1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ADMIRALTY AND VICE-ADMIRALTY JURISDICTION APPEAL NO. 181 OF 2010 IN NOTICE OF MOTION NO. 739 OF 2010 IN ADMIRALTY SUIT (LODGING) NO. 3263 OF 2009 CHEMOIL ADANI PVT. LTD. ) a Company incorporated under the Companies ) Act, 1956, having its Registered Office at Adani ) House, Near Mithakali Circle, Navrangpura ) Ahmedabad 380 009 ig ) Appellant (Org. Plaintiff) Versus 1) m.v. HANSA SONDERBURG ) (and her owners and all other persons ) concerned and/or interested in her) IMO ) Number 9155389, flying a Liberian Flag, ) together with her hull, tackle, engines, ) machinery, boats, bunkers, equipment, ) paraphernalia and all other appurtenances ) presently in the port and harbour of Mumbai) within the territorial waters of India and ) within the Admiralty & Vice Admiralty ) Jurisdiction of this Honourable Court. ) 2) HANSA SONDERBURG SHIPPING CORP. ) a company organized under the laws of , ) Germany, having its principal place of ) business at c/o Leonhardt & Blumberg ) Reederei GmbH & Co. KG. Neumuhlen ) [SECTION], 22763 Hamburg, GERMANY. ) Downloaded on - 09/06/20[SECTION] 15:53:33 2 3) HULL & HATCH LOGISTICS LLC ) a company organized under the laws of the ) United Arab Emirates, having its Registered ) Office at P.O. Box No.49653 Dubai ) UNITED ARAB EMIRATES. ) Respondents (Org.Defendants) Mr. [ENTITY] a/w Mr.[ENTITY] i/b [ENTITY] for the Appellant. Mr. [ENTITY], Senior Advocate, with Mr.[ENTITY], Ms. [ENTITY] and Mr.[ENTITY] i/b M/s.Gordhandas & Fozdar & Co. for Respondent Nos.1 and 2. CORAM : ANIL R. DAVE, C.J. AND ig [ENTITY], J. JUDGMENT RESERVED ON : 19TH APRIL 2010 JUDGMENT PRONOUNCED ON : 27THAPRIL, 2010 JUDGMENT (Per [ENTITY], J.)
Appeal admitted.
2. The respondent Nos.1 and 2 waive service. None appears for respondent No.3 though served. In any event, the contesting respondents are respondent Nos.1 and 2. By consent of parties, appeal is taken up for hearing forthwith.
3. This appeal under clause 15 of the Letters Patent is directed against an order of the learned Single Judge dated 17th March, 2010 in the above notice of motion.
4. The appellant is the original-plaintiff whereas the respondents are original defendant Nos.1,2 and 3 in the above suit. In this notice of motion which has been moved by the original defendant Nos.1 and 2, the relief sought was for vacating the order of arrest dated 19th October, 2009 of the respondent No.1 (original defendant No.1) vessel. The other prayer in the motion is for an order and direction to the appellant-original plaintiff to furnish security in the sum of US $ 3,50,944.95 towards losses and damages suffered by the respondent No.2 (original second defendant) due to the wrongful arrest of the first defendant vessel. A further relief was sought by the appellant for payment in the sum of US $ 12,101.55 per day until release of the first defendant vessel.
5. By the impugned order, the learned Judge has vacated the order of arrest thereby releasing the first defendant vessel but has declined to pass any order in terms of prayer clause (b) of the notice of motion.
6. Aggrieved by the order of the learned Single Judge vacating the order of arrest, the appellant-original plaintiff in the suit, has filed this appeal.
7. The appellant has filed the above Admiralty Suit in this court for an order and decree in the sum of US $ 3,54,279.05 against the first defendant vessel together with interest at 12% per annum from the date of institution of the suit till payment/realization and for an order of arrest of the first defendant vessel. It is also prayed that the vessel be sold by the Sheriff of Mumbai under orders and directions of this court and sale proceeds be applied towards the satisfaction of the appellants' claim in the suit.
8. It is the case of the appellant that they are a company incorporated under the [ACT] and carrying on the business of selling fuel oil and bunkers to the ocean going vessels.
The first defendant is a vessel, presently at the Port and Harbor at Mumbai within the Admiralty and Vice Admiralty jurisdiction of this court. Respondent No.2 is defendant No.2 in the suit and it is owning, managing and chartering vessels and is the disponent owner by demise charter of the first respondent vessel.
Respondent No.3 is a company organised under the Laws of United Arab Emirates and has taken the first defendant vessel on time charter under a charter party dated 16th April, 2009 for the period from delivery of the vessel till 21st May, 2010. The plaint states that the bunkers were supplied at the request of the master of the first respondent vessel. Further, the supply was made in terms of the agreement between the appellants and respondent No.3 on 29th June, 2009.
9. After setting out the facts relating to the first respondent vessel being taken on a time charter, it has been stated that during the charter, the vessel was in need of bunkers. Respondent No.3 enquired from the appellants as to whether they are ready to supply 800 MT of bunkers. After negotiations, the terms of supply were agreed in an exchange of e-mails between the appellants and respondent No.3. It is stated that the terms were agreed on 29.6.2009. By this agreement, the appellants were to supply 800 MT of bunkers to the vessel at Mundra at the rate of US $ 412 per MT. Respondent No.3 was to pay for the bunkers within 30 days from the invoice being raised on it for the quantity of bunkers delivered to the first respondent vessel. Some of the terms of the agreement were referred to and a copy of the same was annexed as Annexure `A' to the plaint. This agreement was referred to as the sale agreement. It was stated that on 5th July, 2009, the Master made a request to the appellants for the supply of 800 MT of bunkers to the first respondent vessel for the purpose of its onward journey to Eden. A copy of the Master's request is annexed as Annexure `B' to the plaint.
10. Accordingly, the aforementioned quantity of bunkers came to be supplied under a Bunker Delivery Note No.347 dated 5th July, 2009. It is stated that receipts of the bunkers were duly acknowledged by the Master of the first respondent vessel on the said Bunker Delivery Note and also by a Landing Certificate dated 5th July, 2009. Copies of these documents are annexed as Annexures `C' and `D' to the plaint. Thereafter, a detailed invoice bearing No.1150600624 dated 5th July, 2009 for US$ 329,279.05 was delivered. This was the sale consideration for the supply of bunkers. The payment was to be made on/or before 4th August, 2009. A copy of the invoice is annexed as Annexure `E' to the plaint. However, as the respondents failed to make payment of the sale consideration, the suit has been filed. The appellants stated that supply of bunkers amounts to supply of necessaries and the non-payment of price of the bunkers gives rise to a Maritime Claim. The claim is brought pursuant to the Arrest Convention. The appellants stated that since they have a Maritime Claim which entitles them to invoke the admiralty jurisdiction of this court and to procure the arrest, condemnation and sale of the first respondent vessel, as security for their claim.
11. It is in such circumstances the appellants stated that they are entitled to invoke the admiralty jurisdiction of this court.
They stated that the first respondent vessel is presently in the port and harbour of Mumbai and after completion of her employment, is likely to sail to an unknown destination, thereby resulting in the claim remaining unsecured. It was stated that the vessel is likely to sail on 19th October, 2009. For all these reasons and making usual averments, the suit came to be filed on 19th October, 2009.
12. An application for arrest of the vessel was made and, accordingly, an order to that effect came to be passed.
[SECTION]. Upon the arrest of the vessel, the respondent Nos.1 and 2 moved an application vide the above notice of motion and prayed for vacating the order of arrest and furnishing of security by the appellants towards the losses and damages. The notice of motion was moved sometime in December, 2009.
14. It was stated by the respondent No.2's Constituted Attorney on affidavit that they are the demise charterers of the first respondent vessel having taken her on demise charter from her registered owner. After setting out the details with regard to the vessel and the owner, it was stated that the third respondent was looking for the substitute vessel and that is how the first respondent was offered to the third respondent for dues and hire under the time charter party. The terms of the charter party are referred to and thereafter, it is stated that the appellant-plaintiff has no privity of contract with the respondent Nos.1 and 2. The contract of the appellant is only with the third respondent. In the absence of any privity of contract, the appellant cannot have any right to proceed against the first respondent vessel in rem and against the second respondent in personam. On this ground alone, the order of arrest should be vacated and/or set aside.
15. It is alleged that as a matter of universal practice when a vessel is under time charter, it is the responsibility of the time charterer to arrange and pay for the bunkers/fuel. Therefore, the appellant's right to claim or receive payment under any invoice is only from the respondent No.3 and not from these respondents.
16. In paragraphs 5 and 6 of the affidavit, this is what is stated.
"5. The two documents annexed to the Plaint and described as follows viz,:
(i) "Master Requisition" dated 5.7.2009; and
(ii) "Landing Certificate" dated 5.7.09 have been signed by the Chief Engineer of the 1st Defendant Vessel and not the Master of the 1st Defendant Vessel as falsely stated. Both these documents were presented by the Plaintiff to Chief Engineer for his signature while he was on board the 1st Defendant Vessel. This was done after the contract was already concluded between the Plaintiff and the 3rd Defendant for supply of bunkers. It is submitted that post contractual documents do not and cannot create privity of contract when a contract has already come into being prior thereto between the Plaintiff and the 3rd Defendant.
The two documents above were signed and stamped by the Chief Engineer only for the Customs purposes. The "Master Requisition" is a document which is printed (an mass) by the Plaintiff themselves. It was presented by the Plaintiffs after filling in the blanks to the Chief Engineer for signature on board the 1st Defendant Vessel. This document bears a certification at the bottom, which reads "I hereby certify that Vessel is under Foreign Run & above requirement are quite reasonable to reach our next port."
The "Landing Certificate" was prepared by the Plaintiff after the bunker/fuel had been loaded on board and was handed over to the Chief Engineer of the 1st Defendant for his signature whilst he was on board the vessel. This document bears the signatures, stamp and seal of the Customs Officer evidencing the fact that it is issued for Customs purposes especially relating to the issue regarding Customs Duty in case of export of goods from the Mundra port and Special Economic Zone. The declaration on both the documents that the vessel was on foreign run establishes this fact. I say that the customs documentation relating to the supply of the bunkers will be in possession of the Plaintiffs. The Plaintiffs are bound and have to produce the same before this Honourable Court.
6. The Bunker Delivery Receipt (signed by the Chief Engineer of the 1st Defendant Vessel) is also a post contractual document. The Plaintiffs standard terms and conditions of supply were not made known to the 1st and 2nd Defendants. The legend at the bottom of the Bunder Delivery Receipt was not agreed to by these Defendants and is not binding on the 1st or 2nd Defendants.
The signature of the Chief Engineer on the Bunker Delivery Receipt only evidences, receipt of the bunkers and nothing more. The seller's standard Terms and Conditions for Sale of Marine Fuel are not binding on the 1st and 2nd Defendants. Neither the Master nor the Chief Engineer of the 1st Defendant Vessel placed any order upon the Plaintiff for the supply of bunkers.
In fact, by emails dated 3rd and 4th July 2009, the 3rd Defendant had informed the Master of the 1st Defendant vessel that they were arranging to supply 800 tons of bunkers at Mundra. Hereto annexed and marked "Exhibit 3" is the exchange of the aforesaid emails. In any event, the Chief Engineer never had any authority from the 1st or 2nd Defendant to order bunkers or to bind the 1st or 2nd Defendants in relation to the supplies."
17. On these grounds, it was urged that neither the first or the second respondents are personally liable to the appellant's claim in the suit. There is no failure on their part to pay the price/value of the bunkers. They were never supplied pursuant to the request from the first respondent or the second respondent, as falsely alleged. No such request was ever made. It is in such circumstances and because the appellant is pressurizing the respondent Nos.1 and 2 that the order of arrest should be set aside.
18. This is the stand taken in the affidavit in support of the notice of motion dated 17th November, 2009.
19. Thereafter a reply affidavit has been filed by the appellant-
plaintiff in which the plaint averments have been reiterated and additionally, it was urged that undisputed facts are that respondent No.1 is owned/managed by respondent No.2 by demise charter. Further, on 5th July, 2009, the Master and/or Chief Engineer of respondent No.1 vessel made a requisition for the supply of 800 MT of bunkers. The bunkers were supplied by the appellants under a delivery note of the same date. The delivery note has been acknowledged and signed by one [ENTITY] as the Master/Chief Engineer. Then reliance was placed upon the Bunker delivery note which incorporated the standard terms and conditions of sale of marine fuel. Reliance was also placed upon clause 3(e) of the contract dated 29th June, 2009. In such circumstances, it is clear that the supply is on the credit of the vessel and any disclaimer as to the creation of maritime claim of the ship and/or limiting the authority of ship's officers signing this receipt to bind the vessel and her owners are null and void. It is then contended by the appellants that from a perusal of the documents annexed to the plaint, it is clear that the respondents are attempting to wriggle out of their liability. They are disputing the relevance of Master's request and Landing Certificate by claiming that these were signed and stamped by the vessel for the customs purposes only. It was stated that the Master's requisition is not a document prescribed by the Customs Regulations nor is it in any way connected with the customs formalities. The documents are not signed for any purpose much less the one set out in the affidavit in support of the notice of motion by the respondent Nos.1 and 2. It was denied that the bunker delivery note is a post contract document. It was stated that bunker's requisition made by respondent Nos. 1 and 2 read with the appellant's standard terms constitutes the contractual relationship between the appellant and respondent Nos.1 and 2. Bunker delivery note evidences the performance of the said contract by the appellant. Having singed the bunker delivery note without any protest, it is not open for the respondent Nos.1 and 2 to deny or avoid the terms of the sale. Thus, the arrest order was justified and the motion be dismissed, was the reply of the appellant vide affidavit affirmed on 21st November, 2009.
20. There was a rejoinder affidavit to this affidavit in which the respondent Nos.1 and 2 have reiterated the contents of their affidavit filed in support of the motion. It was urged that the document titled as "Master's Requisition" was not even signed by the Master. The said document was signed by the Chief Engineer after it was presented to him on board the vessel after it took berth to facilitate bunkering. This was six days after the contract has been concluded between the appellant and the third respondent. Thus, the supplies were not made pursuant to the documents titled as "Master's Requisition". Reliance was placed on a copy of the bunker supply report prepared by the independent surveyors arranged by the respondent No.3 as buyers of the bunkers. This report clearly shows that the vessel's gangway was placed at 2.20 a.m. on 5th July, 2009. Therefore, the document viz. Master's requisition has been presented to the Chief Engineer by the appellant's representative, thereafter. The report evidences that the bunker supply commenced at 6.35 a.m. on the same day. It is impossible for a bunkers supplier to arrange for 800 mt. of bunkers to be supplied at such a short notice. Thus, the order must have been placed several days in advance and hence, it stands to logic that the appellant had already organized the quantity of bunkers pursuant to their contract concluded earlier with respondent No.3 and not pursuant to the alleged requisition of the Master or Chief Engineer of respondent No.1 vessel.
21. The very fact that appellant now chooses to describe Mr. [ENTITY] as Master/Chief Engineer clearly establishes that the earlier assertion in the plaint that it was the Master who requisitioned the supply, is false. It is not disputed that Mr. [ENTITY] was the Chief Engineer at the relevant time. Thus, the attempt was to show that the reliance on Master's requisition by the appellant is misplaced. Further it was urged that the signature on the bunker delivery receipt evidences receipt of the same. The terms and conditions of the appellant's contract with the respondent No.3 cannot be held to be binding on respondent No.1 and/or respondent No.2 by an attempt to incorporate them in the bunker delivery note which was signed merely for receipt of the supply of bunkers on board the vessel and that too only after the contract was already concluded between the appellant and respondent No.3. Thus, the bunkers were not supplied to the faith and credit of the vessel.
22. All earlier pleas were reiterated by respondent Nos.1 and 2 and it was prayed that the notice of motion be made absolute. It is with this material and written submissions of both sides that the motion came to be placed before the learned Single Judge. The learned Single Judge in the impugned order has concluded that there is no privity of contract between the appellant and respondent Nos.1 and 2. He concluded that there is nothing on record to show that respondent Nos.1 and 2 authorised respondent No.3 to act on their behalf. Reliance was placed on the time charter party and it was held by the learned Judge that the appellant have knowledge of the same. It is held that any officer authorized by the Master or Master signs any papers/documents/receipts including any other arrangements but it is the time charterers who are bound by such receipts and requisitions and they are liable to make payment.
23. However, the learned Judge in paragraphs 9, 10 and [SECTION] of the impugned order observed thus-
"9. There is no serious dispute to the preposition that a supply of bunkers gives rise to "Maritime claims" (1) [PRECEDENT], (2) [PRECEDENT], and (3) [PRECEDENT] Fiji Shipping Company Ltd. & Ors. [PRECEDENT].
10. The bunkers requisition signed by Defendant No. 3-Vessel's Chief Engineer/Master and it was delivered accordingly on 05/07/2009. It is acknowledged by the vessel again through its Master/Chief Engineer. The bunkers delivery note incorporated the plaintiff's standard terms and conditions which provides that the marine fuel is to be supplied to the credit of the vessel.
The signatures were without any qualification.
[SECTION]. There is nothing on record that Defendant Nos.1 and 2 authorized Defendant No.3 to act on behalf of them neither it is the case of the Plaintiff to that effect. The documents so relied including requisitions and receipts for bunkers, need to be considered referring to [SECTION] and [SECTION] of the Charter party.
Therefore, merely because there is a maritime claims that itself cannot be the reason to arrest Defendant No. 1 for want of privity of contract and specific contract between the Plaintiff and Defendant No.3. The Plaintiff, therefore, cannot entitle to raise claim against these Defendants."
24. Concluding thus and also holding that the documents relied upon by the appellant were without signature of the Master, the appellant's case that respondent Nos.1 and 2 are liable for the fuel charges cannot be accepted. Once the contract was only between the appellant and respondent No.3 and bunkers were ordered by respondent No.3 who are time charterers of respondent No.1 vessel, then, the appellant have no right to arrest respondent No.1 vessel as done in the instant case.
25. The learned Judge relied upon two Single Judge decisions of this court and distinguished some other judgments and finally, he proceeded to allow the notice of motion and set aside the order of arrest. It is this conclusion of the learned Judge which is impugned in this appeal.
26. Shri [ENTITY], learned counsel appearing on behalf of the appellant submits that the impugned order is erroneous and unsustainable in law. Shri [ENTITY] submits that what is relevant at this stage is the case set out in the plaint. It may be true that this is an application made by respondent Nos.1 and 2 for vacating the order of arrest. Yet, that request or such application of the respondent Nos.1 and 2 can be decided only on basis of the averments in the plaint and at this stage, it was not permissible for the learned Judge to render any conclusive findings on the liability of the parties. The learned Judge has proceeded to analyse the documents and even considered the contents of the same. The learned Judge overlooked the fact that all this can be done only at the trial. The parties are yet to lead evidence in support of their rival cases. The appellant cannot be shut out and denied an opportunity to lead evidence to prove their case that respondent Nos.1 and 2 are liable. Shri [ENTITY] submits that this is not a matter where the learned Judge has held that the claim of the appellant is not maintainable in the Admiralty and Vice Admiralty Jurisdiction of this court. Once the learned Judge holds that there is a maritime claim, then, the motion should have been dismissed. The learned Judge exceeded his jurisdiction and has virtually rendered a conclusive finding at the interlocutory stage.
In other words, at the interlocutory stage, merits of the claim have been gone into and decided. The oral and documentary evidence is yet to be led. Therefore, the order under challenge deserves to be quashed and set aside.
27. Shri [ENTITY] submits that there was no case made out for vacating the order of arrest. He submits that the ground of lack of privity of contract between the appellant and respondent Nos.1 and 2 could not have been the basis for vacating the order of arrest. Ultimately, the terms and conditions of the contract between the appellant and respondent No.3 would bind the other respondents or not, what are the legal repercussions of the stipulations in the bunkers delivery note and what is the legal consequence of the acknowledgment of the supplies by signing bunkers delivery note are matters which cannot be decided at an interlocutory stage. The appellant could not have been put out of court at this interlocutory stage. Shri [ENTITY] submits that once the learned Judge holds that the supply of bunkers gives rise to a maritime claim, then, the motion should have been dismissed straight away. At this interlocutory stage, the appellant need not prove that supply was on the credit of the vessel. In any event, the documentary evidence was produced which would demonstrate that the bunkers were supplied against the Master's requisition for the benefit of the vessel and the supply of bunkers to the vessel is acknowledged and evidenced by the bunker delivery note also signed by Master/Chief Engineer of the vessel.
As to whether the Master's signature was necessary and whether the Chief Engineer had the authority to sign the same or not are matters which cannot be gone into and decided at an interlocutory stage. The appellant's case was clear. The requisition was made by the Master but the acknowledgment /delivery note was signed by the Master/Chief Engineer. In such circumstances, whose signature binds the vessel is something which the learned Judge could not have conclusively decided. Such findings would demonstrate that the learned Judge misdirected himself in law. For all these reasons, the order under challenge must be set aside.
28. Shri [ENTITY] places strong reliance upon a decision of a learned Single Judge (His Lordship Justice [ENTITY] as he then was) of this court reported in [PRECEDENT], page 161 (M/s.
Crescent [PRECEDENT]).
Shri [ENTITY] submits that this decision is on all fours and squarely applies to the facts of the appellant's case. The other two Single Judges decisions are rendered in their peculiar facts and the learned Judge therefore, should not have relied upon the same. In any event, the two Single Bench decisions of this court in the case of [PRECEDENT] and another decision rendered in [CASE NUMBER] decided on 11th July, 2002 Scandinavian Bunkers A.S. v/s. [CASE NUMBER], are inapplicable in the present facts. Shri [ENTITY] submits that the two Single Judges judgments distinguishing the earlier view in Crescent Petroleum (supra) itself is enough to allow this appeal because until an authoritative pronouncement is rendered, the order of arrest cannot be vacated.
Lastly, relying upon the judgment of the Hon'ble Gujarat High Court in the case of [PRECEDENT], Shri [ENTITY] submits that this decision accepts the view of the Hon'ble Justice [ENTITY] and in such circumstances, the appeal be allowed.
29. In support of his above contentions, Shri [ENTITY] relies upon the following decisions:
1. [PRECEDENT].
2. [PRECEDENT].
3. [PRECEDENT].
4. Liverpool and London S.P. & i Association Ltd. v. m.v.
Sea Success I and anr. [(2004)9 SCC 512].
5. [PRECEDENT].
6. [PRECEDENT]
7. United States Court of Appeals, Ninth Circuit in Marine Fuel Supply & Towing Inc. v. m.v. Ken Lucky, 869 F2d
8. [PRECEDENT]
9. Scandinavian Bunkering A.S. v. [CASE NUMBER]
[PRECEDENT] and [PRECEDENT] ([CASE NUMBER] in [CASE NUMBER] in [CASE NUMBER] and [CASE NUMBER])
30. Shri [ENTITY], learned Senior Counsel appearing on behalf of the respondent Nos.1 and 2, on the other hand, supported the impugned order. Shri [ENTITY] submits that an attempt is now made to show that the case falls within the Admiralty Jurisdiction of this court. He submits that such an attempt by itself would demonstrate that the appellants are not sure of their claim. Their claim squarely arises out of a contract between them and respondent No.3. There is absolutely no privity of contract between the appellant and respondent Nos.1 and 2. Shri [ENTITY] submits that the Single Judge was right in holding that the appellant's claim was only against respondent No.3. The order of arrest, therefore, could not have continued and has been rightly vacated. Shri [ENTITY] has submitted that the decisions which are relied upon by Shri [ENTITY] are rendered at a stage when an application for rejection of the plaint was being considered by this court and Gujarat High Court. That is a jurisdiction available under [SECTION] of the [ACT]. The test laid down at that stage is to go by the averments in the plaint and not to consider the stand of the defendants. However, in the present case, there is an important distinction. In the instant case, the order of arrest was already passed ex-parte against the respondent Nos.1 and 2. Respondent Nos.1 and 2 approached the learned Single Judge for vacating the order of arrest. Therefore, the learned Judge has rightly gone by the contents of the documents and was in no error in analyzing them. When the documents were on record and no one disputed them, then, the learned Judge could have safely interpreted their contents and rendered a finding as to whether the appellant's case against the respondent Nos.1 and 2 was tenable in law. Finding that the claim was not tenable, the learned Judge has rightly allowed the notice of motion and vacated the order of arrest.
31. In any event and going by the averments of the plaint, it is crystal clear that respondent Nos.1 and 2 are in no way liable for the appellant's claim. Shri [ENTITY] has invited our attention to the agreement between the appellant and respondent No.3. He has also taken us through the annexures to the plaint and contended that from paras 2 and 3 of the plaint, it is apparent that the appellants are aware not only of the existence of the charter party but its terms and conditions. The contract for supply of fuel/bunkers was between the appellant and defendant and respondent No.3. The same came to be concluded by exchange of e-mail on 29th June, 2009. Para 3 of the plaint would demonstrate that it was respondent No.3 who placed the order and it was respondent No.3 who are to make payment. That the contract was concluded on 29th June, 2009 is borne out by the appellant's invoice dated 5th July, 2009 (Annexure `E' to the plaint) in the information column (top right corner of the invoice) there is an entry which shows the contract number and date. The invoice is drawn only in the name of respondent No.3 who is shown as buyer and consignee. There is no invoice drawn in the name of respondent Nos.1 and 2. Therefore, the appellant look only to the respondent No.3 for payment of the value of bunkers.
There was no demand raised on respondent Nos.1 and 2 for payment of price. After not receiving payment from respondent No.3, the instant suit is filed, which is nothing but an after thought.
32. Shri [ENTITY] has invited our attention to the time charter party and contended that the learned Judge has rightly placed reliance upon the clauses of the same. Shri [ENTITY] submits that the law is clear. [ACT] and [SECTION] of the [ACT] provide that the vessel can be proceeded against only if the owner of the vessel or demise charter is liable in relation to the claim. Shri [ENTITY] placed strong reliance on [SECTION] and submits that since there is no privity of contract between the appellant and respondent Nos.1 and 2, they were not liable to make any payment. The appellant has no claim much less maritime claim against these respondents.
33. Shri [ENTITY] submits that in the case of Crescent Petroleum (supra), the learned Judge was considering an application for rejection of plaint. The learned Judge, therefore, only relied upon the averments of the plaint and proceeded on the basis of demurrer. He had no occasion to consider the contents of the documents as that was not permissible in his limited jurisdiction. Therefore, the judgment of the learned Single Judge ([ENTITY],J.) in Crescent Petroleum is distinguishable on facts.
It is further distinguishable because in that case,the learned Judge on facts concluded that the claim has been made out in terms of the conventions and also because the bunkers were supplied in the faith and credit of the vessel. Once such is the factual position, then, the learned Judge rightly refused to reject the plaint.
34. The facts of the present case closer to and on par with the judgment of this court rendered by another Single Judge in the case of Raj Shipping Agencies (supra). The learned Single Judge of this court ([ENTITY], J.) rightly held that mere supply of necessaries would not make the owner of the vessel liable to pay the price unless the appellant proves that the supplies were made at the instance of either the owner of the vessel or at the instance of the person authorized by the owner of the vessel. In the present case, there is no pleading that respondent No.3 was authorized by respondent Nos.1 and 2 to requisition the supplies for and on behalf of the vessel and/or the owners.
35. Similar facts were found in the case of [ENTITY]-II (supra) where the another learned Single Judge ([ENTITY], J.) followed the judgment of [ENTITY], J. and held that the plaint averments do not show that supplies were made at the instance of either owner of the vessel or at the instance of the person authorized by owner of the vessel. The averments in that case were clearly based on the fact that acceptance of bunkers by the vessel itself created a contract between the plaintiff and the owner. These averments do not disclose the contract between the owner and the plaintiff. Shri [ENTITY] submits that these two judgments were binding on the learned Single Judge in the present case and following them, he has rightly vacated the order of arrest of the vessel.
36. Shri [ENTITY] has strenuously contended that the averments in the plaint would go to show that the appellants are in doubt. Shri [ENTITY] submits that there was a specific contention raised in the affidavit in support of the notice of motion by the respondent Nos.1 and 2 that the two documents annexed to the plaint viz. Master's Requisition and Landing Certificate have been signed by the Chief Engineer and not the Master of the first respondent vessel as falsely stated and when both these documents were presented by the appellant to the Chief Engineer for signature while he was on board of first respondent vessel and this was done after the contract between appellant and respondent No.3 had already concluded, then, such post contractual documents do not and cannot create privity of contract between the appellant and respondent Nos.1 and 2. Shri [ENTITY] submits that both these documents were signed and stamped by the Chief Engineer only for customs purposes. The Master's requisition is a document printed by the appellant themselves. It was presented by the appellant after filling in the blanks, to the Chief Engineer for signature. The Landing Certificate was also prepared by the appellant themselves but after the bunkers/fuel have been loaded on board of respondent No.1 vessel. These documents bore the signatures, stamp and seal of the customs officers evidencing the fact that they had been issued for the custom purposes. The bunker delivery receipt is also post contractual document. The standard terms and conditions of the supply were not made known to the first and second respondents. The legend at the bottom of the bunker deliver receipt was not agreed by these respondents and, therefore, not binding.
37. Shri [ENTITY] submits that when this specific stand was taken in the affidavit in support, in reply what the appellant purports to state for the first time is that the Master and/or Chief Engineer of respondent No.1 vessel made a requisition for the supply of 800 mt. of bunkers to the respondent No.1 vessel. Shri [ENTITY] submits that the further false statement made in the reply affidavit is that [ENTITY] was the Master/Chief Engineer.
Shri [ENTITY] was the Chief Engineer where as the Master of the vessel is known to the appellant. The master of the vessel is Shri [ENTITY]. Shri [ENTITY] submits that the contents of the bunker delivery note are filled in by the appellant. Shri [ENTITY] submits that these self-serving documents by themselves are not conclusive of the liability of the respondent Nos.1 and 2. Shri [ENTITY] has invited our attention to paras 2 to 4 of the plaint. Shri [ENTITY] has invited our attention to the invoice and pages 10 and 11 of the affidavit in support. Shri [ENTITY] submits that the supplies were made to respondent No.3 and not to the ship or vessel. Therefore, there is no personal liability on the part of the respondent No.2, the owner of the vessel. Shri [ENTITY] submits that the document annexed to the plaint never came to the respondent Nos.1 and 2. Shri [ENTITY] submits that if the delivery note is not signed by the Master but the Chief Engineer, then, no reliance could have been placed on it. For all these reasons, the order under challenge does not suffer from any error or infirmity and deserves to be upheld.
Shri [ENTITY], therefore, prays that the appeal be dismissed.
He relies upon the following decisions in support of his above contention:
1. [PRECEDENT].
2. The "[PRECEDENT].
3. [PRECEDENT].
4. [PRECEDENT])
38. With the assistance of the learned counsel appearing for the parties, we have perused the plaint and annexures thereto, the prayers in the notice of motion and all affidavits filed before the learned Single Judge together with their annexures, we have perused the written submissions, copies of which are annexed to the appeal memo and the decisions so also legal provisions brought to our notice.
39. While setting out the facts leading to the institution of the suit and the filing of the notice of motion for vacating the arrest, we have reproduced some of the paragraphs of the affidavit in support of the notice of motion. We have also reproduced the observations of the learned Single Judge. To our mind, no larger controversy needs to be gone into in the peculiar facts of this case.
We proceed on the basis that the learned Single Judge had before him an application for vacating the order of arrest and, therefore, was considering the matter at an interlocutory stage. In other words, an ex-parte order of arrest of the respondent No.1 vessel was passed by this court on 19th October, 2009 and the request was to vacate it, so also compensate for the alleged wrongful arrest. When such was the nature of the request before the learned Judge, naturally he referred to the appellant's case as set out in the plaint and the documents annexed thereto. He has also referred, in brief, to the case of the respondent Nos.1 and 2 placed on affidavit before him. While it may be true that this was a request to vacate an order of arrest already made and not to reject the plaint, yet, admittedly, the proceedings were interlocutory in nature. The learned Judge was not called upon to render any conclusive finding but to find out whether a prima facie case was made out for the order of arrest. The learned Judge was conscious of this fact as is apparent from reading of his order, yet, with great respect, the learned Judge proceeded to analyze the rival cases as if it is a hearing of the suit and in that process rendered conclusive findings. This was not permissible in this case and particularly at the interim stage.
40. The learned Judge should have first seen the averments in the plaint. The averments are clear. The plaint proceeds to state that the suit is filed against all defendants-respondents by the appellants-plaintiffs on account of the failure to pay the sum of US $ 3,54,279.05 being the price of 799.22 MT of bunkers supplied to the respondent No.1 vessel. In para 1 of the plaint, it is stated that the bunkers were supplied at the request of the Master of the first respondent vessel, yet, the learned Judge should have also perused the contract between the appellant and respondent No.3. That contract states that the marine fuel is delivered not only on the credit of the buyer (respondent No.3) but also on the credit of the vessel receiving the delivery of marine fuel and it is agreed and buyer warrants that seller (appellant) will have and may assert a maritime lien against the receiving vessel for the amount of the purchase price of said marine fuel together with all delivery and other charges forming part of the agreement for sale. Further clause 4 of the agreement is also clear.
41. To our mind, this contract ought to have been perused carefully by the learned Judge. In this case, the seller is the appellant and buyer is respondent No.3. That term "buyer" is defined in clause 1 which is titled as "price" to mean the vessel, vessel owner, or charterer, Master disponent owner or any party requesting offers of quotations for ordering bunkers and/or services and any party on whose behalf the said offers, quotations, orders and subsequent contracts or agreements have been made.
Clause 3 is titled as "nominations and deliveries" and all sub-
clauses therein would show that any notice, by buyer that a maritime lien of the vessel may not be created because of the existence in the buyers charter party of the prohibition of lien clause or for any other reason, must be given to the seller in the initial order for marine fuel in which case no credit can be granted to buyer and the marine fuel shall be paid for the cash or equivalent prior to delivery. Any notice of such restriction can be given by the buyer, its agents, ships personally or other person not later than in the initial order shall not effect a modification of the terms of sale except that any granting of credit by seller is rescinded on receipt of notice, with full payment due forthwith.
Sub-clauses (b), (c), (d) and (e) together with clause 6 would make it clear that the claim with regard to any shortage in quantity must be noted on the marine fuel receipt signed by Master or Chief Engineer at the time of delivery. It is not as if this case of the appellant as put forth in the plaint and supported prima facie by annexures thereto can be discarded at this prima facie stage. It is clear that the contract is produced, together with the requisition, the bunker delivery note duly signed and landing certificate. Each of these documents are sought to be relied upon in isolation by Shri [ENTITY] without referring to the above contractual stipulations. He also does not refer to the disclaimer on bunker delivery note. If this disclaimer is of no consequence, then, this is not a stage at which such a conclusion can be reached. The disclaimer clearly states that the marine fuel as described in the banker delivery note is delivered in accordance with the standard terms and conditions of sale (copy of which has been provided to the buyer on delivery and on credit of the vessel). Any disclaimer as to the creation of maritime claim in the amount of the purchase price and other charges and/or restrictions as to the authorities of the ship's officer signing this note to bind the vessel and her owner to the above, are null and void. Unless an authorized representative of the appellant shall have otherwise agreed in writing at the time respondent No.3 initially ordered the marine fuel agreement and the agreement states that delivery note signed in such circumstances constitutes the waiver of the appellant of the above. Therefore, this is a case where by terming these annexures as unilateral and self-serving documents that the appellant's case cannot be discarded. The learned Judge has done so and, in our opinion, erroneously.
42. The learned Judge should have been aware of the fact that merely because the contract was signed on 29th June, 2009 and the bunkers were delivered on 5th July, 2009 straightaway and prima facie this is not a case of two separate or distinct contracts.
Prima facie, this is a case where the contract envisages that marine fuels have to be supplied and time and place of delivery for a particular grade or grades shall be as ordered by the buyer.
Therefore, prima facie, this is a case where the contract can be said to be arrived at on 29th June, 2009 and concluded by delivery of the bunkers at a later date. The delivery is, prima facie, in terms of the contract and the quantity is supplied as and when an order is placed. That is how the stipulations in the contract read.
If clause 3 of the contract dated 29th June, 2009 is perused, it would show that a buyer has to place an order for marine fuel by providing relevant details including the estimated arrival date at a specified port and method of delivery. It further states that not less than two working days prior to the readiness to receive delivery, the buyer shall give seller written notice of the exact date and time of delivery, the exact location of delivery and exact quantities and kinds and marine fuel to be delivered. Thus, the terms of delivery are also set out and it is clear from the perusal of the other annexures to the plaint that in pursuance of the requisition made that the supply was effected. The invoice refers to the contract and delivery order which is dated 29th June, 2009.
Therefore, there is substance in Shri [ENTITY]'s contention that prima facie these are not distinct contracts but part of the same obligation.
43. That the respondent Nos.1 and 2 also understood them to be so is clear from their own affidavit filed in support of the motion. They termed the bunker delivery receipt as a post contractual document. They do not term it as a distinct contract.
If that was not to be so, then, there was no occasion for the respondent Nos.1 and 2 to plead that the legend at the bottom of the bunker delivery receipt was not agreed to by respondent Nos.1 and 2 and therefore, not binding on them. They stated that signature of the Chief Engineer on bunker delivery receipt only evidenced receipt of the bunkers and nothing more. The seller's standard terms and conditions for sale of marine fuel are not binding on respondent Nos.1 and 2. If this was a distinct contract and unconnected with the appellant's obligations qua the respondents and vice versa, there was no occasion to urge all this in support of the request to vacate the order of arrest. Further, it was not necessary to urge that neither the Master nor the Chief Engineer of the first respondent vessel placed any order on the appellant for the supply of bunkers. Then, there was no occasion to refer to the e-mails of 3rd and 4th July, 2009 between the respondent No.3 and the Master of respondent No.1 vessel. If there is an e-mail inter se between these respondents and it was the Master who had been informed about the delivery and he alone had an authority according to respondent Nos.1 and 2, then, to our mind all such pleading was unnecessary, if there was no privity of contract, prima facie. It is for this reason that they had to plead that the Chief Engineer had no authority to bind respondent Nos.1 or 2 or to order bunkers.
44. To our mind, whether the Chief Engineer had no authority to place any orders or sign the delivery notes and it was only the Master of the vessel who had such authority, then, all such matters are to be gone into and concluded only at the trial. The appellant cannot be shut out at this prima facie stage.
45. With respect, there is substance in criticism of Shri [ENTITY] that the learned Judge exceeded his jurisdiction while vacating the order of arrest. It is rather surprising that the assertions of respondent Nos.1 and 2 on oath are of the nature reproduced by us hereinabove. It is on their own assertions that the case deserves to go for trial. Yet, they vehemently argued to the contrary.
46. It is for this reason we have reproduced their case and also the conclusions drawn by the learned Judge therefrom.
47. In fact, we are of the opinion that the learned Judge's findings even at this prima facie stage are contradictory. If there is no serious dispute about the proposition that supply of bunkers gives rise to maritime claim and there is a maritime claim, then, order of arrest could not have been vacated for want of privity of contract or specific contract as held in para [SECTION] of the impugned order. In fact, the conclusions drawn in para [SECTION] are contrary to what has been held in paras 10 and 11 of the impugned order. It is difficult to reconcile these conclusions and the final finding in para 17 of the impugned order. With great respect, there was no occasion to make any final comment on post contractual documents. Whether the documents are post contractual or post performance of the contract is something which should not have been decided at this stage. The parties have yet to lead evidence.
Just because the documents form part of the record, does not mean that on their contents any conclusive finding can be arrived at in the facts of this case. The link between the stipulations below the bunker delivery note, the contract between appellant and respondent No.3 and the impact of these stipulations is something which must be decided after the evidence is led by parties. Further, whether the documents annexed to the plaint and signed by the Chief Engineer would bind respondent Nos.1 and 2 or not involve a question of authority to bind the vessel and its owner. That is something which should not have been gone into and decided by the learned Single Judge.
48. To our mind, this case should have been decided on the basis of the averments in the plaint, the documents annexed thereto and the assertions of the parties in the affidavits filed in the notice of motion. So considered, this is not a case for vacating the order of arrest. The appellants have made out a prima facie case and in our opinion, the arrest was justified. The arrest could not have been vacated merely because in the opinion of the learned Judge, there is absence of specific agreement between the appellant and respondent Nos.1 and 2.
49. The learned Judge should have appreciated that the case was covered by the Single Judges' judgment in Crescent Petroleum Ltd. (supra) (rendered by His Lordship Shri Justice [ENTITY]). The reliance placed on this judgment by Shri [ENTITY] is apposite. Having carefully perused this judgment with the assistance of the learned counsel appearing for the parties, we are of the opinion that situation in this case is identical. The learned Judge in para 3 of this judgment has referred to the case of the plaintiff therein which is identical to that of the appellant before us. It may be true that this decision is rendered on an application made under [SECTION], yet, the learned Judge has applied the settled principle that if the agreement shows that the bunkers have been supplied on the faith and credit of the vessel, that lien on the vessel is thereby created and that is how para 4 of the judgment of the Single Judge reads.
50. As in the case before us, even before the Single Judge reliance was placed on the charter party but before us the charter party document is between the respondents. Whether the clauses in the said charter party would displace those in the agreement between the appellant and respondent No.3 and therefore, absolve respondent Nos.1 and 2 from the liability to make payment for the supplies are matters of appreciation of evidence and not to be decided at an interlocutory stage is the conclusion reached in the Single Judges' judgment in Crescent Petroleum (supra) The learned Judge has held that the plaintiff cannot be driven out of court merely on speculations.
51. We do not know how this judgment could have been distinguished by the learned Single Judge in our case. The stage at which the matter stood before Hon'ble Justice [ENTITY] and in this case is interlocutory. No conclusive judgment or finding was warranted and necessary to be rendered. In these circumstances, the reliance on this judgment should have clinched the issue. To our mind, this judgment has been erroneously distinguished although it is binding.
52. As far as the judgment of other two learned Single Judges of this court taking a view that the plaint in those cases does not disclose any cause of action are concerned, there, on facts, it was found that the only ground on which the vessel was proceeded against was because the orders were placed by it. The vessel was sought to be roped in without stating as to how it and its owner is liable. In fact, what was relied upon was only the bunker confirmation and nothing more. In that case, the document was found to be completely self-serving and unilateral. The acceptance of the consignment/bunkers therein was not attributed to the Master. It is in such circumstances and relying upon the paras of the plaint that the learned Judge in [CASE NUMBER] rejected the plaint. That was a finding rendered on a meaningful reading of the plaint (See paras 6,7,8,9 and [SECTION]).
53. In Raj Shipping (supra) once again the learned Single Judge found, on facts, that the plaintiff has not shown that the supplies were made at the instance of either the owner of the vessel or at the instance of the person authorized by the owner of the vessel. There were no clear averments that the supplies were made at the instance of the owner of the vessel. In the present case, such averments are made throughout.
54. Any larger controversy need not be gone into as both these decisions are distinguishable on facts. Therefore, it is not necessary to resolve any conflict. In the peculiar facts of this case, it is not necessary to find out whether conflicting judgments have been rendered by three learned Single Judges of our court or not.
Once the matter is in the realm of facts and in the plaint in the present case, it has been specifically alleged that the bunkers were supplied at the request of the Master of the first respondent vessel. Further it being averred in paragraphs 4 to 6 that the supply of bunkers was made which amounts to supply of necessaries and non-payment of price gives rise to maritime claim, and on the basis of the documents annexed to the plaint, it is alleged that each of the defendants are liable and from the assertions of the respondent Nos.1 and 2, it is clear that this aspect will have to be probed further, then, it is not possible to vacate the order of arrest.
55. Resultantly, it is not necessary to make detailed reference to other decisions brought to our notice save and except the Division Bench judgment of Gujarat High Court wherein, on similar facts, the request to reject the plaint has been refused. Following the Single Judge's judgment in Crescent Petroleum (supra) and on identical facts, this conclusion has been reached. Therefore, to our mind vital issues are raised and it is not possible to throw out the plaint nor vacate the order of arrest. The decisions of other courts including of the courts in Australia need not be referred because they cover a wider conspectus. Therein the trend is revealed and we do not find it necessary to go into the issue as to whether there has been any change in the views on this aspect in England and Australia. Such matters can be left open for decision in an appropriate case.
56. In the result, the appeal succeeds, the order of the learned Single Judge dated 17th March 2010 in the notice of motion is set aside. The order of arrest of the first respondent vessel is upheld.
It would be open for the respondent Nos.1 and 2 to sail or leave the port or Harbor at Mumbai provided they furnish security to the satisfaction of the appellant's claim in the suit. Such security should be scrutinized by the Prothonotary & Senior Master of this court and if there is no caveat against release of the first respondent vessel, then, on satisfying the authority that security is in terms of the rules, the vessel be released from arrest. In the peculiar facts, there shall be no order as to costs.
CHIEF JUSTICE [ENTITY], J.