1990 PLP 579 (CLC)

This is an application under Order 1, Rule 10 read with Section 151 C.P.C. whereby Intervenor Afrah Shipping Company P.O. Box No. 4280, Sharjah, U.A.E. have prayed that they may be joined as defendants in this admiralty suit.

2. In the affidavit it is alleged by Shahab ' Mazhar Oureshi, partner of the Intervenor, that vessel m.v. Kashmir was purchased by the Intervenor on 26‑5‑1988. Since then all expenses pertaining thereto have been borne by the Intervenor and the losses resulting from the arrest of the said vessel are also being borne by the Intervenor. Hence it is necessary and proper that they may be joined as defendant in this suit.

3. I have heard Mr. Khalid M. Ishaque, Advocate for the Applicant/ Intervenor and Mr.M.H. Kazmi, Advocate for plaintiff, who has vehemently opposed the application.

4. Brief facts giving rise to this application are that a suit in rem was instituted against m.v. Kashmir and its owner Swat Shipping Corporation. On the order of‑ the then Chief Justice m.v. Kashmir was arrested on 14‑5‑1988 at Karachi. The vessel escaped arrest surreptitiously. Again it touched Karachi Port with changed name m.v. Naran. An application for its arrest was repeated and it was rearrested on 23‑7‑1988. Afrah Shipping Company filed an application under Rule 743 of Sind Chief Court Rules read with section 151 C.P.C. and contended that m.v. Kashmir was not lawfully arrested on 14‑5‑1988 as it was not anchored within the jurisdiction of this Court and thereafter it had sailed away from outside Pakistan. This ship was sold by its owner Swat Shipping Corporation to Afrah Shipping Company on 26‑5‑1988 whereafter it changed its name as m.v. Naran. It was contended by Afrah Shipping Co. that due to the change of the ownership no action in rem could lie against m.v. Naran when it arrived second time at Karachi. Yet it was rearrested on 23‑7‑1988. The application of the Intervenor was dismissed by this Court by a detailed order reported in P L D 1988 Karachi 57 Kuwait Flour Mills Company v. m.v. Kashmir. An appeal was Filed against the said order by the Intervenor and the same was also dismissed on 18‑9‑1989. 5 .Mr. M.H. Kazmi, Advocate, who appeared for the plaintiff contended that any sale of the ship subsequent to the service of writ of arrest is void and of no legal consequence and suit is rem is maintainable against the same. Since the sale was void therefore the Intervenor did not get any right or interest whatsoever in the ship. Hence they are neither necessary nor proper party in this suit. He has relied upon (i) 1985 SCMR 714, Pakistan Banking Council v. Ali Maohtaram Naqvi, (ii) PLD 1968 Lahore 1076 Jamilur Rehman v. Muhammad Asghar, (iii) AIR 1926 Mad. 836 Vaithilinga Sannidhi Audhina Karthar Tiruvaduthurai Adhinam v. Sadasiva lyer and others and (iv) 1979 C L C 95 Muhammad Ramzan v. Nazir Ahmed. ‑6. 1 have gone through all these rulings. Case of Pakistan Banking Council relates to a matter where the person sought to be impleaded was neither a necessary nor a proper party. It was therefore held that such person should not be joined just for the sake of convenience and the record of the Courts should not be loaded with parties having no interest in the suit which is not so before us. In Jamilur Rahman's case it was held that the question of impleading a party or not is a matter of procedure, pure and simple and it can be reviewed under section 151, C.P.C. It was further held that provisions of Order XLI, Rule 2 were not applicable in such cases and cannot be operated as bar for striking out the name of a party found to be improperly impleaded. The plaintiff had dominus litis and no person should be joined as a party to a suit against his wishes as far as possible. This ruling also does not apply to the present case because it relates to a proper party and not to a necessary party and it was held into that paramount consideration in impleading proper parties was avoidance of multiplicity of suits. Ruling in Vaithilinga Sannidhi Audhina Karthar Tiruvaduthurai Adhinam also does not apply to this case because it also relates to a permissible or proper party and not to a necessary party. It was held therein that when a third person who applies to be joined is only a permissible party, then on principle, his addition as a party cannot generally be ordered when it is opposed by the plaintiff. Ruling in the case of Muhammad Ramzan also does not apply to the present case because it is held therein that no new controversy can be introduced to change character of the suit but the Court is to settle all questions involved in the suit. In this suit request for being implcaded as a party was allowed and it was held that being owner of the factory he was interested in the litigation..

7. The contention of Mr. Khalid M. Ishaque was that section 64, C.P.C. no doubt makes private transfer of an attached property void but qualifies it by words "as against all claims enforceble under the attachment". Hence his contention is that the transfer is voidable at the instance of the Decree‑Holder in whose favour the attachment has been made or voidable at the instance of the Judgment‑Debtor if he satisfies the claim for which the attachment is made. In other words he argued that the transfer is not void so far as the rest of the world is concerned and if the Decree‑Holder consents to the release of the property from attachment or the Judgment‑Debtor satisfies the decree under which attachment is made and the Court releases the property from attachment, the interest of the transferee which was acquired by alienation during the attachment becomes valid and effective. I find myself in agreement with the contention of i Ir. Khalid M. Ishaque. Transfers in violation of the order of attachment are not void. Such transfers of the attached property are voidable at the instance of the Decree‑Holder for whose benefit the property was attached. Moreover, the transfer is void only so far as it is contrary to the interest of the Decree‑Holder. It means that it is effective for the amount in excess of the amount for which the attachment was made. Reference in this connection was made to A.1.R. 1965 All‑ 135 Maheshwari Khltan Sugar Mills v. Ishwari Khctan, wherein it was held as follows:‑‑ "There does exist a conflict in section 64 and Order XXI, Rule 46 C.P.C: but when we try to harmonise the two provisions, it shall have to be held that a private transfer of shares in a company after the attachment thereof is not wholly void. It is void as against all claims enforceable under the attachment and not otherwise. A property under attachment may not eventually be auctioned or transferred by or under the directions of the Court. After the debt is discharged or the decretal amount is paid up in full, the attachment can be withdrawn and the holder of the shares, whether original or transferee, regains all his rights and can deal with them in any manner he likes. A person can purchase the shares or properties under attachment with the hope that if the attachment is eventually withdrawn he would become complete owner thereof. In other words, therefore, transfer of shares under attachment is void if it becomes necessary to auction or otherwise transfer the attached shares for enforcement of the claims; but if the attachment is eventually withdrawn the transfer though made during the continuance of the attachment would be perfectly valid conferring a right in the vendee. (26) Section 64 C.P.C. has been incorporated to safeguared the interest of creditors; it is not meant to deprive the owner of his interest in the property under attachment. In case the Legislature had the intention to declare the transfer to be completely void, the words "as against all claims enforceable under the attachment" would not have been incorporated in the section. Further, the Legislature would have drafted S.64, C.P.C. on the lines of the Provincial Insolvency Act, and other enactments, by declaring that on attachment the properties shall vest in the Court or the Receiver, as the case may be. When the intention of the Legislature was not to divest the owner of all his interests in the property, we can construe OXXI, R.46, keeping this intention in mind. In other words, a transfer in disregard of the prohibitory order under OXXI, R. 46 is not illegal, though it is void as against all claims enforceable under the attachment.

8. Mr. Khalid M. Ishaque pointed out that the claim of the plaintiff for which this ship was arrested was for Rs. 1,19,63,549.17. Since the delivery of the goods has already been taken by the plaintiff, he will have still to decrease the claim. The ship is worth much more than this amount. Afrah Shipping Company has therefore admittedly an interest in the ship though subject to the removal of attachment i.e. after the payment of above amount. Hence it is a necessary party to this suit.

9. The contention of Mr. M.H. Kazmi, as I could percieve, was that a transfer or alienation of property made during its attachment was voidable as shown above so for as other attached properties were concerned, but the same was not true of a transfer or alienation of a ship made after a writ of arrest was served upon it. The law under the Admiralty Jurisdiction according to him was different from the law under the ordinary jurisdiction. He could not cite any provisions of Colonial Courts of Admiralty Act 1890 to that effect. Rule 730 and Rule 773 of Sind Chief Court (Original Side) Rules are framed under Colonial Courts of Admiralty Act 1890 which read as under are to the contrary:‑ "

730. A suit shall be commenced by a plaint drawn up, subscribed and verified according to the provisions of the Code and the practice throughout shall, as far as is compatible with these rules, be that laid down in the Code.

773. The forms used in the Admiralty Division of the Supreme Court in England under the rules of the Supreme Court Act, 1883, shall be followed as nearly as the procedure laid down in the Code and by these rules and the circumstances of each case will allow."

10. Mr. M.H. Kazmi had referred to the case of Monica S, reported in (1967) 3 A.E.R. 740 where it was held that alienation after issuance of writ of arrest is void and would not defeat a right of action in rem : He also relied upon the case of Kuwait Flour Mills v. m.v. Kashmir reported in P L D 1989 Karachi 57 where relying upon the case of Monica S, I have held that sale of ship by defendant to Intervenor after arrest or attachment would be illegal and void.

11. The contention of Mr. M.H. Kazmi is not correct. No doubt it is held in the case of, Monica S, as well as in the case of Kuwait Flour Mills v. m.v. Kashmir that the alienation during the attachment or arrest is void but these rulings do not say that such transfer is void ab initio and for all times i.e. even after the ship is released from the arrest and the claim for which it was arrested has been satisfied. These rulings have to be read subject to section 64, C.P.C. Hence I am of the clear view that transfer of a ship made during its arrest is not different B from the alienation of a property made during its attachment and such alienation is voidable only at the instance of the Decree‑Holder and to the extent of the interest of Decree‑Holder for whose benefit the attachment is made and not beyond that.

12. Under these circumstances I grant C .M .A .No. 1345/89 and allow Afrah Shipping Company to be joined as a defendant in this suit. Its name shall beI added in the list of defendants by the office with red ink. M.B.A./K‑180/K Order accordingly.