Angsley Investment Ltd. v. Turus Shipping Service & Ors.

1. This application is filed by M/s. Angsley Investment Ltd., the intervener and interested party in defendant vessel (MV Lima-I) with a prayer to decide the issue regarding maintainability of the suit on the ground that at the time when arrest order of (MV Lima-I) came to be passed by this Court on 16.03.2002 in O.J.M.C.A. No. 20 of 2002, it was harbored at port of Calcutta, which is within the territorial jurisdiction of the Hon'ble High Court of Calcutta and not within the territory of the jurisdiction of the Hon'ble High Court of Gujarat. It is also stated that even when the first order dated 16.07.2001 came to be passed in Admiralty Suit No. 16 of 2001 filed by the plaintiff, ownership of ships (MV Lima-I and II) of different persons and having different entity. Therefore, following prayers are made:

(A) Your Lordships may be pleased to frame preliminary issue about territorial jurisdiction, and on the aspect that whether the ship LIMA-I & LIMA-II are sister ships and further be pleased to dismiss the suit on the aspect that this Hon'ble Court lacks territorial jurisdiction in respect of ship M.V.Lima-I, (B) Pass such other and further order in the interest of justice which may be deemed fit to this Hon'ble Court.

2. Thus, this Court is asked to frame preliminary issue about territorial jurisdiction with regard to the vessels (MV Lima-I and II) for which order of arrest came to be passed by this Court.

3. In a reply to the above application filed by the intervener, the plaintiff has submitted that initially order of arrest came to be passed against vessel MV Lima-II on 16.07.2001 in Admiralty Suit No. 16 of 2001 was defied and the vessel had jumped the arrest order, and therefore, on application moved by the original plaintiff i.e. O.J.C.A. No. 20 of 2002, this Court passed order on 16.03.2002 for arrest of vessel MV Lima-I, a sister concerned, for which the present application is filed. It is also averred in the above reply that present application is barred by delay, latches, acquiescence and estopple in view of the fact that applicant had already appeared before this Court on furnishing security for the release of vessel MV Lima-I as early as in the year 2002 and furnished the bank guarantee and also renewed the same from time to time and participated in the proceedings of the suit by way of preferring O.J.C.A.No. 147 of 2003 and conditionally release was ordered by this Court on 18.06.2002 passed in O.J.C.A.No. 53 of 2002 preferred by the applicant. It is also stated that since MV Lima-I, the sister concerned of the original defendant vessel (MV Lima-II) and therefore, consequential order, passed by this Court of arrest of MV Lima-I, did not require to be vacated, altered or modified at the behest of stranger to the suit proceedings, not yet impleaded as a party, and therefore having submitted to the jurisdiction of this Court and the fact that various other issues are involved from the issue of jurisdiction cannot be decided as a preliminary issue under Order-14 Rule 2 of Code of Civil Procedure, 1908. Learned Counsel appearing for both the parties have addressed to this Court on various issues and cited case-laws in support of their submissions. The applicant,-intervener has also even filed written submission and the same is taken on record.

4. Shri Y.N. Ravani, learned advocate appearing for the intervener has submitted that under Order-14 Rule 2 of the Code of Civil Procedure, 1908, the suit is required to be disposed of on the ground that this Court lacks territorial jurisdiction and also on the ground that plaintiff is not a registered firm and by framing preliminary issue with regard to the territorial jurisdiction the whole suit proceedings can be disposed of. In support of his submission, he has relied upon the decisions of (2002) 10 SCC 101 : (2005) 12 SCC 362 and 2003 (1) SCC 488 and submitted that it is incumbent upon the Court to decide the issue of territorial jurisdiction as a preliminary issue and when the facts are admitted, ordinarily preliminary issue has to be decided. In the present case, it is admitted that vessel (MV Lima-I) was not within the territorial jurisdiction of the High Court of Gujarat and was harboured at Port of Haldiya and submitted that bank guarantee of US$ 80,000, in such circumstances, the Court may decide preliminary issue so that parties may not have faced further proceedings.

After relying upon the provisions of Order-14, Rule-2 and applicability of rules framed by the High Court of Bombay with regard to the Admiralty Suit and the decision of the Apex Court in M.V. Elisabeth and Ors. v. Harwan Investment & Trading Pvt. Ltd., Goa , he has submitted that this Court has only jurisdiction with regard to territorial limits and not out of that and now law is settled in this regard and even this Court had also ordered release of same Vessel (MV Lima-I) on the ground that this Court lacks territorial jurisdiction by order dated 17.06.2005 passed in Civil Application No. 84 of 2004 in Admiralty Suit No. 27 of 2001.

5. Learned advocate Shri Y.N.Ravani has also highlighted other aspect that the plaintiffs have no locus to even file the suit in view of the fact that the plaintiff is not a registered firm and pressed into service of Section 69 of the Partnership Act and relied upon the decision of Apex Court reported in AIR 1977 SC 366 and 2001 (3) GLR 2041 in support of his contention that unregistered firm cannot file suit to enforce any contractual transaction.

6. Shri Mihir Joshi, learned advocate appearing for the original plaintiff has submitted that the present applicant, is only an intervener, and not yet impleaded as a party to the suit proceedings, and therefore, no order can be passed at his behest much less framing issue of jurisdiction of this Court as preliminary issue. Learned Counsel submitted that even status and locus of the applicant is not established and for determination of such question, suit will have to be proceeded for detail scrutiny of materials on record. According to him even prayers of the application are based on mix question of law and facts. He has further submitted that MV Lima-II had jumped the arrest order and the consequential order passed by this Court to arrest the sister vessel (MV Lima-I) to ensure safe implementation of earlier order clearly indicate that this Court has jurisdiction to secure presence of original vessel which was in territorial jurisdiction of this Court and the order passed which is consequential in nature to enforce the first and original order cannot be said to be lacking in jurisdiction. He has further submitted that present applicant having submitted to the jurisdiction of this Court as early as in the year 2002 and has filed various applications including the application for releasing present vessel MV Lima-I and renewal of bank guarantee and no whisper was made at the time of seeking release of vessel and thus, acquiesced to the jurisdiction, belated plea now raised to frame the preliminary issue with regard to the jurisdiction does not require any interference of this Court. Learned Counsel has further submitted that preliminary issue cannot be decided only on the basis of pleadings of the suit but also from written statement and no such written statement is filed in the suit and therefore preliminary issue cannot be framed.

Learned Senior Counsel Shri Mihir Joshi appearing for the original plaintiffs has submitted that applicants have waived his right to raise any question with regard to the jurisdiction and even otherwise also the issues involved in the subject matter of the suit proceedings and disputed title of the vessel, are mixed question of facts and law for which evidence is required to be led and the issue of jurisdiction cannot be decided as preliminary issue. He has also submitted that the applicant is not yet impleaded as a party and no right accrue much less to the legal right of the applicant to seek any order from this Court and even with regard to the ownership of the vessel, litigation is pending. Learned Counsel has relied on the order of High Court of Bombay in this regard.

Shri Mihir Joshi has further submitted that even in the present proceedings also numbers of Civil Applications filed, require final adjudication. He has further submitted that the ownership of M.V.Lima-I is also disputed and initially with original defendant No. 2 then changed its name to MV Yin Kim and purchased by Mercury Shipholding Inct. then by Angsley, the present applicant and later on was sold to M/s. Jain Udyog for dismentaling the ship as surfaces on record. Thus, according to him, all the above issues yet to be decided and even consequences of defiance of the original order passed in Admiralty Suit No. 16 of 2001 against MV Lima-II is yet to be decided, no preliminary issue can be framed by this Court as envisaged under Order-14 Rule 2 of Code of Civil Procedure, 1908.

7. Having heard the learned advocates appearing for the parties and on perusal of record, the present applicant is restricted for deciding the question about framing issue about territorial jurisdiction of this Court to proceed further with Admiralty Suit No. 16 of 2001 in backdrop of the facts that order of arrest of MV.Lima-I, when came to be passed on 16.03.2002 was not within the territorial jurisdiction of this Court, but it was at port of Haldiya.

8. At the outset, it is to be noted that this is not the only application pending qua proceedings of Admiralty Suit No. 16 of 2001 before this Court. The applicant claims to be purchaser of vessel (MV Lima-I) and in all the ownership by way of sale/transfer of the above ship has taken place on three occasions as submitted by the applicant himself. Initially, the ownership of vessel (MV Lima-I) was with defendant No. 2 i.e. Denizcilik Ve.Tic. and thereafter it was with Mercury Shipholding Inc. and even the name of vessel was also changed as M.V.YIN KIM (Ex Lima-I) and registered at Saint Vincent and Grenadines and thereafter the present applicant i.e. Angsley owned the vessel and in turn it was sold to M/s. Jain Udyog for breaking purpose. The above ownership is also in dispute. O.J.C.A.No. 20 of 2002 came to be filed for arrest of MV Lima-I on the ground that original defendant vessel (MV.Lima-II) had jumped the order of arrest. That the present applicant as early as on 18th June, 2002 submitted to the jurisdiction of this Court by filing Civil Application No. 53 of 2002 and having accepted the jurisdiction no whisper was made about jurisdiction of this Court at that particular time. Thereafter, the original plaintiffs have filed Civil Application No. 67 of 2003 for invoking bank guarantee and then only this Civil Application No. 83 of 2004 is filed with a prayer having preliminary issue with regard to the jurisdiction of this Court to try the Admiralty Suit. Thus, it is clearly established that the applicant has acquiesced to the jurisdiction of this Court and this belated attempt on the part of the applicant cannot be accepted. At this stage, in support of the above conclusion the reliance can be placed upon the decision of the Apex Court in the case of Mayar (H.K.) Ltd. v. Owners and Parties, Vessel M.V. Fortune Express, where the Apex Court considered that when the bank guarantee was furnished in that case, on 17.05.2000 the defendant had not pressed for dismissal of the suit on the ground of jurisdiction of the Court and waited till 07.07.2001 to file an application. The Apex Court has held that the stage was belated and it amounts waiving the right to raise the objection about the jurisdiction. In the above case, the Apex Court was confronted with the fact about filing of suit in the High Court of Calcutta inspite of exclusion clause of jurisdiction of Calcutta High Court was specifically mentioned in the agreement and it was agreed that the Court of Singapore will have jurisdiction but since part of the Logs were delivered at Calcutta, the Apex Court found that cause of action had arose within the jurisdiction of Calcutta High Court and the suit filed by the plaintiff was maintainable. In the present case, the consequential order passed by this High Court on 16.03.2002 in O.J.C.A.No. 20 of 2002 after the original defendant vessel (MV Lima-II) had jumped the order of arrest it was imperative to pass order of arrest of M.V.Lima-I being a sister vessel and number of issues yet to be decided for which evidence is to be led, preliminary issue cannot be framed at the behest of the applicant, who is not yet impleaded even as a party and/or raised this question at the earliest.

9. The submissions of the applicant that proper parties to the suit and right flowing out of such proceedings do not apply to Admiralty Suit also, required to be gone into after appreciating the material on record. Therefore, on the request to frame a preliminary issue made by the applicant, about the jurisdiction of this Court and raising a plea after two years, having acquiesced to the jurisdiction of this Court while submitting bank guarantee for releasing MV Lima-I from the arrest order, without any objection in this regard at this stage, such prayer cannot be accepted.

10. Order 14 Rule 1 and Rule of Code of Civil Procedure, 1908 read as under:

ORDER XIV 1. Framing of issues.-(1) Issues arise when a material proposition of fact or law is affirmed by the one party and denied by the other.

(2) Material propositions are those propositions of law or fact which a plaintiff must allege in order to show a right to sue or a defendant must allege in order to constitute his defence.

(3) Each material proposition affirmed by one party and denied by the other shall form the subject of a distinct issue.

(4) Issues are of two kinds;

(a) issues of fact,

(b) issues of law.

(5) At the first hearing of the suit the Court shall, after reading the plaint and the written statements, if any, and [after examination under Rule 2 of Order X and after hearing the parties or their pleaders], ascertain upon what material propositions of fact or of law the parties are at variance, and shall thereupon proceed to frame and record the issues on which the right decision of the case appears to depend.

(6) Nothing in this rule requires the Court to frame and record issues where the defendant at the first hearing of the suit makes no defence.

2. Court to pronounce judgment on all issues.- (1) Notwithstanding that a case may be disposed of on a preliminary issue, the Court shall, subject to the provisions of Sub-rule (2), pronounce judgment on all issues.

(2) Where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed of on an issue of law only, it may try that issue first if that issue relates to-

(a) the jurisdiction of the Court, or

(b) a bar to the suit created by any law for the time being in force, and for that purpose may, if it thinks fit, postopone the settlement of the other issues until after that issue has been determined, any may deal with the suit in accordance with the decision on that issue].

The Apex Court in Para:13 of the decision in case of Ramesh B. Desai and Ors. v. Bipin Vadilal Mehta and Ors., has held as under:

Sub-rule (2) of Order 14 Rule 2 CPC lays down that where issues both of law and of fact arise in the same suit, and the Court is of the opinion that case or any part thereof may be disposed of on an issue of law only and it may try such issue first in time if it relates to (a) the jurisdiction of the Court, or (b) a bar to the suit created by any law for the time being in force. The provisions of this Rule came up for consideration before this Court in Major S.S. Khanna v. Brig. F. J. Dillon and it was held as under:

Under Order 14 Rule 2, Code of Civil Procedure where issues both of law and of fact raise in the same suit, and the Court is of the opinion that the case or any part thereof may be disposed of on the issues of law only, it shall try those issues first, and for the purpose may, if it thinks fit, postpone the settlement of the issues of fact until after the issues of law have been determined. The jurisdiction to try issues of law apart from the issues of fact may be exercised only where in the opinion of the court the whole suit may be disposed of on the issues of law alone, but the Code confers no jurisdiction upon the court to try a suit on mixed issues of law and fact as preliminary issues. Normally all the issues in a suit should be tried by the court, not to do so, especially when the decision on issues even of law depend upon the decision of issues of fact, would result in a lopsided trial of the suit.

Though there has been a slight amendment in the language of Order 14 Rule 2 CPC by the amending Act, 1976 but the principle enunciated in the abovequoted decision still holds good and there can be no departure from the principle that the Code confers no jurisdiction upon the court to try a suit on mixed issues of law and fact as a preliminary issue and where the decision on issue of law depends upon decision of fact, it cannot be tried as a preliminary issue.

Thus, if a mixed question of fact and law exists, the preliminary issue with regard to the jurisdiction cannot be framed. In the present case also, number of facts are pleaded and even no written submission is yet filed by the applicant to the Admiralty Suit/plaint at behest of such a stranger to the proceedings, no preliminary issue can be framed.

10. In view of the above facts and discussion on law and the case-law cited and discussed as above, when the title of the applicant itself is in dispute, which requires details scrutiny of evidence and the applicant has acquiesced to the jurisdiction of this Court as early as in the year 2002 and belated application made after a period of two years for framing preliminary issue of jurisdiction of this Court is not accepted in view of the above decision of the Apex Court in the case of Mayar (H.K.) Ltd. v. Owners and Parties, Vessel M.V. Fortune Express etc. Thus, this Court is in full agreement with law laid down by M.V. Elisabeth and Ors. v. Harwan Investment & Trading Pvt. Ltd., Goa , at the same time facts of the present case clearly indicate that it is a mix question of fact and law which do not require adjudication at the threshold. For the same reasons, the oral order passed by this Court in other case, where in O.J.C.A.No. 83 of 2004 in Admiralty Suit No. 27 of 2001 passed by this Court is also not applicable. Therefore, other contentions of the applicant about determination of right of the plaintiff to prefer the present Admiralty Suit in absence of registration of partnership deed and requirement of fulfillment of Section 69 of the Partnership Act and applicability of rules framed by High Court of Bombay in case of Admiralty proceedings do not require any further scrutiny since the Court is satisfied on other grounds that the prayers of the applicant in this application cannot be granted.

11. In view of the above, O.J.C.A.No. 83 of 2004 in Admiralty Suit No. 16 of 2001 stands rejected. There shall be no order as to costs.

12. Registry is to list the Admiralty Suit No. 16 of 2001 and other Civil Applications at the earliest, in accordance with law.