MAYAR (H. K. ) LTD. Vs. OWNERS AND PARTIES, VESSEL M. V. FORTUNE EXPRESS
LAWS(SC)-2006-1-76
SUPREME COURT OF INDIA
Decided on January 30,2006

Mayar (H. K. ) Ltd. Appellant
VERSUS
Owners And Parties, Vessel M. V. Fortune Express Respondents


Referred Judgements :-

R. V. GENERAL COMMRS. FOR THE PURPOSES OF THE INCOME TAX ACT FOR THE DISTRICT OF KENSINGTON [REFERRED TO]
CHITTARANJAN MUKHERJI VS. BARHOO MAHTO [REFERRED TO]
S J S BUSINESS ENTERPRISES P LTD VS. STATE OF BIHAR [REFERRED TO]
HANSRAJ BAJAJ VS. INDIAN OVERSEAS BANK LTD [REFERRED TO]
KRISHNAN VS. KRISHNAMURTHI [REFERRED TO]
CRESCENT PETROLEUM LIMITED VS. M V MONCHEGORSK [REFERRED TO]
BHAGAT SINGH BUGGA VS. DEWAN JAGBIR SAWHNEY [REFERRED TO]


JUDGEMENT

P.P.NAOLEKAR, J. - (1.)LEAVE granted.
(2.)THIS appeal is preferred by the plaintiff appellants challenging the judgment of the Division Bench of the Calcutta High Court dated 23-8-2004 whereby the plaintiffs' suit filed in admiralty jurisdiction was directed to remain permanently stayed and the bank guarantee furnished by the defendant respondents in the suit was directed to stand immediately discharged. The plaintiff appellants were also directed to pay the costs.
Appellant 1 Mayar (H.K.) Limited filed admiralty suit in the High Court at Calcutta on 27-3-2000 in admiralty jurisdiction along with Appellants 2 to 5 with whom a contract to sell the goods was entered into by plaintiff Appellant 1, against the defendant respondents alleging, inter alia, that plaintiff Appellant 1 (hereinafter called "A 1") is a company incorporated under the laws of Hong Kong and engaged in the business of export and import of timber logs. By and under a Charter Party Agreement entered into on 7-1-2000 between Plaintiff 1 Mayar (H.K.) Limited and Defendant 2 Trustrade Enterprises PTE Ltd., a company incorporated under the appropriate laws of Singapore and carrying on business, inter alia, at 101, Cecil Street 10-04 Tong. Eng. Building, Singapore (description given in the plaint) an owner on behalf of the vessel MV Fortune Express (hereinafter referred to as "the vessel"), a foreign vessel flying the flag of Singapore, the defendants agreed to carry on board the vessel a quantity of 5200 CBM Barawak round logs or up to vessel's full capacity for discharge at the port of Calcutta, India. In or about January 2000, A 1 purchased various quantities of Malaysian Barawak logs for the purpose of shipment to the port of Calcutta and to sell the same to various third parties having their offices in West Bengal, India. Under five bills of lading dated 21-2-2000, 17-2-2000, 24-2-2000, 15-2-2000 and 18-2-2000, the defendants agreed to carry on board the said vessel 1638 pieces of logs of different quality measuring 5325.2941 CBM from various ports of Malaysia to the port of Calcutta, India. At the request of A 1, the five bills of lading were split into 17 bills of lading at the instance of the defendants so as to facilitate sale by A 1 to various buyers in West Bengal, India. Appellants 1 to 5 are the holders in due course and / or endorsees of the six of those bills of lading which dealt with 642 pieces of logs. As per the stowage plan of the vessel, out of the 642 logs, the subject matter of bills of lading, which were loaded on board the vessel, 578 logs were lying on the deck of the vessel. The vessel arrived at the port of Calcutta on 7-3-2000 and started discharging the cargo lying on its deck from that date till 15-3-2000. At the time of the discharge of the cargo lying on the deck of the vessel, it was found that 456 logs out of 578 logs which were lying on the deck of the vessel were missing and had been short landed. It has been alleged that in breach of the defendants' duty as a carrier and / or bailee for reward and/as evidenced by the six bills of lading, the defendants have failed to deliver 456 logs whereby the plaintiffs have suffered loss and damage. The plaintiffs have also alleged that the defendants also acted in breach of their contract entered into with A 1 being the shipper under the aforesaid six bills of lading. The defendants have acted in breach of the Charter Party Agreement entered with A 1 by failing and neglecting to carry on board the vessel from the loading point to the discharge port, the agreed quantity of logs. As the logs were not delivered, all the plaintiffs are entitled to claim from the defendants the proportionate value and expenses incurred on account of the said missing 456 logs which is approximately valued at Rs 1,30,19,688.44p. as per the particulars stated hereinbelow:

The plaintiffs have also claimed from the defendants interest on the aforesaid sum at the rate of 24 per cent per annum until realisation of the entire sum from the defendants. The plaintiffs have prayed for the arrest of the vessel along with her tackle, apparel and furniture.

(3.)ON 27-3-2000 itself, the learned Single Judge of the Calcutta High Court passed an order that it appears that the claim of the plaintiffs arises out of short landing of the goods as mentioned in the affidavit of arrest amounting to a total sum of Rs 1,30,19,688.44p. The vessel in question is a foreign vessel and does not have any assets within the jurisdiction of the Court. The said vessel is now lying at Kidderpore Dock and if the said vessel is allowed to ply from the said dock then the decree that may have been passed in the suit in favour of the plaintiffs will frustrate the proceedings, as the defendant respondents have no assets within the jurisdiction of the Court and in view thereof the Marshall is directed to arrest the said vessel MV Fortune Express along with her tackle, apparel and furniture. It was made clear in the order that if the said vessel furnishes a bank guarantee for the amount mentioned in the order, with the Registrar, Original Side, High Court, Calcutta, they will be at liberty to apply before the Court for vacation of the order. On 12-4-2000, Punjab National Bank, Calcutta, submitted a letter of intent before the Registrar, High Court, Original Side, Calcutta regarding furnishing of the bank guarantee on behalf of the defendant respondents seeking order of the Court for release of the vessel. On submission of the letter of intent for furnishing the bank guarantee on behalf of the owners and parties interested in the vessel i.e. the respondents, dated 12-4-2000, the learned Single Judge of the Calcutta High Court on 12-4-2000 itself has passed an order releasing the vessel from arrest vacating the order of arrest dated 27-3-2000. The order was passed without prejudice to the rights and contentions of the owners of the vessel that the suit is not maintainable. On 17-5-2000, Punjab National Bank furnished the bank guarantee binding itself and the defendants for the payment of the amount of Rs 1,30,19,688.44p. The guarantee incorporated a term that the defendants and the Bank do thereby submit themselves to the jurisdiction of the Court.


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