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  • S. 146(b) of the Merchant Shipping Act, 1958, hereinafter referred to as the Act.
  • Act, 1873 C. 66. S. 89)
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  • S. 146(b) of the Merchant Shipping Act, 1958, hereinafter referred to as the Act.
  • Act, 1873 C. 66. S. 89)
Smart Summary

Judgment Summary — Nainar Sundaram, J.

Factual and Procedural Background

The appellant was a third party in C.S. No. 110 of 1981 (Original Side). The first respondent (plaintiff) sued respondents 2–4 (defendants) for recovery of Rs. 43,40,015.83 and claimed a charge over the vessel "M.V. Fareeda." The suit was decreed as per a compromise on 13 March 1981; the decree recognised a paramount charge of the plaintiff over the vessel and authorised execution against the vessel. The plaintiff was appointed Receiver by order in Appln. No. 949 of 1982 and, by order dated 9 July 1982 (in Appln. No. 2283 of 1982), was directed to take steps to sell the vessel and report to the court.

The appellant said he was appointed Chief Engineer of the vessel by a letter dated 4 September 1981 (effective 7 September 1981). His contract fixed salary at Rs. 5,000 per month, entertainment allowance Rs. 2,000 and welfare allowance Rs. 2,000 (tax free), aggregating Rs. 9,000 per month. He alleges payment continued only up to 18 October 1981; thereafter the defendants ceased payments. He resigned on 3 November 1981 but was not signed off or relieved until 17 May 1982; his papers were with the Master, preventing him from joining other employment. He claims seven months' unpaid salary totalling Rs. 63,000 and asserts a first charge over the defendant's assets, including the vessel.

The appellant filed Appln. No. 2554 of 1982 in the suit asking that Rs. 63,000 be directed to be paid to him from the sale proceeds of the vessel. Shanmukham, J. dismissed the application in limine as not maintainable by order dated 12 August 1982. The appellant appealed against that dismissal.

Legal Issues Presented

  1. Whether the expression "proceeding" in S.146 of the Merchant Shipping Act, 1958, can include an interlocutory application filed in an already instituted suit (rather than only an independent civil suit).
  2. Whether a seaman (the appellant) may, under S.146(b) of the Act, secure recovery of wages by making an application in proceedings already instituted by a third party (the plaintiff) to realise the charged vessel, and thereby claim priority from the sale proceeds.
  3. Whether the principle that the plaintiff is dominus litis bars a third party from seeking relief by way of an interlocutory application in a suit instituted by the plaintiff, where the third party's claim is independent of the plaintiff's cause of action.

Arguments of the Parties

Appellant's Arguments

  • The appellant is a seaman (Chief Engineer) entitled to wages and related allowances totalling Rs. 63,000 for seven months, which remain unpaid.
  • His claim is preferential (a first charge) over the assets of the defendant, including the vessel, and should be satisfied prior to the plaintiff's appropriation of sale proceeds.
  • Under S.146 of the Merchant Shipping Act, 1958, a "proceeding" for recovery of seamen's wages need not mean a regular independent suit; it can be an interlocutory application in a suit already before the court or an independent original application. Counsel relied on S.145, S.146 and S.150 and argued that S.3(31) (definition of "proceeding" for Ss.178–183) supported a broad meaning.

Respondent's (Plaintiff's) Arguments

  • Mr. T. Raghavan, for the plaintiff, disputed that the appellant was a seaman, that amounts were due, and that the appellant's claim must be settled before the plaintiff could appropriate the sale proceeds of the vessel.
  • It was argued (and the learned single Judge held) that S.146's use of "proceeding" does not envisage that the remedy sought by the appellant can be obtained by an interlocutory application in a suit already filed by the plaintiff; the appellant's remedy is by a civil suit.
  • The plaintiff also invoked the principle that the plaintiff is dominus litis and ordinarily the court should not bring in a third party or permit a third party to advance independent claims in the plaintiff's suit without well‑accepted grounds for doing so.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The appellate court proceeded to examine the construction of Ss. 145 and 146 of the Merchant Shipping Act, 1958, and related provisions. Because the learned single Judge dismissed the application on principle (construction of the Act) without addressing the factual merits, the appellate court limited its review to legal principles and assumed, for the purpose of legal analysis only, the facts as alleged by the appellant.

The court observed:

  • S.145 prescribes a summary remedy before a magistrate for recovery of wages.
  • S.146 restricts instituting proceedings in civil courts for recovery of wages except in certain contingencies listed in clauses (a)–(c) (owner declared insolvent; ship under arrest or sold by court authority; magistrate refers claim to the court).
  • The learned Judge's reasoning focused on the meaning of the word "proceeding" in S.146 and concluded it did not include an interlocutory application in a suit already instituted by a third party.

The appellant's counsel argued that "proceeding" need not mean a regular suit and could include an application in an existing suit; he relied in part on S.3(31) (which defines "proceeding" for Ss.178–183 as including suit, appeal or application). The appellate court rejected reliance on S.3(31) to interpret S.146 because S.3(31) was incorporated specifically for the purposes of Ss.178–183 and therefore did not definitively define "proceeding" in S.146.

The court consulted Stroud's Judicial Dictionary and recorded that "proceeding" can mean a step in an action. Applying that ordinary meaning, the court held that "proceeding" in S.146 can include steps or applications taken before a court (not necessarily only an independent suit), provided the step is backed by substantive and procedural law.

The court further analysed the contingencies in S.146:

  • Clause (a) (insolvency) contemplates proceedings in insolvency, not necessarily a civil suit;
  • Clause (c) (magistrate referral) contemplates a magistrate referring claims to a court;
  • Clause (b) (ship under arrest or sold by court authority) presupposes court action by a third party;

From this scheme the court concluded that the statutory framework does not compel a seaman always to file an independent civil suit and that, in appropriate cases, the remedy may be pursued by steps in aid of existing proceedings instituted by others (for example, an interlocutory application in a suit under which the vessel is being sold).

The court acknowledged the principle that the plaintiff is dominus litis and that normally a court should not bring in a person over the plaintiff's objection to adjudicate independent claims. However, the court observed well‑accepted exceptions to this rule and held that in the present circumstances the appellant's application was not one for being added as a party to litigate an independent claim at the trial stage (the suit had already been decreed on compromise). Rather, the appellant sought to protect an alleged preferential claim over sale proceeds arising in enforcement of the decree. Consequently, the strict rule about addition of parties did not strictly apply.

The court emphasised that allowing the appellant to seek satisfaction of his alleged preferential claim out of the sale proceeds would not necessarily upset the decree in favour of the plaintiff; instead, the Act contemplates procedures to resolve such claims in aid of enforcement proceedings. The appellate court therefore found that the single Judge's construction was unduly restrictive.

Holding and Implications

Holding: The appeal is allowed. The order of the learned single Judge dismissing Appln. No. 2554 of 1982 is set aside and the application is remitted to the Original Side judge to be taken up and disposed of afresh on merits after affording all parties an opportunity to be heard. There is no order as to costs.

Implications (direct, as reflected in the opinion):

  • The court construed S.146 of the Merchant Shipping Act to permit, in appropriate cases, a seaman to pursue recovery steps by way of an interlocutory application in proceedings already before the court (for example, proceedings for the sale of a charged vessel), rather than always requiring an independent civil suit.
  • The appellate court did not decide the factual questions (e.g., whether the appellant is a seaman, whether amounts are due, or whether his claim is entitled to preference); those matters were reserved for determination on merits by the single Judge on remand.
  • The decree in favour of the plaintiff was not set aside by this order; the matter was remitted so that the appellant's application can be adjudicated consistently with the Act and after hearing all parties.

This summary is based exclusively on the reasoning and outcomes contained in the provided opinion.

    P. Udaya Shankar By Power Of Attorney Agent, B. Perumal v. Andhra Bank And Others

    Nainar Sundaram, J.

    1. The appellant is a third party to the suit C.S No. 110 of 1981 on the file of the Original Side of this Court. The first respondent is the plaintiff and respondents 2 to 4 are the defendants in the suit. The plaintiff filed the suit for recovery of a sum of Rs. 43,40,015.83 due to it from the defendants. The plaintiff claimed a charge for the aforesaid dues over the vessel ‘M.V Fareeda’. We find that there was a compromise and the suit was decreed as per the compromise on 13th March, 1981. A reading of the relevant clauses in the decree in the suit leaves no room for doubt that the paramount charge of the plaintiff over the vessel ‘M.V Fareeda’ was countenanced; the said charge has been held to remain in force till the decree dues are paid in full, and the plaintiff has been given the liberty to execute the decree against the said vessel charged. The plaintiff itself has been appointed as a Receiver of the vessel by order passed in Appln. No. 949 of 1982. The plaintiff took out Appln. No. 2283 of 1982 and direction has been given by this Court on the Original Side to the plaintiff to take steps to sell the vessel and report the matter to the court by order, dated 9th July, 1982. The appellant claims as follows: He was appointed as the Chief Engineer of the vessel ‘M.V Fareeda’ owned by the first defendant, by the letter of appointment, dated 4th September, 1981. The appointment was with effect from 7th September, 1981. As per the terms of the appointment, his salary was fixed at Rs. 5,000 per month, entertainment allowance of Rs. 2,000 per month and a welfare allowance of Rs 2,000 per month-all tax free. The appellant was paid salary and other allowances referred to above till 18th October, 1981. Thereafter, the first defendant did not pay the salary and other allowances. The appellant sent his resignation on 3rd November, 1981. The first defendant did not arrange for his ‘signing off’ and relieve him. The first defendant has not paid the amounts due to the appellant and has not accepted his resignation and arrange for the ‘sign off’ till 17th May, 1982. The papers of the appellant were with the Master of the vessel. Hence, the appellant could not join any other employer also. In the meanwhile, the appellant came to know about the suit filed by the plaintiff against the defendants for recovery of a sum of Rs. 43,40,015.83, and hence the appellant caused a notice to be issued through his counsel on 5th May, 1982, to the plaintiff with copies to the defendants, calling upon the plaintiff to permit the appellant herein to ‘sign off’ under protest within a week from the date of receipt of the said notice and hand over the papers of the appellant available in the vessel, and to intimate the appellant as soon as the sale proceeds of the vessel were deposited into court and also to intimate to the court as the Receiver, about the appellant's claim. The plaintiff, after receipt of the notice, has sent a reply through its lawyer on 11th May, 1982. Ultimately, the first defendant addressed a letter to the shipping Master, Tuticorin, on 13th May, 1982, requesting the shipping Master to arrange to ‘sign off’ the appellant and marked a copy of it to the appellant. The appellant was permitted to ‘sign off’ on 17th May, 1982, by the Shipping Master, Tuticorin Port Trust. The appellant is entitled to the salary and allowances at the rate of Rs. 9,000 per month as per the details given above, for a total period of seven months, and the dues amount to Rs. 63,000 recoverable from the defendants and this amount represents the salary payable to a crew of the vessel, viz., the appellant herein. The appellant has got a first charge over the assets of the first defendant, including the vessel ‘M.R Fareeda’. Even though the plaintiff is a charge decree-holder, yet, the appellant's salary and other dues will have to be settled before the plaintiff could appropriate the sale proceeds of the vessel.

    2. On the basis of the above allegations, the appellant filed Appln. No. 2,554 of 1982 in the suit, praying for a direction to the plaintiff to pay the sum of Rs. 63,000 to the appellant from and out of the sale proceeds of the vessel ‘M.V Fareeda’ as and when realised. Shanmukham, J. by order, dated 12th August, 1982 has dismissed the application in limine as not maintainable and that is how the appeal has come to be preferred by the third party.

    3. We find that no specific provision of law as such has been quoted in the Judge's summons, except referring to the procedural rules of the Original Side and S. 151, C.P.C But, we find that before the learned Judge, the claim of the appellant was sought to be sustained under S. 146(b) of the Merchant Shipping Act, 1958, hereinafter referred to as the Act. Mr. V. Sridevan, learned counsel for the appellant, advanced his submissions only on the basis that the claim of the appellant could be countenanced by way of an application in the suit itself under the aforesaid provision. The learned Judge considered the provisions of Ss. 145, 146 and 150 of the Act and opined that the expression ‘proceeding’ occurring in S. 146 of the Act does not envisage that the remedy as claimed by the appellant can be obtained by means of an interlocutory application in the suit already filed by the plaintiff herein, and the appellant has got his remedy in a civil suit. Exception is taken to this reasoning of the learned Judge and hence we feel obliged to examine the position with reference to the concerned provisions of the Act so as to find out as to what could be the impart and implications thereof and as to whether S. 146(b) in particular, on the facts and circumstances of the case, will enable the appellant to maintain an interlocutory application in the suit already laid by the plaintiff and in which a decree has ensued and further steps for realisation of the decree dues have been taken by the sale of the vessel.

    4. Since the learned Judge has dismissed the application of the appellant without going into the merits of the case, but on principle and on a construction of the provisions of the Act, we are proceeding to examine the matter only with regard to the principles involved and without reference to the merits of the case. This, we are constrained to set out, because Mr. T. Raghavan, learned counsel appearing for the plaintiff, does dispute the claim of the appellant that he is a seaman, that amounts are due to him and that his claim will have to be settled first before the plaintiff could appropriate the sale proceeds of the vessel, in respect of which it has obtained a charge decree. For the purpose of deciding the moot question, we are assuming that the allegations put forth by the appellant in his affidavit filed in support this application are correct. This assumption is only for the limited purposes of investigation of the legal aspect and it shall not be taken that we have concluded the question of fact.

    5. Certain provisions of the Act require reference, though not a detailed study of the same. S. 139 lays down that the right of the seaman to recover wages and salvage is not to be forfeited by any agreement. S. 148 states that the Master of a ship shall, so far as the case permits, have the same rights, liens and remedies for the recovery of his wages as a seaman has under the Act or any law or custom. Special provisions for the protection of seaman respect of litigation have been made in the Act by incorporation of Ss. 178 to 183 in Part VII of the Act. Ss. 145 and 146 are found under the caption mode of recovering wages’, occurring in Part VII of the Act and they read as follows—

    “145(1). A seaman or apprentice or a person duly authorised on his behalf may, as soon as any wages due to him becomes payable, apply to any Magistrate exercising jurisdiction in or near the place at which his service has terminated, or at which he has been discharged, or at which any person upon whom the claim is made is or resides, and the magistrate shall try the case in a summary way and the order made by the magistrate in the matter shall be final.

    (2) Any application under sub-S. (1) may also be made by any officer authorised by the Central Government in this behalf by general or special order.

    146. A Proceeding for the recovery of wages due to a seaman or apprentice shall not be instituted by or on behalf of any seaman or apprentice in any civil court except where—

    (a) the owner of the ship has been declared insolvent;

    (b) the ship is under arrest or sold by the authority of any court;

    c) a magistrate refers a claim to the court.”

    A detailed study of the special provisions for the protection of seaman in respect of litigation adumbrated in S. 178 to 183 of the Act will not be helpful for deciding the question raised in the present appeal. The said provisions do not, by themselves, circumscribe or prescribe any limitation as to the nature and scope of the steps a seaman could take for recovering his wages. S. 145 prescribes a summary remedy before the magistrate having jurisdiction as set out in that provision. S. 146 enables a seaman to take steps for recovery of wages due to him provided that contingencies contemplated therein are satisfied We are not called upon to adjudicate the question as to whether the contingencies contemplated in S. 146 of the Act have come into play or not, because the learned Judge has not dismissed the application of the appellant on any such reasoning. The reasoning that weighed with the learned Judge is that the expression ‘proceeding, occurring in S. 146 could not take in an interlocutory application in the suit already laid by the plaintiff and the appellant has got his remedy in a civil suit.

    6. Mr. V. Sridevan, learned counsellor the appellant, made his submissions that the expression ‘proceeding’ S. 146 need not necessarily mean a regular suit, the filing of which may involve the payment of court fee on an ad valorem basis and it can take the form of an application in the present suit itself or an independent original application. Our construction of the provision also leads us to hold that the expression ‘proceeding’ occurring in S. 146 of the Act need not necessarily mean a regular suit and it can take in the form of an interlocutory application in an already instituted suit or an independent original application for the reliefs available to the seaman. S. 3(31) of the Act defines ‘proceeding’ in relation to Ss. 178 to 183 (inclusive) as including any suit, appeal or application. Learned counsel for the appellant contends that this provides an indicant that the expression ‘proceeding’ occurring in S. 146 of the Act will normally have to be construed as excluding a suit and the relief sought for by the seaman can be secured by taking a step in aid in the suit already instituted by a third party. There is a fallacy in this sort of construction of the provision because S. 3(31) not only refers to a suit but also appeal or application. Hence, it is not safe to fall back upon S. 3(31) to find out the true meaning of the expression ‘proceeding’ occurring in S. 146 of the Act. Ss. 178 to 183 have got a definite purpose to serve and in order to avoid any ambiguity and obviate an argument that the expression ‘proceeding’ occurring in Ss. 178 to 183 will not refer to any suit or appeal or application S. 3(31) has been incorporated. In this view, we do not find any support from S. 3(31) of the Act, for construing the expression ‘proceeding’ occurring in S. 146 of the Act. This obliges us to fall back upon the normal meaning that could be attached to the expression ‘proceeding.’ We find the following meaning to the expression ‘proceeding’ in Stroud's Judicial Dictionary, 4th Edn. volume 4 at page 2124—

    “Any proceeding: (Judicature Act, 1873 C. 66. S. 89) is equivalent to ‘any action’ and does not mean any step in an action …‘proceeding’ is used as meaning a step in an action.”

    7. In our view, ‘proceeding’ with regard to a party vis-a-vis a court of law includes all and every step or action taken before and/or all or every paper, document, or record presented or filed in such a court of law by such party with the object of advancing a case of his to obtain the desired relief or reliefs. Of course, it does not require reiteration that such ‘proceeding’ must have the backing of substantive as well as procedural law. The very clause in S. 146 also throws light on this question. Cl. (a) refers to the contingency, when the owner of the vessel has been declared insolvent. In such a case, a claim proceeding in insolvency may suffice the purpose and not necessarily a civil suit by the seaman for recovery of his wages. Cl. (c) contemplates reference of the claim itself to the court by the Magistrate. Hence there will not be a necessity to file a civil suit. Cl. (b) contemplates the contingency where the vessel is under arrest or sold by the authority of any court. This necessarily presupposes an action to this effect already taken by a third party in a court. Hence to state that a seaman should always resort to the remedy of an independent civil suit does not fit in with the scheme of the provisions. It is true that the marginal note to S. 146 of the Act speaks about ‘restrictions on suit for wages.’ We do not think that we should refer to the well accepted propositions as to how far courts should fall back upon marginal notes for construing the substantive provisions in the statute. Marginal notes can afford little guidance to the construction of enactments especially when the language is plain and unambiguous, as we find in the case of S. 146 of the Act. The highest court in the land has also frowned upon attempts to derive assistance for statutory constructions from the marginal notes. Hence the expression ‘proceeding’ found in. S. 146 of the Act cannot be bound down to have a restricted meaning of a regular suit alone. In this view, we are not able to lend our support to the reasoning of the learned Judge that S. 146 of the Act does not envisage that the remedy sought for by the appellant could be obtained by means of an interlocutory application in a suit already instituted by the plaintiff, and the appellant has got his remedy in a civil suit.

    8. This does not bring a total solution to the problem raised in this appeal, because Mr. T. Raghavan, learned counsel for the plaintiff, would still covet sustenance of the order passed by the learned Judge, putting forth the principle that the plaintiff is the dominus litus and in the absence of well accepted grounds for bringing in a third party, like the appellant, into the suit for vindication of his rights, which are alien to the controversy in the suit, the appellant cannot be permitted to resort to the remedy of an interlocutory application in the present suit for the reliefs claimed by him. The normal rule is, the court should not bring in a person in a suit when the plaintiff is opposed to such addition, the reason being, the plaintiff is the dominus litus. But there are well accepted exceptions to this rule. The facts being what they are in the present case, we need not necessarily dwell on this question from the angle that the plaintiff being the dominus litus, no third party need be brought into the suit to adjudicate independent claims of his. Strict speaking, the step or the application taken out by the appellant is not one for bringing himself on record as a party to the suit to have adjudication of his claim in the suit. The suit has passed the stage of adjudication. It has ended in a decree on a compromise and the decree secures the interests of the plaintiff recognising the charge claimed by it over the vessel and further, enabling it to have the decree dues realised out of the sale proceeds of the charged vessel. The question of any suit pending so as to invoke the general principles under O. 1, R. 10, C.P.C does not, in strict terms, arise at all in the present case. In enforcement of the reliefs secured to it by the decree in the suit, the plaintiff is the Receiver appointed by the court in bringing the vessel to sale. The appellant, the third party, on the basis that be is a seaman invoking the aid of S. 146 of the Act, who wants to have his claims for recovery of wages satisfied out of the sale proceeds of the vessel, has taken out the application concerned. Of course, the question as to whether the appellant will have to get satisfaction of his claims out of the sale proceeds of the vessel first in preference to those of the plaintiff will have to be decided at this stage and the decree which has enured in favour of the plaintiff will not necessarily be upset by this process. The strict rule of addition of parties to a suit and the adjudication of Ms independent claims will not come into play on the facts and circumstances of the case. The specific provision in the Act enables a seaman to resort to such a process and such a process need not necessarily be on independent civil suit or any other independent and separate proceeding and in appropriate cases, it could be a step in aid in proceedings already pending at the instance of another party like the plaintiff in the present case. That is the ambit of the provision and it would be a travesty of justice to hold that a party like the appellant, who claims himself to be a seaman putting a preferential claim for realisation of his wages from and out of the sale proceeds of the vessel, should be denied the right and the Opportunity to come at this appropriate stage in the proceedings already taken for the sale of the vessel to put forth his alleged preferential claims. It would be also inequitable and not in accordance with the scheme of the provisions in the Act to drive him to an independent civil suit or any other independent and separate proceeding and definitely, to keep the nexus between the two proceedings for a comprehensive adjudication of the controversy as a whole will present difficulties.

    9. For all these reasons, the appeal is allowed, the order of the learned Judge in Appln. No. 2554 of 1982 is set aside and the said application will stand remitted back to the file of the learned single Judge on the Original Side of this Court for him to take up the same and dispose of it afresh on merits after affording an opportunity to all the parties concerned to make their say in the matter. There will be no order as to costs in this appeal.

    VCS.

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    P. Udaya Shankar By Power Of Attorney Agent, B. Perumal v. Andhra Bank And Others
    (Nov 25, 1982)