1 srk app--L-122-11.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL (LODGING) NO.122 OF 2011 IN ADMIRALTY SUIT (LODGING) NO.402 OF 2011 Zuari Industries Limited. ... Appellant Versus M.V. Olympias and another. ... Respondents Mr. V.R. Dhond with Mr. Ashish Kamat and Ms. Sneha Madirur i/by M/s. Chitnis & Co. for the appellant. Mr. Prashanat Pratap with Mr. Manoj Khatri for respondents. CORAM : MOHIT S. SHAH, C.J. & S.J. VAZIFDAR, J. Friday, February 25, 2011 P .C. This appeal is directed against the order dated 23rd February, 2011 of the learned trial Judge in so far as while granting application of the respondents-defendants for release of vessel m.v. Olympias on the defendants furnishing security in the sum of US$ 2,63,755.52 or the Indian rupee equivalent thereof, the learned Judge did not require the defendants to furnish security for the interest pendante lite at the rate of 18% per annum. 2. The learned counsel for the appellant submits that if the defendants were to deposit the amount, the said amount would be invested in a fixed deposit which would earn interest. The learned trial Judge did not accept 2 srk app--L-122-11.sxw the defendants' request to scale down the rate of interest or amounts paid for costs and expenses in the sum of 9 lakh US$ equivalent to Rs, 9,19,000/- incurred towards the Indian proceedings for filing of suit. Even then in the operative order, the learned trial Judge has not required the defendants to furnish security for the amount of interest pendante lite. 3. The learned counsel for the respondents-defendants has opposed the appeal and submitted that the appellant-plaintiff is only claiming the damages and not any amount under any contract. He further submitted that the amount of costs and expenses incurred towards the Indian proceedings till the filing of the suit is also not awardable to the appellant-plaintiff and that the entire amount is required to be deducted. 4. Having heard the learned counsel for the parties, we are of the view that there is some substance in the submissions made on behalf of the appellant that if the amounts were to be deposited by the defendants for the purpose of release of the vessel, the amount would be invested in fixed deposit and would earn interest. Hence, the defendants ought to be required to furnish security for the interest pendante lite also. 5. In view of the above finding, we called upon the learned counsel for the parties to indicate the rate at which security should be furnished for interest. 6. As regards the said suggestion, the learned counsel for the parties have agreed without prejudice to the rights and contentions of their respective clients in the admiralty suit, that the rate of interest pendante lite may be fixed at 9% per annum and that no security will be furnished on the amount of costs 3 srk app--L-122-11.sxw and expenses allegedly incurred in respect of the Indian proceedings till filing of the suit quantified by the appellant at 9 lakh US$ equivalent to Rs, 9,19,000/-. 7. In the result, after rounding of the claim in Indian rupees, we direct that the respondents-defendants shall furnish security as stated hereafter in the sum of Rs.1.21 crores together with interest at the rate of 9% per annum from the date of filing of the suit. The security shall be in the form of guarantee to the satisfaction of the Prothonotary & Senior Master initially of the Standard Chartered Bank which shall be substituted by a guarantee of a nationalized bank on/or before 31st May, 2011. In the event of the guarantee not being substituted by 31st May, 2011, the same shall be invoked forthwith. The guarantee issued either by the Standard Chartered Bank or by the nationalized bank shall be valid and subsisting till the disposal of the suit and for a period of 12 weeks from the date of the certified copy of the judgment being made available to the parties. 9. It is clarified that this order is only by way of an interim arrangement during the pendency of the admiralty suit and is passed without prejudice to the rights and contentions of the parties in the suit. 10. Security is to be furnished by the Defendants without prejudice to all rights and defences including the right if any to refer the disputes and claims to arbitration. 11. Instrument of release dispensed with. Mr. Khatri making a statement that there is no caveat against release of the vessel. 4 srk app--L-122-11.sxw 12. Mr. Manoj Khatri undertakes to this Court to file his vakalatnama on behalf of the Defendant vessel. The appeal is, accordingly, partly allowed in the aforesaid terms. All parties including the Prothonotary & Senior Master, High Court, Bombay and the sheriff of Mumbai to act on a authenticated copy of this order. CHIEF JUSTICE S.J. VAZIFDAR, J.