Case: Videsh Sanchar Nigam Ltd Vs. M.V. Kapitan Kud

2. This appeal by special leave arises from the order dated 13-10-1995 passed by the Division Bench of the Bombay High Court in Appeal No. 727 of 1995 in Notice of Motion in Admiralty Suit No. 46 of 1995. By the impugned order, the Division Bench modified the order of the learned Single Judge and directed release of commercial ship M/s. M.V. Kapitan Kud. The facts not in dispute are that on 21-7-1995 at around 6.00 a.m. the International Cable which extends on sea route from Singapore to France having branches at Bombay, experienced a break and the fault was got identified by the appellant-plaintiff at a distance of about 18.3 kms from its office at Prabhadevi in Greater Bombay whereat its cable station is situated. According to the appellant, due to break of the cable, overseas telecommunication was disrupted. They requisitioned the services of Coast Guard authorities to identify whether any ship had anchored in the vicinity of the break point. The appellant in that behalf wrote a letter to the Coast Guard authorities on 21-7-1995 itself and requested "to survey the area and identify if any vessel has anchored there". The coordinates of the break point were indicated as 18 deg. 59.4N and 72 deg. 41.0E. On 22-7-1995, Deputy Commandant of the Coast Guard Region (West) had stated thus : "A helicopter reported that a vessel named Kapitan Kud registered ODESSA was found anchored in position 310 PRONGS - 0.9 miles, in 18 deg, 58.5North and 72 deg. 40.7East"3. The repairing vessel which repaired the faulted cable found thus : "Cable fault caused by shift anchor". The Coast Guard further found no other vessel was found in the vicinity. It contacted the vessel on radio and confirmed the position/mark coordinates as determined by the helicopter from the vessel itself. On 29-7-1995, the appellant laid the Admiralty Suit No. 46 of 1995 against the respondent-vessel claiming damages of about Rs 28 crores the break-up whereof has been stated in Exhibit C of the plain reproduced at p. 94 of Additional Documents filed as Volume I at the exchange rate of Rs 32 per US Dollar. The appellants had taken Notice of Motion for arrest of the vessel by order dated 29-7-1995, the vessel was arrested and detained by the Sheriff of Bombay. It is also not in dispute that he Captain of the vessel had not made any contact with the appellants for more than one month and for the first time on 1-9-1995 the vessel made an application for its release from arrest by way of Notice of Motion. The learned trial Judge having Admiralty Jurisdiction dismissed the Motion and released the vessel4. Section 140 of the Civil Procedure Code, 1908 (for short the Code) provides that in any admiralty or vice-admiralty cause of salvage ... the court, whether it be exercising its original or its appellate jurisdiction may, in its jurisdiction on request by either party summon to its assistance two competent assessors in the manner stated thereunder and such assessors shall attend and assist the court accordingly. The Government of India exercising its power under Section 9(1) of Merchant Shipping Act, 1958 (44 of 1958) has notified the officers specified in the Schedule, to be assessors for the purposes of the said Act. For the Port of Bombay, the officers are Nautical Surveyor, Engineer and Ship Surveyor and Ship Surveyor attached to the Mercantile Marine Department, Bombay District or to the Directorate General of Shipping, Bombay. The Division Bench by its order dated 26-9-1995 directed the assessors to give their estimate of the anchoring position and probable involvement of the first respondent in the breakage of the cable and gave five directions in that behalf. When the notice was issued, though initially the Caption of the vessel and first respondent responded, later they declined to participate in the proceedings before the assessors. On the basis of the material available and the affidavit filed by the Captain of the vessel, the assessors accepting the statement of the Captain, opined that the distance between the position of 3rd July and 29th July approximately was 7.50 nautical miles. The reason for the shifting was strong winds then blowing from southward. The vessel anchored was not able to hold the ship in her position and the vessel was either continuously or intermittently drifting in northerly direction. The vessel should have dropped anchor in the designated anchorage which was about 5 miles clear and northward from the subject communication cable. The possibility of the vessel having shifted her position after the mishap completely could not be ruled out. Merchant vessels do not customarily anchor in the vicinity of the prohibited positions. Coast Guard authorities were not able to locate any other vessel within 3 nautical miles of the respondent-vessel. They concludedon the foregoing it is quite clear that the subject cable has been damaged by the anchor of an ocean-going ship. The probability of that ocean-going vessel being the first respondent vessel, as stated above, is very high."When the correctness of the report was disputed the Division Bench appointed two Commissioners who were nautical advisors, one in service and the other having retired from Government of India service. In this behalf, one circumstance that becomes relevant to notice and could not be disputed is that after appointment of the Commissioners the proceedings of the Commissioners do indicate that neither the advocate nor the solicitors were present at the time of inspection of the vessel. It would be relevant to note that when the report of the surveyors was submitted and when two Commissioners were appointed to assess the anchoring position and probable involvement of the respondent-vessel, it would be highly unlikely that the counsel or the solicitors of the appellant would abstain from participating in the proceedings before the Commissioners. On the other hand, having had the copy of the report of the surveyors, it would be likely and highly probable in ordinary human conduct that they would present and press their case before the Commissioners. The case set up by the appellant is that when they went into the vessel, both the advocate and the solicitor were wrongfully confined in the cabin of the vessel and they were thereby prevented from participating in the inspection and the report of the Commissioners was one-sided. It would appear to be probable though the objection came to be sent by fax belatedly. The delay by itself is not material in view of the highly probable circumstance referred to earlier. The Commissioners report is in favour of the vessel6. The Division Bench for considering the material held that "it cannot be said that the claim of the appellant/original plaintiff is vexatious. It cannot be said that the matter does not warrant any trial." The Division Bench was not inclined to draw any adverse inference from the inordinate delay of more than a month in providing access to the logbook of the ship etc

Court's reasoning:
15. The admiralty action is an action in rem. The Division Bench found that the claim was not vexatious but is triable. There is strong evidence to show that at the relevant time the respondent-vessel was within the vicinity of the damaged cable. The Division Bench declined to interfere on the ground that the Captain of the vessel filed an undertaking that the vessel belonged to the Black Sea Shipping Company which is wholly owned by the Ukrainian Government. The undertaking given by the Captain of the vessel that in the event of the suit being decreed they would honour the decree, was accepted by the Court and it directed the release of the vessel. We think that neither the approach of the Division Bench of the High Court nor the finding of the learned trial Judge on the admiralty jurisdiction that no prima facie case is made out, is right. It is seen that there is a strong triable case for the reasons stated earlier. The ship is a foreign ship and if it leaves the shores of Indian territorial waters it is difficult to get hold of it and it may not return to the jurisdiction of Indian courts. The claim thereby, even if successful, would remain unexecutable or land in trouble in private international law in its enforcement. Under these circumstances, we are of the firm opinion that the vessel may be released on certain conditions, viz., (i) the respondent shall deposit a sum of Rs 10 crores; (ii) the Ukrainian Government shall give an undertaking through its accredited authority, more particularly may be its Ambassador attached to it Embassy in India in writing duly undertaking that in the event of the suit being decreed they would comply with the decree without reference to the execution; (iii) the undertaking should be for balance amount of Rs 18 crores and towards costs and other expenses roughly put at Rs 25 crores. It would be open to them to comply with these directions at any time. We are not fixing any time-limit because it would be open to them to comply with it at any time and until then the ship shall remain arrested and shall not leave the shores of the Indian territorial waters. On deposit of Rs 10 crores and on furnishing of undertakings to the satisfaction of the Division Bench of the High Court, as stated above, the High Court would give appropriate direction for releasing the vessel in accordance with law