Case: ICICI Ltd Vs. Board of Trustees, Port of Calcutta

2. Briefly stated, the facts are as follows:Two ships, namely, M. V. Charisma and M. V. Alexandra were owned by one Nilhaat Shipping Company Limited. The said Company had been advanced loans by the Shipping Development Fund Committee (SDFC) which had been established under the provisions of the Merchant Shipping Act. For repayment of the loans the abovementioned two ships were mortgaged to SDFC. The said SDFC had filed Admiralty Suit No. 32 of 1979 in the Bombay High Court, for enforcement of mortgage created in its favour by arrest and sale of vessel M.V. Charisma. The Bombay High Court had directed arrest. In breach of the order of the Bombay High Court, the vessel was sent to Haldia and was abandoned over there.3. SDFC also filed a suit in England seeking to enforce the mortgage created in its favour in respect of the vessel M. V. Alexandra. This suit was decreed against the owners.4. The ship crew/seamen filed Admiralty Suit No. 15 of 1984 in the Calcutta High Court in respect of the vessel M.V. Charisma. Similarly, the ship crew/Sheriff filed Admiralty Suit No. 16 of 1984 in the Calcutta High Court in respect of the vessel M. V. Alexandra.5. SDFC had also filed in the Calcutta High Court, Admiralty Suit No. 1 of 1983 for enforcement of mortgage created in its favour by arrest and sale of the vessel M. V. Alexandra. The said vessel M. V. Alexandra was lying in the premises of Calcutta Port Trust and was incurring port charges, berth hire and dock dues. Thus Calcutta Port Trust applied, in the said suit, for leave to intervene and proceed against the vehicle in terms of S.64(2) of the Major Port Trusts Act, 1963.6. The Bombay High Court had, by an order dated 17-11-1984, directed sale of the vessel M.V. Charisma. Similarly by an order dated 28-6-1985 the High Court of Calcutta directed sale of the vessel M. V. Alexandra. Pursuant to the orders both the vessels were sold. The Calcutta High Court by its order dated 9-12-1985 directed the Port Authorities to give possession of the vessel M. V. Alexandra to the purchaser. It appears that possession of the vessel M. V. Charisma was also given.

Court's reasoning:
14. The Calcutta High Court has based the impugned judgment on this authority. We are in agreement with the view that by virtue of this authority the Port Trust would have priority over thethe present case, the shipping company which owns the vessel. The harbour authorities allow ships -- national or foreign to anchor and avail of the services provided by them. For payment they look to the vessel. The owner may be foreign or even unknown to the harbour authority. The latters right to recover its dues is not affected by any pending proceedings against the owner in any court -- whether in winding up or otherwise. The harbour authority can arrest the vessel while it is anchored in the harbour and recover its dues in respect of that vessel by sale of the vessel if the dues are not paid. This lien of the harbour authority over the vessel is paramount. The lien cannot be extinguished or the vessel sold by any other authority under the directions of the court or otherwise, unless the harbour authority consents to such sale.We are unable to accept this submission. On facts of this case it cannot be said that the Port Trust had given up their right under S.64.We are unable to accept submission that the provisions of the Shipping Development Fund Committee (Abolition) Act, 1986 and/or that S.51 and 52 of the Merchant Shipping Act, 1958 give the claims of the appellant a priority over the claims of the Port Trust.