P L D 1988 Karachi 390 (PLP)

Both these wits have been flied by the plaintiffs for recovery of repair charges and necessaries. In both the suits the plaintiffs and defendant No :are the same but the vessels involved are different. Suit No.522l87 relates to m.v. Zohra‑1 (defendant No.1) and in suit No.523/87relates to m,v Zohra III . It has been cited as defendant No.l. Both the vessels are in possession of the plaintiffs who are claiming possessory lien for their claim for repairs and expenses. The plaintiffs have filed application under 8.731 Sind Chief Court Rules (O.S) for arrest of the vessel. Briefly the facts are that on 27‑3‑1986 the, plaintiffs entered into a time charter‑party agreement with the defendant No 2 in respect of m.v. Zohra‑I and m.v. Zohra‑111 for hiring them for three years from the date of delivery for cooperative fishing business in the Waters of Pakistan. The plaintiffs were to pay US$ 180,000 per year. The delivery was to be made within 60 days of the agreement completely repaired under the responsibility of the defendant No.2. The vessels were to be fit for fishing operation. The charter party was to be effective after approval of the Government of Republic of Korea and National Finance Development Corporation Karachi, the defendant No.3 which has a charge for its claim. On 1‑6‑1986 the plaintiffs and defendant No.2 entered into an agreement under which the plaintiffs were to bear all expenses of repairs on behalf of the defendant No.2. Pursuant to this agreement the plaintiffs carried out extensive repairs and in respect of ZOHRA‑I spent Rs,637,871 and on ZOHRA‑III, Rs,6,056,733.,90 As the defendant No 2 had taken a loan from defendant No.3 without its no objection the vessel could not be taken to high seas. Under an arrangement the plaintiffs advanced Rs.31,00,000 to the defendant No,2 for obtaining a pay order. The same was paid to the defendant No.3 but no objection certificate was not issued. The plaintiffs served notice on the defendant 130.2 and during correspondence negotiation for purchase of both the vessels were held but did not conclude. The plaintiffs came to know that the defendant No 2 is negotiating sale of the vessel. They claim possessory lien for their claim for repairs, necessaries supplied and services rendered and filed this suit. An application under Rule 731 Sind Chief Court Rules (O.S.) was filed which has been opposed by the defendants 1 and

2. The defendant No.2 has pleaded that Metal Agencies had purchased four vessels including the vessels in suit from a firm of Republic of Korea through its Consul General. After the vessels were transferred the defendant 10.2 purchased the same. For payment of balance amount the defendant 10.2 obtained loan from defendant respondent N0.3 and paid to Deputy Consul General who failed to deliver the said vessels in seaworthy condition. After some time the Government of Republic of Korea agreed and transferred its obligation to deliver seaworthy vessels to the plaintiffs. It was admitted that defendant No.2 is the owner of defendant Rio

1. By an amendment in agreement dated 27‑3‑1986 the plaintiffs were solely responsible far the repairs. Again by an agreement tinted 1 4‑5‑1986 it was provided that after the delivery of vessel the repairs shall be the sole responsibility of the plaintiffs. It has been stated that the plaintiffs made an offer to purchase the vessels for Rs.11,000,000 which was accepted by the defendant No.2. The plaintiff however, committed breach and suit for specific performance of the contract has been filed. Mr. Ahsan Zahir Rizvi, Advocate for the defendant No.2 contended that as the vessel has been sold to the plaintiffs the beneficial ownership in the vessel has been transferred to them defendant No.l cannot be arrested. This contention has been advanced taking into consideration the provision, of, section 4 of the Admiralty Jurisdiction of High Court Ordinance, 1980. Mr. Mirza the scathed counsel for the plaintiffs, however, amended that the: agreement for sale was never concluded, therefore, question of transfer of beneficial interest or any interest does not arise. The defendant No 2 It attics filed a suit for specific performance of the agreement which is pending. The contention of the parties depends on interpretation of various documents and at this stage particularly as the defendant No.2 has filed a suit, as stated above, it would be neither appropriate nor proper to give any conclusive finding on the existence of the contract. Therefore, for purposes of this application I will consider whether any prima facie case has been made out. There is no sale agreement but it is to be spelt out from the correspondence. The plaintiffs had agreed to purchase both the vessels for Rs.11 M but so far other conditions which were also material were not agreed upon and parties were ‑negotiating. In his letter dated 25‑5‑1987 the Advocate for the defendant No.2 stated as follows: "Your clients must appreciate that the vessels are registered jointly in the names of our clients and N D . F . C . Till such time that N.D.F.C. gives its NO Objection to the sale of the vessels to ‑dour clients, our clients cannot enter into any agreement with your clients with regard to the sale of the said vessels." This clearly demonstrates that no sale could be effected without the consent of defendant No.3. No such consent seems to have been obtained. Prima facie it seems that the property in goods had not passed to the plaintiffs as the contract was only at the negotiating stage. In these circumstances the question of transfer of beneficial ownership to the plaintiffs does not arise. Mr. Rizvi next contended that as the claim of the plaintiffs cannot be entertained in an action in rem the vessel cannot be arrested under Rule 731, Sind Chief Court Rules (O.S.). The plaintiffs have claimed charges for repairs, necessaries supplied and services rendered to the vessel. The significant aspect is that the plaintiffs have a possessory lien. This question should not detain us as the plaintiffs nave a possessory lien over the vessel which is m their control and possession. Even if the vessel is not arrested, the plaintiffs cannot be deprived of their possessory lien till such time their dues are paid. In Halsbury's Laws of England 4th Edition Volume 43 para. 1141 it has been observed: "A possessory lien is the right of a person in whose possession a ship or her appurtenances is or are to retain possession of her or them until payment or discharge of some debt or obligation due to that person in respect thereof. Such a right I belongs to one who repairs, alters or otherwise bestows Labour or skill upon a ship, and retains possession of her. There by no power to realise the security, even though expenses and inconveniences must be incurred in keeping it; Possessory lien takes priority over all claims arising after the ship has been taken into possession but will be subordinate to those liens which were created earlier. Such lien holder has no power to realizes the security or sell the ship but he can hold possession till his dues are paid. If the Court dispossesses him in exercise of Admiralty Jurisdiction and the vessel is sold, "then out of the sale proceeds he will be paid his dues subject to the rules to priorities." Mr. Mirza and Mr. Rizvi have agreed that if the vessel remains in possession of the plaintiffs or is arrested, unless it is maintained it will deteriorate. They also agree that in the interest of both the[ parties the vessel may be sold under the supervision of the Court and the sale proceeds may remain deposited in Court. Even on these C agreed terms at this stage it will be necessary to protect the possessory lien of the plaintiffs. The defendant No.l is, therefore, ordered to be sold by the Nazir subject to the lien of the plaintiffs on the sale proceeds which shall remain deposited in the Court. A.A. /P‑52/K Order accordingly.