The High Court of Gujarat granted a decree on admission in an admiralty suit filed by seafarers for unpaid wages against the sale proceeds of the vessel Nand Hazira.
A decree was passed granting the plaintiffs' claim for unpaid wages and interest against the sale proceeds of the Defendant Vessel based on a valid maritime lien.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
C/AS/2/2022 ORDER DATED: 26/07/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/ADMIRALTY SUIT NO. 2 of 2022 With
CIVIL APPLICATION (FOR DIRECTION) NO. 1 of 2022
In R/ADMIRALTY SUIT NO. 2 of 2022
=====================================================
SIDDHART BAK, FITTER
Versus
NAND HAZIRA IMO NO 8845456
=====================================================
Appearance:
NOTICE SERVED BY DS for the Defendant(s) No. 1
MS PAURAMI B. SHETH(841) for the Plaintiff(s) No. 1,2
=====================================================
CORAM: HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
Date : 26/07/2022
ORAL ORDER
1.Draft amendment as prayed for in OJCA No.1 of 2022 is granted and the same be carried out forthwith.2.Heard Learned advocate Ms. Paurami Sheth for the Plaintiffs/ Applicants.3.Learned advocate Ms. Paurami Sheth for the Plaintiffs submitted that the original Plaintiffs have filed above Suit for outstanding amount of their respective unpaid wages contending interalia that the services of the Plaintiffs were hired for the Defendant Vessel by entering into individual written contract through one M/s. Tapti Waterways PrivatePage 1 of 16
C/AS/2/2022 ORDER DATED: 26/07/2022
Limited, that upon their appointments, the
Plaintiffs were entitled for wages as well
regular supply of Fuel, Food and other bare
necessities, that the Plaintiffs have been paid
wages only till October, 2021 and further wages
were due from 01.11.2021 onwards, that the
Plaintiffs have come to know that one Yes Bank
has filed the suit before this Court and
procured arrest of the Defendant Vessel and
later on, in pursuance of the Application of the
Yes Bank, this Court has passed order for sale
of the Vessels, that having come to know about
the directions for sale of the Vessel, the
Plaintiffs preferred the present Suit and prayed
for following reliefs in paragraph 20 of the
Plaint which reads thus :-
a.That the Defendant Vessel Nand Hazira (IMO
No.8845456) and her Owner be ordered and
decreed to pay to the Plaintiffs the amount
of INR 70,000/- towards their wages from
01.11.2021 till 20.01.2022, court fees and
legal cost and expenses together with wages
from 21.01.2022 till date of sign off and
further interest thereon at the rate of 12%
p.a. from due date of payment of wages
until payment as per particular of claim;
b.That the Defendant Vessel Nand Hazira (IMO
Page 2 of 16
C/AS/2/2022 ORDER DATED: 26/07/2022
No.8845456) together with her hull,
engines, gears, tackles, bunkers machinery,
apparel, plant, furniture, fixtures,
appurtenances and paraphernalia, at present
lying at Hazira Port or wherever she is
within the territorial waters of India, be
arrested by a Warrant of Arrest of this
Hon'ble Court and the same be condemned in
respect of the Claim herein and be ordered
to be sold along with her hull, engines,
gears, tackles, bunkers machinery, apparel,
plant, furniture, fixtures, appurtenances
and paraphernalia and the net sale proceeds
thereof be ordered to be applied to the
satisfaction of the Plaintiff’s claim
herein and the cost of this Suit;
c.That pending the hearing and final disposal
of the suit this Hon’ble Court be pleased
to order and direct the arrest of the
Defendant Vessel Nand Hazira (IMO
No.8845456) along with her hull, engines,
gears, tackles, bunkers machinery, apparel,
plant, furnitures, fixtures, appurtenances
and paraphernalia, at present lying at
Hazira Port, or wherever she is within the
territorial waters of India and also
restrain her from beaching and breaking;
Page 3 of 16
C/AS/2/2022 ORDER DATED: 26/07/2022
d.That pending the hearing and final disposal of the suit this Hon’ble Court be pleased to direct to permit the Plaintiffs to sign off prior to contract period and further direct the concerned Authorities at Hazira Port to arrange for sign off, of the Plaintiff;e.for interim and ad-interim orders in terms of prayers (b), (c) and (d) above;f.for costs of this Suit;g.for such further and other reliefs as this Hon'ble Court may deem fit and proper in the nature and circumstances of the case.4.Learned advocate Ms. Paurami Sheth submitted that though by order dated 20.01.2022, this Court directed to arrest the Defendant Vessel in the present Suit, further directed that the order of arrest was not required to be effected as in the meantime, the Defendant Vessel was already sold and the sale proceeds of a sum of Rs. 2,35,00,000/- were directed to be retained in the Registry as per order dated 06.01.2022 in pursuance of the Application filed by Yes Bank, the Plaintiff of Admiralty Suit No. 16 of 2021.Page 4 of 16
C/AS/2/2022 ORDER DATED: 26/07/2022
5.Learned advocate Ms. Paurami Sheth submitted that the order dated 20.01.2022 was served to the Owner of the Defendant Vessel through email dated 21.01.2022 at 1.40 pm but the Defendant Vessel has till date not appeared through its erstwhile Owner or filed written statement. Even after the Defendant Vessel was sold and sale proceeds were deposited with the Registry, the erstwhile Owners have not entered appearance in any of the Suit filed against the Defendant Vessel.6.Learned advocate Ms. Paurami Sheth further submitted that even after the Defendant Vessel was sold, the Plaintiffs continued to serve on board the Defendant Vessel until new owner initiated the process to take over the possession of the Defendant Vessel on 15.02.2022 and they have been signed off on 14.02.2022.7.The Plaintiffs have then filed above Application under which, the Applicants/Original Plaintiffs seeks a summary judgment/decree against the Defendant Vessel under Order XIII-A read with Order VIII Rule X of the Code of Civil Procedure, 1908 (“CPC”) as amended by the Commercial Courts Act, 2015 read with Section 12 of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017.Page 5 of 16
C/AS/2/2022 ORDER DATED: 26/07/2022
8.It is submitted by the Plaintiffs/Applicants in the above Application that immediately after taking possession of the Defendant Vessel, the new Owner requested the Plaintiffs/Applicants to continue on Board the Vessel and accordingly paid them wages for the period from 15.02.2022 to 19.02.2022, that the Applicants are therefore entitled to wages for a sum of Rs. 66,833/calculated for the period from 01.11.2011 to 14.02.2022 i.e. date on which they served for the erstwhile Owner plus accrued interest till date of this Application of Rs.2,005/- payment and cost of litigation of Rs. 24,538/aggregating to Rs. 93,376/- with further interest at the rate of 12% per annum on Rs. 66,833/- from date of order till its realization as per Schedule or at the reasonable rate of the interest the Hon’ble Court may deem it fit, that even after the Defendant Vessel was sold and sale proceeds were deposited with the Registry, the Defendant Vessel has till date not appeared through its erstwhile Owner, or filed written statement and the dues of the Plaintiffs have been admitted inasmuch as they have not been denied, that the Plaintiffs have maritime lien consequently entitled to be paid first in priority and has prayed for the following reliefs in Civil Application No.1 of 2022 :-Page 6 of 16
C/AS/2/2022 ORDER DATED: 26/07/2022
pass an order and decree on admission in favour of the Plaintiffs and against the Defendant vessel Nand Hazira (IMO NO 8845456) and her owners, for the principal amount of INR 66,833.00 plus accrued interest till date of this Application of INR 2,005.00 payment and cost of litigation of INR 24,538.00 aggregating to INR 93,376.00 with further interest at the rate of 12% per annum on INR 66,833.00 from date of order till its realization as per Schedule and further passed decree that each Plaintiff is entitled for the amount mentioned against their respective name in the Schedule.9. The Schedule referred herein above and annexed to the Application of the salary due is reproduced herein under:
SCHEDULE OF SALARY DUE OF CREW OF NAND HAZIRA
N |
NAME |
RANK |
MONTHL |
NOV. |
DEC. |
JAN. |
FEB |
Total |
|---|---|---|---|---|---|---|---|---|
Y(INR) |
(INR) |
(INR) |
(INR) |
(INR) |
||||
1. |
SIDDHARTBAK |
FITTER |
10,000 |
4,333 |
10,000 |
10,000 |
5,000 |
29,333 |
2. |
DHAVALTANDEL |
OS |
15,000 |
-- |
15,000 |
15,000 |
7,500 |
37,500 |
10.This Court issued Notice on the said Application upon Simcement Private Limited,Page 7 of 16
C/AS/2/2022 ORDER DATED: 26/07/2022
Mumbai, the erstwhile Owner of the Defendant
Vessel vide order dated 06.07.2022 and directed
the Plaintiffs/Applicants to serve to Simcement
Private Limited, Mumbai through email. Learned
advocate Ms. Paurami Sheth submitted that in
pursuance of the said order, the notice is
served upon Simcement Private Limited, Mumbai
vide Email dated 18.07.2022 and tendered copy of
the said Email indicating.
11.Learned advocate Ms. Paurami Sheth submitted
that the averments made in the plaint and
Application with respect to their unpaid wages
have gone unchallenged inasmuch as the
registered Owner of the Defendant Vessel despite
service of the Arrest Warrant and Notice of
Application have not rebutted the same and
thereby admitted the dues of the Plaintiffs, the
Plaintiffs have maritime claim and maritime lien
under Section 4 (1) (0) and 4 (1) (w) read with
section 9 of the Admiralty (Jurisdiction and
Settlement of Maritime Claims) Act, 2017 (For
short "the Admiralty Act”) and consequently
entitled to be paid first in priority out of
sale Proceeds lying with the Registry of this
Court and hence the plaintiffs are therefore
required to be granted a decree on admission for
wages for principal amount of Rs. 66,833/- plus
accrued interest till date of this Application
Page 8 of 16
C/AS/2/2022 ORDER DATED: 26/07/2022
of Rs.2,005/- payment and cost of litigation of
Rs.24,538/- aggregating to Rs. 93,376/- with
further interest at the rate of 12% per annum on
Rs.66,833/-from date of order till its
realization as per Schedule or at the reasonable
rate of the interest the Hon’ble Court may deem
it fit from date of order till its realization
as per Schedule.
12. MS. Sheth, the learned advocate has also
invited attention of this Court to the following
documents annexed with the Plaint and above
Application:
a. The Employment Contracts (Page Nos.15 to 24 of the Plaint),b.Letter dated 03.01.2022 addressed to M/s. Tapti Waterways Private Limited Copy of chart showing outstanding Amount of wages (Page Nos.25 to 26 of the Plaint)c.reply dated 04.01.2022 of M/s. Tapti
Waterways Private Limited (Page No.27 of
the Plaint)
d.Article of Agreement for Employment of
Seafarers (Page Nos.7 to 10 of the
Application)
13. In support of her submissions, Ms. Sheth, the learned advocate relied on the following judgments:
Page 9 of 16
C/AS/2/2022 ORDER DATED: 26/07/2022
I Order dated 04.02.2021 passed by this Court
in case of Credit Suisse AG v. MV Sam Hawk, AS
No.17 of 2020.
II Order dated 12.07.2022 passed by this
Court in case of Yes Bank V. Nand Aparna AS No.
16 of 2021.
III Order passed in the case of Raj Shipping
Agencies vs. Barge Madhwa and Anr., 2020 SCC
Online Bom 651.
14.This Court considered the submissions advanced by Ms. Paurami Sheth, the learned advocate for the plaintiffs, having gone through the Plaint and affidavit-in-support, the Civil Application and the documents annexed with the Plaint and the Application. It is evident from Employment Contract, Letters of the Plaintiff addressed to M/s. Tapti Waterways Private Limited and reply of M/s. Tapti Waterways Private Limited annexed with the Plaint that the plaintiffs have been employed to serve on the Defendant Vessel through M/s. Tapti Waterways Private Limited and they were not paid wages from 01.11.2021. It is further evident from Article of Agreement for Employment of Seafarers that the plaintiffs served upon the defendant Vessel for erstwhilePage 10 of 16
C/AS/2/2022 ORDER DATED: 26/07/2022
Owner till 14.02.2022 and hence they are
entitled for the wages till that date. Thus
having considered the submissions thereto and
more particularly in view of the fact that the
Plaintiffs/Applicants herein have the claim
against the sale proceeds of the vessel lying
with this Court, I am of the view that the
prayer sought in the present Civil Application
for passing decree deserves to be allowed.
15.Further, it is evident from Employment Contract, Letters of the Plaintiff addressed to M/s. Tapti Waterways Private Limited and reply of M/s. Tapti Waterways Private Limited annexed with the Plaint that the plaintiffs have been employed to serve on the Defendant Vessel through M/s. Tapti Waterways Private Limited, they were not paid wages from 01.11.2021. It is also evident from Article of Agreement for Employment of Seafarers that the plaintiffs served upon the defendant Vessel for erstwhile Owner till 14.02.2022 and hence they are entitled for the wages till that date. Thus it is proved that the Plaintiffs served on the Defendant Vessel and have not been paid wages and their claim stand proved.16. Records indicate that Notices been duly served upon the Owner of the Defendant Vessel. This
Page 11 of 16
C/AS/2/2022 ORDER DATED: 26/07/2022
Court has directed that the Warrant of the order
of arrest not required to be effected on the
Defendant Vessel in view of her sale but the
Order was duly served upon the Owner of the
Defendant vessel. The Owner of the Defendant
Vessel has not appeared before this Court nor
filed Written Statement within stipulated time
as required under Order VIII Rule 10 of the CPC,
1908 as amended by the Commercial Courts Act,
2015. In view of above the liability of owner
can be said to be uncontroverted.
17. The Plaintiffs have initiated action in rem against the Defendant Vessel. The fundamental legal nature of an action in rem as distinct from its eventual object is that it is a proceeding against res. Thus, when a ship represents such res as is frequently the case, the action in rem is an action against the ship herself. The action is a remedy against the corpus of the offending ship. It is distinct from an action in personam which is a proceeding inter-partes founded on personal service on Defendant within jurisdiction, leading to a judgment against the person of the Defendant. In an action in rem no direct demand is made against the Owner of the res personally. The distinction between an action in rem and an action in personam is therefore a matter of
Page 12 of 16
C/AS/2/2022 ORDER DATED: 26/07/2022
substance and not of mere form.
18. The original Plaintiffs/Applicants have also filed the above Application under the provisions of Order XIII-A of the CPC, 1908 read with Section 12 of of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 and sought decree/summary Judgment against the sale proceeds of the Defendant Vessel.
19. Considering the submissions advanced by the learned advocate Ms. Paurami Sheth for the Plaintiffs, upon perusal of the documents annexed by the Plaintiffs in support of its claim and in view of the fact that despite service, the Registered/Erstwhile Owner has not entered appearance till date nor filed written Statement rebutting the averments made in the Suit remain unchallenged and thereby the dues of the Plaintiffs have been admitted. I am of the opinion that from the pleadings and materials on record, no purpose would be achieved by leading oral evidence and directing the Plaintiffs to undergo a full-fledged trial and the same would be grossly unfair and there is no compelling reason for the same especially when the erstwhile Registered Owner of the Defendant Vessel has admitted its liability by not rebutting the same and not filing the Written
Page 13 of 16
C/AS/2/2022 ORDER DATED: 26/07/2022
Statement. It is thus evident that Plaintiffs
have made out a case for grant of decree on non
rebuttal in their favour. It is therefore held
that the Plaintiffs have served as the Crew on
Board and their unpaid wages have maritime lien
on the Defendant vessel as per Section 9 of The
Admiralty Act, 2017.
20.Taking into consideration the provisions of Order VIII Rule 1 and Order VIII Rule 10 read with Order XIII-A of the CPC, 1908 undisputably the case of the present Plaintiffs and facts and circumstances of the present case, the Plaintiffs have sought prayers against the Defendant Vessel by seeking a decree only against the sale proceeds of the Defendant Vessel and, therefore, there is force in the submissions made by Ms. Sheth, the learned advocate appearing for the applicant.21. Even otherwise this Court is of the opinion that it may on its motion pass a decree in favour of the Plaintiff on the basis of the admission of the Plaintiffs’ Claim in its entirety by not rebutting the same or not filing Written Statement by the erstwhile Registered owners of the Defendant Vessel even though the Plaintiffs have not made application specifically under Order XII Rule 6 of the Code
Page 14 of 16
C/AS/2/2022 ORDER DATED: 26/07/2022
of Civil Procedure, 1908 while exercising the
powers of the Court under Section 151 of the
Code of Civil Procedure, 1908.
22.In view of the same, a case has also been made out for passing a judgment/decree in favour of the Plaintiffs on basis of the above submissions. In such circumstances the present suit is decreed as below:a)That there be an order and decree that the claim of the Plaintiffs in the Suit is secured in favour of the Plaintiffs by a valid and subsisting maritime lien over the sale proceeds of the Defendant Vessel NAND Hazira ((IMO NO 8845456), lying with the Registry of this Court.b)That there be an order and a decree against the sale proceeds of the Defendant Vessel Nand Hazira (IMO NO 8845456) in favour of the Plaintiffs together with further interest thereon at the rate of 12% per annum from the due date of payment of wages till realization.c)No other priority except the aforesaid are adjudicated by this Court under Section 9 read with Section 10 of the Admiralty Act, 2017.Page 15 of 16
C/AS/2/2022 ORDER DATED: 26/07/2022
23. The suit stands decreed to the aforesaid extent only. The Civil Application No. 1 of 2022 is disposed of in the aforesaid terms.
There shall be no order as to further costs.
(VAIBHAVI D. NANAVATI,J)
Pallavi
Page 16 of 16
3 issues framed by the court
Whether a decree for unpaid seafarer wages should be granted on admission via an in rem action against the sale proceeds of a vessel.
Whether maritime lien secures priority payment to seafarers over the sale proceeds of the vessel.
Whether the court can pass a decree pursuant to Order XIII-A of CPC and Section 12 of the Admiralty Act on non-rebuttal by the owner.
Colour shows how this judgement treated each authority
Credit Suisse AG v. MV Sam HawkReferred¶64
Credit Suisse AG v. MV Sam Hawk, AS No.17 of 2020
Yes Bank V. Nand AparnaReferred¶65
Yes Bank V. Nand Aparna AS No. 16 of 2021
Raj Shipping Agencies vs. Barge Madhwa and Anr.Referred¶66
Raj Shipping Agencies vs. Barge Madhwa and Anr., 2020 SCC Online Bom 651 · Who else cites this
4 provisions across 2 enactments
SIDDHART BAK
NAND HAZIRA IMO 8845456
VAIBHAVI D. NANAVATI
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court