1991 PLP 1465 (MLD)

This order will dispose of all the three applications being C.MAs. 107 of 1994,108 of 1994 and 109 of 1994. According to averments made in the plaint, the plaintiffs were consignee of 3303.9409 metric tons of raw jute shipped on board the defendant vessel in July, 1992 from Bangladesh ports under four bills of lading for delivery at Abidjan in Ivory Coast. The vessel was expected to arrive at Abidjan in about 45 days but it did not and the plaintiff also received no intimation of delay. It is alleged in para. 6 of the plaint that, in effect the defendant vessel, just disappeared without a trace. All efforts by the plaintiffs to find out its whereabouts were in vain. It is further alleged that, recently the plaintiff learnt by chance that the defendant had surreptitiously changed its name from "ONYX" to "PANIKOS" and was approaching Karachi to discharge its cargo of jute owned by the plaintiff which the defendant and/or its owners had misappropriated and sold to other parties in Karachi. On these allegations, this suit in rein was filed claiming US $ 1,526,948/98 being the value of the said jute consignments and loss due to delay in delivery. Alongwith the plaint these applications were also filed of these, in C.MA. 107 of 1994, which is under Order

39. Rules, 1 and 6 read with section 151, C.P.C. the prayer is for restraining the defendant from giving delivery of the disputed cargo of 3303.0409 M. Tons to any one except the plaintiff and for taking over of the same by the Court and selling it, C.MA. 108 of 1994 under Order 11, Rule 12 read with section 151, C.P.C. seeks the production of certain documents and C.MA.109 of 1994 under Rule 731 of the High Court Rules prays for restraining the defendant vessel from leaving Karachi without furnishing the requisite security. On 19-1-1994, an ad interim order for the arrest of the vessel was obtained from a learned Single Judge. In so far as the shipment of the jute consignment from Bangladesh is concerned that is not disputed by the defendants, but plaintiffs' claim against the defendant is vehemently refuted. From the affidavits and documents filed on behalf of the defendants it would seem that after leaving Bangladesh, while the defendant vessel was berthed at Colombo it was arrested by the High Court of Sri Lanka in the exercise of its Admiralty Jurisdiction in action in Rein No.26/92 brought by one Euro Finance Enterprises SA against the defendant vessel in respect of a mortgage. The present plaintiffs were aware of the said Admiralty proceedings at Colombo and participated therein as the "3rd Intervenient Petitioner". It was in the said action in rein that the defendant vessel was ultimately sold under Court's order and Euro Finance Enterprises, the plaintiff in that action, as the highest bidder, purchased the same and later sold to Maritime Cooperative (No.1) Limited, the present owners, who changed the name of the vessel from "ONYX" to "PANIKOS". Amongst the document relied upon by the defendant are orders of the Colombo High Court passed in the aforesaid proceedings copies of which have been filed in this ease and at the hearing Mr. Akram Zuberi produced for examination certified copies. One of the orders is dated 29-9-1993 whereby the learned Judge, with the consent of the plaintiff (in that case), the defendant and 3rd intervenor (plaintiff in the present action) granted the 3rd intervenor further time upto 15-11-1993 to remove its cargo from the ship on its agreeing to pay demurrage and expenses in respect of the extended time, at the agreed rate of US $ 3,875 per day. The relevant portion of this order is to the following effect:-- "I allow this application for the plaintiff-petitioner to withdraw the sum in Sri Lankan currency 3,224,100 which has been deposited as demurrage for the period 9-8-1993 to 30-8-1993 by the 1st and 2nd Intervenient-Petitioner Mr. Mano Devasagayam is heard in regard to another collateral matter. At this stage Mr. Mano Devasagayam,. appearing for the 3rd Intervenient-Petitioner states that due to the present weather the 3rd Intervenient-petitioner requires further time to unload and discharge its' consignment of jute which is still laden on m.v. "ONYX". He, on behalf of his clients agrees to pay all demurrage and expenses incurred in the maintenance and the operation of the ship from 22-9-93 till actual removal of the cargo. (The Plaintiff-Petitioner and the 3rd Intervenient-petitioner agree to a figure of US $ 3,875 per day as demurrage). Of consent, between the plaintiff-petitioner and the defendant and the 3rd Intervenient-petitioner, Intervenient-petitioner agrees to remove its' cargo definitely on or before the 15th November, 1993. It is agreed between all three parties, who are represented today before this Court, that if the 3rd intervenient-petitioner for whatever cause or reason fails to unload and discharge its' consignment of cargo now laden on m.v. ONYX, at its expenses and costs on or before 15-11-1993, the said consignment of jute or any part of it would be treated res derelicta (abandoned property) with the requisite intention. Therefore, the prospective purchaser who has paid for this ship is entitled to appropriate the said consignment of jute or any part of it s without any payment as abandoned property. On the aforesaid terms and conditions the 3rd intervenient-petitioner is granted time till 15th November, 1993 to remove its consignment of jute laden on m.v. ONYX. Call case on 16-11-1993 to ascertain whether 3rd intervenient petitioner has complied with the terms and conditions of the settlement which has been recorded in relation to this consignment of jute and agreed by all parties who are represented in Court by their respective Attorney-at law." It appears that the present plaintiffs having failed to remove the cargo from the ship by 15-11-1993 or even to deposit the agreed amount of demurrage/expenses, applied for further extension of time, which application was dismissed by the Court by Order, dated 16-11-1993. It also appears from this order that the present plaintiffs had been involved in the said action in rem No.26/92 before the High Court at Colombo since December, 1992 and therefore, had full knowledge of that case and defendant's presence in Colombo from December, 1992, if not earlier. It would be beneficial to reproduce here relevant portions from the said order:-- "At this stage the Court in entertaining Mr. Mano Devasagayam's application poses the issue whether the third intervenient-petitioner has deposited the demurrage which has already accrued and which was due and payable in terms of the settlement arrived at on 29th September, 1993. In reply to that query Mr. Devasagayam states that the third intervenient-petitioner has not deposited the accrued demurrage upto date. He admits that there has been a default on the part of the third intervenient-petitioner in regard to the payment of the demurrage which has already accrued due. At this stage, I request Mr. Nithiyanandan Murugesu to make his submissions on the application made on behalf of the third intervenient-petitioner. Mr. N. Murugesu objects to the application and states that the third intervenient-petitioner has not disclosed its bona fides in taking steps to abide by the settlement which was reached before this Court on 29th September, 1993. He submits that the third intervenient petitioner has not paid the demurrage which has already accrued due which he steadfastly promised to pay to the plaintiff. Mr. Murugesu states that not a single cent has been so far paid in respect of the accrued demurrage." . Mr. Poobalasingam submits that the original application for the removal and discharge of the consignment of the jute belonging to the third intervenient-petitioner was made as far back as December, 1992. . "The third intervenient-petitioner has been given ample opportunities by this Court to remove its consignment of jute which is laden on Motor Vessel ONYX. . Thereafter, on the 29th September, 1993 an order was made of consent of parties and in terms of that order if the third intervenient petitioner's jute was not removed on or before the 15th November, 1993, it was agreed by all parties that the jute would be regarded as res derelicta-abandoned property and that the third intervenient petitioner would lose all rights in the jute and that the highest bidder is entitled to appropriate the jute and take away the ship by paying the balance consideration due on the auction sale. Therefore, in terms of the consent order and the admitted failure of the third intervenient petitioner to remove the cargo before the 15th November, 1993, this cargo has become res derelicta and it could be appropriated by the highest bidder without the need to pay any consideration for it. The accumulated and unpaid share of the demurrage and the share of the expenses of maintenance and operation of the ships payable by the third intervenient-petitioner and removal expenses of the jute, would now outweigh and exceed the value of this petitioner's deteriorated and decayed portion of the consignment of jute laden on m.v. "ONYX". . "In the circumstances, I hold that there are no equities, no merits, not any mitigatory facts which could support and bolster the present application of the third intervenient-petitioner. This Court is bound to enforce and execute the consent order and the terms of settlement entered into voluntarily by all parties before this Court on 29-9-1993. The jute in question is in a deteriorated condition and due to the exposure to moisture and water, there is every likelihood of chemical reaction setting in and leading to combustion which would engulf in flames not only the jute but even the ship in a conflagration. This is a disastrous and detrimental consequence which this Court of necessity ought to avoid and ought not to permit to take place in any eventuality. The ship is presently anchored in the outer Harbour and there are numerous complaints that the outer Harbour and approach to and route to the "Port of Colombo is impeded and congested thereby posing obstacles and impediments to the entry of ships into the Port of Colombo. This vessel has been arrested and has not been sold under Court order." ".... All these steps and procedure in the case are being impeded and obstructed by the failure of the third intervenient-petitioner to remove its consignment of jute. In the circumstances, this Court has made a final and conclusive order in pursuance of consent of all parties that if the jute is not removed by the 15th November, 1993 it would be regarded as res derelicta-abandoned property with the requisite animus state of mind and that it could be appropriated by the highest bidder, who would then be in a position to take unencumbered delivery of the motor vessel after paying overdue demurrage and incurred expenses and satisfying statutory duties and claims. For the aforesaid reasons, I refuse the present belated application of the third intervenient-petitioner. I hold that the consignment of jute laden on motor vessel ONYX has become abandoned property as res derelicta and that the highest bidder is entitled to appropriate the jute and thereby take effective and unencumbered possession of the motor vessel and at the same time simultaneously deposit the balance consideration to the High Court Account." At the hearing the learned counsel for the present plaintiff admitted the said admiralty proceedings before the Colombo High Court as well as participation therein as one of the intervenors, but avoided to admit the said orders filed by the defendants. It is, however, pertinent that despite ample time the plaintiffs failed to produce any document to controvert these. Further, the plaintiffs have themselves produced documents showing that in the said proceedings they had, on Court's order, furnished bank guarantee in the sum of US $63;509 to enable them remove their cargo from the defendant ship. It is intriguing that here the plaintiffs have not said a word about the said admiralty case before the Colombo High Court in which the present plaintiff too was very much involved and their right to the cargo of the said raw jute had been determined. It is, therefore, obvious that the plaintiffs not only intentionally withheld from the Court vital information going to the root of this case but also resorted to gross misstatement when they stated in. para 6 of the plaint that, "In effect the defendant vessel just disappeared without a trace. All efforts by the plaintiffs to find out its whereabouts were in vain." It is apparent from the Colombo High Courts' orders dated 29-9-1993 and 16-11-1993 that by consent the present plaintiffs were granted time upto 15-11-1993 for removal of their cargo from the defendant ship on the condition that they deposit the amount at the agreed rate US $ 3,875 per day from 22-9-1993 till actual removal of the cargo. However, the present plaintiffs failed to fulfil their obligation regarding payment with the result the said cargo could not be removed from the ship and as such, in accordance with the consent order was treated as abandoned property (res derelicta) and handed over to the purchaser of the vessel. Thus the right of the present plaintiffs in the said cargo of jute laden on the vessel "ONYX" stood finally determined by the Colombo High Court in the said admiralty proceedings. 'Had it not been for the blatant misstatements in the plaint and the withholding of material facts from the Court, the plaintiffs, perhaps, would not have been able to obtain ad interim order in this case. Mr. Muhammad Akram Zuberi, learned counsel for the defendant, also challenged the very maintainability of the present admiralty suit. He stated that by virtue of section 4(4) of the Admiralty Jurisdiction of High Courts Ordinance, 1980 an action in rem would lie only if, the same company which owned the vessel at the time the cause of action arose, still held the majority shares therein when the action was brought. But in the present case, in July, 1992, when the cause of action admittedly arose, as asserted in para. 9 of the plaint, the ship was owned by Merrywood Navigation Company Limited while at the time the present admiralty suit was instituted the vessel had already changed hands twice. It was first sold to Euro Finance under the orders of the Colombo High Court in action in rem No.26/92 as stated above and then it was sold to Maritime Cooperative the present owners. As such, he stated, that the original owners no longer held majority shares therein. Though the contention is not without force I do not intend to go into that question at this stage. In the face of the facts as brought out by the defendant, Mr. Shaiq Usmani, the learned counsel for the plaintiffs, sought support to his case from alleged inconsistencies in the orders passed by the Colombo High Court and the documents brought on record on behalf of the defendant. He contended that by the order, dated 29-9-1993 the present plaintiff was allowed time to remove the cargo from the ship by 15-11-1993, but by the subsequent order made on 16-11-1993 the Court handed over the cargo to Euro Finance, the purchaser of the vessel, without consideration treating it to be abandoned cargo although that was not so. In this regard he placed reliance on the case of Kleinworth Beson Limited v. Sharkate Sahami Sakht reported in (1984) (2) Lloyd's Law Reports 341 where it has been observed that. "The more I have thought about this problem the more convinced I am that it is desirable to maintain a uniform practice that when a ship owner is unable to perform a contract of carriage the owner of cargo laden in his ship is entitled to take his cargo out of that ship at his own expenses or abandon the cargo. If it is necessary for the Admiralty Marshal to supervise the discharge of the cargo he is, in my judgment, entitled to recover the cost of discharging the cargo from the owners of that cargo in proportion \to their interests. If the cargo-owners abandon their cargo the Admiralty Marshal may sell it and recover its expenses from the proceeds of sale." His contention was that even if the plaintiff had failed to remove the cargo it should have been removed from the ship by the Admiralty Marshal and. then if the plaintiff did not pay for the cost of such removal it could be treated as abandoned and not before that. The contention has no force for, in the consent order, dated 29-9-1993, the present plaintiff had themselves agreed to the cargo being treated as abandoned in case they failed to remove the same within the specified period. ' His next contention was that, the Bill of Sale of defendant ship issued by the Registrar, High Court, Colombo, in favour of Euro Finance was dated 9th day of December, 1993, whereas it would appear from Protocol of Delivery and Acceptance that Euro Finance sold the same to Maritime Cooperative and handed over possession thereof to the purchaser on 10th December, 1993, barely a day after having purchased the same in the sale by the Colombo High Court. The hasty transfer, according to the counsel, betrayed collusion between the parties. This objection too has no force for it is obvious from the Bill of Sale issued by the registrar that the sale had been finalized by the Court on 3-12-1993 and in fact, as is apparent from the public notice, issued on the orders of the Colombo High Court, the sale of the ship was held on 6-8-1993. Therefore, the agreement for the sale of the ship entered into between Euro Finance and Maritime Cooperative on 7-12-1993 could hardly be considered hasty. It appears from the Colombo High Court's order, dated 16-11-1993 that the amount of demurrage and other expenses on account of present plaintiff's failure to remove the cargo exceeded the value of the cargo and this, apparently, was the reason that they decided to abandon the goods. These liabilities according to the said order were to be borne by the purchasers and as such it can also not be said that the purchasers were transferred the jute cargo without consideration. The result of the above discussion is that, in my view, prima facie, the plaintiffs have no subsisting right in the disputed cargo of jute. Plaintiff's rights and interests in the cargo were finally determined in the 'said action in rem by the Colombo High Court, which is a Court of competent jurisdiction. Accordingly, I find no merit in C.M.A. No.107 of 1994 under Order 39, Rules 1 and 6, C.P.C. and C.MA.109 of 1994 under Rule 731 of the High Court Rules and dismiss these. By reason of dismissal of the above two applications as also in view of the admitted position, C.M.A. No.108 of 1994 has become infructuous and is too dismissed. The interim order passed on 19-1-1994 and extended from time to time, restraining the defendant ship from sailing out of Karachi Port, is recalled/vacated and the defendant will be at liberty to sail out of Karachi Port. The office is directed to send such intimation to the Collector of Customs Harbour Master and Dock Master of Karachi Port Trust. Any opinion expressed in this order or observation made is tentative in nature and will not have any effect on the merit of the case. A.A./F-229/K Order accordingly,