmanaging the vessels, it would be safe to assume that, it knew that,
\nfor demolition of a vessel, the owners have to take a plot on lease,
\nhave to pay customs duty on the vessel, therefore it cannot be
\nbelieved that the plaintiffs, who knew that the vessel is scheduled
\nto be beached for demolition on 19th May, 2001, did not know that
\ncustoms duty has been paid on 8th May, 2001, that a plot has been
\ntaken on lease for the purpose of beaching the vessel. But the
\nplaintiffs have chosen not to disclose these facts in the plaint. It
\nis further pertinent to note, according to the agreement between the
\nplaintiffs and the owners of the vessel, the crew of the vessel was
\nto be engaged by the plaintiffs and the defendants have stated in the
\naffidavit, that when the vessel reached Mumbai, the crew of the
\nvessel was Pakistani and the plaintiffs are also a Pakistani Company.
\nIn any case, from the bill of entry and documents produced by the
\ndefendants, it is clear that the vessel was imported in India for the
\npurpose of breaking it. Perusal of provisions of clause 2 of
\nAdmiralty Act, 1861 shows that a ship includes any description of
\nvessel used in navigation. Thus, the Admiralty Act does not define
\nthe word “Ship”. In the admiralty jurisdiction of this
\nCourt, this Court can entertain an action in rem against a ship. The
\nGeneral Clauses Act also defines the term “Ship” but it
\nalso gives inclusive definition. Therefore, so far as the meaning of
\nthe term “Ship” is concerned, we will have to go back to
\nthe meaning attached to the term in common parlance. Dictionary
\nmeaning of the term “Ship” is a vessel employed in
\nnavigation. Thus navigability of the vessel is a dominant factor in
\ndeciding whether it is a ship or not. The navigability of a vessel
\nwill depend not only on its mechanical navigability but also on its
\nlegal navigability. It appears, that once the defendants, declared
\ntheir intention to the authorities in India, that they are importing
\nthe vessel as goods in India and they want to discontinue its use as
\na ship for carrying cargo and paid customs duty on the vessel as
\ngoods. Legally, the owners became disentitled to navigate the vessel,
\nand therefore, from that  moment the vessel ceased to be a ship. The
\ndefendant No.1 vessel when it was imported into India was definitely
\na ship but the moment the owners declared their intention to
\ndiscontinue its use as ship or a vessel and not only declared their
\nintention but acted pursuant to that intention and made declarations
\nbefore the authorities and paid amounts and took further actions like
\ntaking a patch on lease for breaking of the ship, their intention was
\nmanifest that they want to discontinue the use of the defendant No.1
\nvessel as a ship. A ship like any other thing remains entitled to its
\ndescription until facts are established to show that it has become
\ndisentitled to its ordinary name or description. On import of the
\ndefendant No.1 vessel into India as goods and payment of customs duty
\npursuant to that, disentitled the owners to use the defendant No.1 as
\na ship or a vessel. In any case, when at 9.45 a.m. on 19th May, 2001,
\nthe vessel was beached for the purpose of demolition or breaking up,
\nit could not have been described as a ship or a vessel. In my
\nopinion, therefore, the defendant No.1 was not amenable to an action
\nin rem on 19th May, 2001 and therefore, obviously it could not have
\nbeen arrested.\n<\/p>\n
8.
\nIn so far as the judgements  referred to above relied on by the
\nlearned counsel for the plaintiffs are concerned, I have gone through
\nthe judgements. Those judgements cannot be said to be authority for
\nthe proposition that a ship continues to be treated as a ship either
\ntill its registration continues or till it looks like a ship. On the
\nother hand, in my opinion, the judgement relied on by the learned
\ncounsel for the plaintiffs go to show that in determining whether a
\nship can be continued to be treated as a ship or not, the intention
\nof the persons in control of the ship is material inasmuch as though
\na vessel or a ship may be incapable of being used as a ship or vessel
\ntemporarily either because it has met with an accident or because
\nextensive repairs are necessary to it, but if the owners of the
\nvessel intend to continue to use it as a ship; or a vessel and for
\nthat purpose, takes actions, then, the vessel can still be treated as
\na vessel. The judgements referred to above do not support
\nthe case of the plaintiffs.”\n<\/p>\n
6.3\tIn
\nparagraph 60, the Court considered the judgment of the Apex Court in
\nthe case of m.v. Elisabeth [supra] and in paragraph 63 held as under:\n<\/p>\n
“In
\nmy view, the pleadings in the present cases are on par with the
\ndecisions which have been rendered by learned Single Judges of this
\nCourt [D.G. Deshpande, J. and D.K. Deshmukh, J.]. These decisions are
\nsquarely applicable to the facts of this case. The law laid down
\ntherein, therefore, applies with full force. In such circumstances,
\nthe request made by Ms. Sett to accept the ratio of these cases
\ndeserves to be accepted.”\n<\/p>\n
7\tKeeping
\nin mind the above law laid down by the Bombay High Court and this
\nCourt, in the facts of the present case, as per the MOA dated
\n2.4.2010, it was agreed between the parties, namely, the original
\nseller and the buyer Star Matrix that the vessel was making a final
\nvoyage for ship breaking and the vessel was to be demolished.\n<\/p>\n
7.1.\tIn
\nthe above context, the following events are worth-noting. Certificate
\nof non-encumbrance dated 27th
\nDecember 2010 was issued by Tanzania Zanzibar International Registry
\nof Shipping, letter of credit was opened on 29th
\nDecember 2010 by Kathiawar Steels, the vessel arrived at Alang
\nAnchorage at 11.50 p.m. [23.50 hrs.] on 31st
\nDecember 2010, amendment of letter of credit was issued on 3rd
\nJanuary 2011 and the letter of credit was released on the same day
\nfor 2105270 USD. On the very day, the vessel was registered by the
\nOfficer of the Gujarat Pollution Control Board and upon submission of
\nthe report the GPCB recommended for issuing beaching permission. On
\n4th
\nJanuary 2011, the following events took place: Commercial invoice was
\nraised by Star Matrix Limited on Kathiawar Steels; bill of sale was
\nissued acknowledging receipt of purchase price of the vessel;
\ntransfer of property, title and ownership in the vessel in favour of
\nKathiawar Steels; notice of readiness was issued by the agent of Star
\nMatrix Limited in favour of Kathiawar Steels; physical delivery was
\ntaken by Kathiawar Steels upon issuance of certificate of delivery by
\nthe Master of the vessel; bill
\nof entry was made with the customs authorities and customs duty of
\nRs.1,68,18,923\/- was paid for import of the vessel in India for home
\nconsumption by Kathiawar Steels; the Gujarat Maritime Board granted
\npermission to submit relevant documents for beaching the vessel; the
\nSuperintendent of Customs addressed a letter that they have no
\nobjection to grant clearance for beaching the vessel; the Gujarat
\nMaritime Board granted  beaching permission to the vessel and in fact
\nthe vessel was beached in the early morning at 4.30 a.m. on 5th
\nJanuary 2011 as per the certificate issued by the Gujarat Maritime
\nBoard on 10th
\nJanuary 2011 even before the arrest order came to be passed on 5th
\nJanuary 2011.\n<\/p>\n
8.\tIn
\nthe admiralty jurisdiction of this Court, this Court can entertain an
\naction in rem against a ship. The General Clauses Act also defines
\nthe term “Ship” but it also gives inclusive definition.
\nTherefore, so far as the meaning of the term “Ship” is
\nconcerned, we will have to go back to the meaning attached to the
\nterm in common parlance. Dictionary meaning of the term “Ship”
\nis a vessel employed in navigation. Thus navigability of the vessel
\nis a dominant factor in deciding whether it is a ship or not. The
\nnavigability of a vessel will depend not only on its mechanical
\nnavigability but also on its legal navigability. Once the Authorities
\nhave undertaken and completed all the procedural formalities of
\nbeaching of the vessel, including payment of customs duty, etc.,
\nlegally, the owners became disentitled to navigate the vessel, and
\ntherefore, from that  moment the vessel ceased to be a ship. The
\ndefendant-vessel was making final voyage for ship-breaking and when
\nit was imported into India it was definitely a ship but the moment
\nthe buyers declared their intention to discontinue its use as ship or
\na vessel and not only declared their intention but acted pursuant to
\nthat intention and made declarations before
\nthe authorities and paid amounts, customs duty, etc., the intention
\nwas manifest  to discontinue the use of the defendant-vessel as a
\nship. In any case, when in the
\nearly morning at 4.30 a.m. on 5th
\nJanuary 2011 as per the certificate issued by the Gujarat Maritime
\nBoard,
\nthe vessel was beached for the purpose of demolition or breaking up,
\nit could not have been described as a ship or a vessel. In my
\nopinion, therefore, the defendant-vessel was not amenable to an
\naction in rem on 5.1.2011 and, therefore, obviously it could not have
\nbeen arrested.\n<\/p>\n
Once the vessel was beached, it was no more in the territorial waters
\nand the jurisdiction would be only of Civil Court as per the local
\nlaw and no admiralty jurisdiction could have been invoked. Further,
\nonce the vessel was beached, it was no more in the territorial waters
\nand the jurisdiction would be only of Civil Court as per the local
\nlaw and no admiralty jurisdiction could have been invoked. In view of
\nthe law laid down by this Court in the case of Western Ship Breaking
\nIndustry vs. Laiki Bank (Helias) S.A., Manu\/GJ\/8251,  the<\/a>  present
\nsuit deserves to be dismissed.\n<\/p>\n
16.\tThe
\nother issues raised by the learned counsel for the plaintiff need not
\nto be gone into. Since the suit is dismissed on the preliminary
\ncontention raised about  beaching of vessel before the arrest order
\ncame to be passed, it is not necessary for this Court to discuss the
\nother issues on merits.\n<\/p>\n
17.\tIt
\nis mentioned that, against the judgments of the Bombay High Court, as
\nreferred to in this judgment, Special Leave Petitions were filed in
\nthe Apex Court wherein the stay was granted and the Special Leave
\nPetitions are pending. However, the law laid down in  the judgments
\nof the Bombay High Court remains as it is.\n<\/p>\n
17.\tIn
\nthe result, the suit is dismissed with no order as to costs. The
\norder of arrest is vacated. Notice is discharged. Deposit, if any, be
\nrefunded. Civil Applications are disposed of.\n<\/p>\n
18.\tAt
\nthis stage, the learned advocate for the plaintiff requests to extend
\nthe stay granted earlier about the arrest of the vessel, which is
\nopposed by the learned advocate for the defendant. In view of the
\nspecific finding about beaching of the vessel before the arrest order
\nwas passed, the said request is rejected.\n<\/p>\n
(ANANT
\nS. DAVE, J.)<\/p>\n
(swamy)<\/p>\n
\t\t   \u00a0\u00a0\u00a0<\/p>\n
\t\t   Top<\/p>\n","protected":false},"excerpt":{"rendered":"
Gujarat High Court Destel vs M on 11 May, 2011 Author: Anant S. Dave,&Nbsp; Gujarat High Court Case Information System Print AS\/1\/2011 13\/ 13 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD ADMIRALITY SUIT No. 1 of 2011 with OJ Civil Application No. 49 of 2011 with OJ Civil Application No. 92 of 2011 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[16,8],"tags":[],"class_list":["post-48337","post","type-post","status-publish","format-standard","hentry","category-gujarat-high-court","category-high-court"],"yoast_head":"\nDestel vs M on 11 May, 2011 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/destel-vs-m-on-11-may-2011\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Destel vs M on 11 May, 2011 - 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