P L D 2022 Balochistan 21
Before Muhammad Ejaz Swati and Zaheer- ud-Din Kakar, JJ
EDUARD BILYAYEV through Attorney and 4 others ---Appellants
Versus
M.V. "FIGARO" (EX- FREE GODDESS) through Messrs Commercial Metal ---
Respondent
Admiralty Appeals Nos. 1 and 2 of 2018, decided on 23rd November, 2020.
Admiralty Jurisdiction of High Courts Ordinance (XLII of 1980) ---
----Ss. 3, 4 & 7 ---Civil Procedure Code (V of 1908), O.VII, R.11---Action in rem ---Scope ---
Rejection of plaint--- Sale of ship ---Appellants/ plaintif fs sought recovery of outstanding
wages from respondent/ defendant company on the plea that it was beneficial owner of ship
in question ---Trial Court rejected plaint filed by appellants/ plaintiffs for the reason that the
ship had already been sold---Valid ity---Action in rem could be invoked against ship or
property against which maritime lien was claimed by plaintiff ---Maritime lien was a
privileged claim which could be exercised over res (ship) ---Such claim occurred the moment
cause of action had arisen and travelled with the res (ship) secretly and unconditionally and could be enforced by an action in rem ---Such right only extinguished when ship was
demolished --- Action in rem against ship or her sister ship arose subject to condition
enumerated in S. 4(4) of Admiralty Jurisdiction of High Courts Ordinance, 1980---Purchaser/vendee of ship filed application under O. VII, R. 11, C.P.C. along with bill of sale, whereby ship in question was owned/purchased through a leasing company free from all encumbrances ---Sale document was not denied specifically by appellants/plaintiffs at the
time when suit was filed --- Beneficial title in ship in question was passed on to new owner
and condition laid down by S. 4(4) of Admiralty Jurisdiction of High Courts Ordinance, 1980, was not satisfied ---High Court declined to invoke action in rem against the ship,
particularly when the ship had been demolished--- Appeal was dismissed, in circumstances.
PLD 1986 Quetta 107; 2005 YLR 2838; PLD 2006 SC 214; PLD 2000 Kar. 258; PLD
1996 Kar. 365; PLD 2000 Kar. 691; 2003 CLC 1602; 2013 MLD 1132; PLD 1990 SC 859;
1995 SCMR 584 and AIR 1922 P.C. 269 ref.
1989 CLC 2168; 2012 SCMR 123; Hong Leong Finance Limited v. m.v. Asian Queen
through Nazir High Court PLD 1991 SC 1021; Atlantic Steamer' s Supply Copmany v. m.v.
Titisee and others PLD 1993 SC 88; Inham Refrigeration b.v. v. The owners of "F.T. Parivash and Transocen Holdings Ltd. PLD 1989 Kar. 65; Messrs Maratos and Co. v. Rice Traker and 2 others PLD 1989 Kar. 94; Semco Salvage Pte Limite d v. m.v. Kaptan Yusuf
Kalkavan Turkish and another 1995 MLD 706; Azhar Ahmad Khan and others v. M.V. and 3 others PLD 1985 Quetta 278; Metal Construction of Greece S.A (Mekta S.A), Athens through Attorney v. Owners of the Vessel m.v. Lady Rea 2013 CLD 1829; Jaffer Brothers
(Pvt.) Limited v. m.v. 'Eurobulker II' presently Brethed at Moorings in Karachi Port to be
served through Master 2002 CLD 926; Messrs Khadija Edible Oil Refinery (Pvt.) Ltd. v. m.v. "Glaxy" and 4 others 2011 CLD 709 and Messrs Sun Line A gencies Ltd. v. Vessel M.V.
"Psilorities" and 2 others 1984 CLC 1553 rel.
Muhammad Riaz Ahmed and Dr. Adeel Abid for Appellants (in Admiralty Appeals
Nos. 1 and 2 of 2018).
Mujeeb Ahmed Hashmi for Respondent (in Admiralty Appeals Nos. 1 and 2 of 2018).
Date of hearing: 2nd November, 2020.
JUDGMENT
MUHAMMAD EJAZ SWATI, J .---The question involve in the above appeals are
almost common as to the facts and arising out of the same judgment, it is, therefore, consider proper to that with together and to dispose them of by this Judgment.
2. The above appeals have been filed by the appellants/plaintiffs against the judgment
dated 11th June, 2018 (the impugned judgment), whereby on application under Order VII, Rule 11, Civil Procedure Code (C.P.C.), the suit s filed by the appellants were rejected.
3. To facilitate consideration of question involved in this appeal, it is necessary to deal
with Admiralty Appeals Nos.1 and 2 of 2018 and the conclusion arrived on the basis of contention raised by the either couns el will be applied to both the appeals.
4. The facts of the Admiralty Appeal No.1 of 2018 (Admiralty Suit No.03 of 2017) are
that the FIGARO NORGE AS (FIGARO Maritime Limited) registered and beneficial owner of the respondent vessel. The appellants/plainti ffs averred that they provided service to the
owner of the vessel as per terms and conditions of the agreement executed with the Managing agent, but their wages have not been paid until March to June, 2016. They also got a guarantee letters from the owner of vessel that their outstanding dues would be paid by the end of June, 2016, but the Owners/Managers of the vessel failed to make the payments within the specified time and issued declaration letter on 20th December, 2016 and assured that the owners would settle crew wages shortly. The appellants in Admiralty Appeal No.1 of
2018 (Admiralty Suit No.03 of 2017) claimed recovery of outstanding salary for their services on board, the vessel as following.
Sr.
No. Rank Seamen with
Nationality Sign On Sign Off Total
Outstanding Amount in
US$
1. MASTER Eduard
Bilyayev
(Ukrainian) 07-08-2015 28-03-2016 35,852.70
2. 2/ENG Ivonov Valeriy
(Ukrainian) 23-11-2015 25-06-2016 30,288.21
3. 2/OFF Rusanzhyk
Vyacheslav
(Ukrainian) 04-06-2015 28-03-2016 29,175.88
4. 3/OFF Kochegurov
Oleg
(Ukrainian) 25.03.2015 25.06.2016 29,470,53
5. 3/OFF Topolenko
Andriy
(Ukrainian) 04.06.2015 25.06.2016 21,276,68
Total 146, 064
It is contended that the owner of the vessel M.V. FIGARO failed to settle the genuine
claims of the appellants.
5. The facts of the Admiralty Appeal No.2 of 2018 (Admiralty Suit No.05 of 2017) are
that he served the respondent's vessel and provided his services as per terms and conditions
of the employment from December, 2014 to April, 2015 and he had also got a guarantee
letter from the owners that his outstanding dues of US$ 51,297.30 would be paid within April 2015. The appellant received only two part payments for US$ 4,993.00 on 11th September, 2015 and US$ 2,697.20 on 31st December, 2015 from the M/s Adventure Five SA, but the owners of vessel M.V. FIGARO failed to settle the genuine claims of the appellant and the appellant claimed for balance amount of US$ 43,607.10, as his outstanding salary for his service rendered on board the vess el.
6. The respondent was owned by M.V FIGARO, however, when a notice was served
upon the respondent, M/s Commercial Metal made appearance and claimed to be the owner/purchaser of the vessel and in both the suits filed application under Order VII, Rule 11, C.P.C. for the rejection of the plaint. The learned Single Judge of this Court vide
Impugned Judgment dated 11th June, 2018 accepted the application and rejected the plaint as mentioned hereinabove.
7. The impugned judgment has been passed on 11th June, 2018, while the above appeals
were filed on 20th August, 2018 after two months of the impugned judgment. The learned counsel for the appellants while addressing arguments with regard to delay, contended that the impugned judgment has been passed without iss uance of notice to appellants' attorney
and his counsel; that the counsel of the appellants was based at Karachi and after getting knowledge about the impugned judgment applied for the certified copy of the order and
according to the learned counsel the li mitation will run from the date of knowledge. In this
respect reliance has been made on case reported in PLD 1986 Quetta 107, 2005 YLR 2838, PLD 2006 SC 214.
On the applicability of Civil Procedure Code (C.P.C.), the learned counsel for the
appellants pla ced reliance on case reported in PLD 2000 Karachi 258.
It is further contended that Order XX (1) (2) of C.P.C. also mandates due notice to the
parties in accordance with section 142, C.P.C. and in this respect reliance has been placed on
case reported in 2005 PLD 2823(sic.).
It is contended that the affidavit along with condonation application filed by the
counsel for the appellants is not rebutted as no counter affidavit in time had been filed,
therefore, the contents of the supporting affidavits filed b y the plaintiff or his counsel have
gone un- rebutted. In this respect reliance has been placed on case reported in PLD 1996
Karachi 365, PLD 2000 Karachi 691 and 2003 CLC 1602 and 2013 MLD 1132.
It is contended that parties should not suffer due to any wr ong
committed by office of the Court and in support of his contention, he placed reliance on
case reported in PLD 1990 SC 859, 1995 SCMR 584, AIR 1922 P.C. 269, wherein it was observed that act of Court shall prejudice no man.
It is contended that the appellants have filed an application under section 5 of the
Limitation Act, 1908 read with section 151, C.P.C., which is applicable under the circumstances of the case to provide substantial justice by using their inheritance power to prevent the abuse of process of law, that is admiralty Suit No. 2 of 2017 the identical claim had been accepted/settled by the owners after arrest of the respondent vessel and outstanding wages of five Myamar seafarers were settled by Messrs Gulf Agency Co. who were acting as vessel's agency in Oman, where the vessel was auctioned and the payment was executed by
Gulf Agency on 9th October, 2019 and the same was received by the seaman on 11th October, 2017 through their Manning agents at Yangon. Consequent, whereof the Admiralty Suit No.2 of 2017 was withdrew vide order dated 8th January, 2018.
8. On merits, it is contended that the sale of M.V Figaro to Messrs Commercial Metal is
a fictitious and fabricated transaction, which is done to evade the vessel's lawful creditor; that the vessel had been sold in order to escape liability of its creditors; that the claim of appellants for Maritime lien has high priority under Admiralty law, which cannot be extinguished, though the ownership of the vessel may change into the hands of a bona f ide
purchaser, it will continue at all cost until the claim is satisfied; that Maritime lien is considered as a charge upon the maritime property and will continue until satisfied the claim by the owner or purchaser for value with or without notice. He pla ced reliance on case
reported in PLD 1993 SC 88; that letter of guarantee was issued by the respondent to the appellants and assured/agreed to pay the outstanding dues to the appellants, but learned Judge has overlooked section 4(3) of Admiralty Jurisdicti on of High Courts Ordinance, 1980,
thus has not protected the interest of crew member of their/his outstanding wages as the claim maritime lien travels with res i.e. vessel, in support of his contention reliance has been placed on 1989 CLC 2168.
It is contended that maritime lien remained attached to all parts of vessel even after
demolition and seaman claim cannot extinguish on that ground. In this respect he placed reliance on case reported in PLD 1991 SC 1021, PLD 1985 Quetta 278.
Learned counsel wh ile concluding his arguments contended that law favour
adjudication on merit and not on technicalities, but the instant matter has been decided
without affording opportunity to the appellants for recording their evidence, therefore, the
impugned judgment i s liable to be set -aside and case be remanded to the learned Single
Judge for Adjudication on merits.
9. Learned counsel for the respondent/purchaser contended that appeal is barred by time
and in absence of sufficient cause a right had been accrued in fav our of the other party,
therefore, appeal is liable to be dismissed.
10. On merits, it is contended that at the time of filing the suit or accrued of cause of
action, the respondent was not the owner of the ship and the instant claim was not attached with the ship; that M/s Commercial Metal is bona fide purchaser and when it was purchased
was not fall in the definition of ship; that at present vessel is demolished, therefore, claim in rem has been extinguished.
11. We have heard the learned counsel for the parties in both appeals and perused the
record of the case. The impugned judgment was passed by the learned Single Judge of this Court in exercise of admiralty jurisdiction of High Courts Ordinance, 1980 on 11th June, 2018 and above appeals had been fi led on 20th August 2019. Section 6 of the Ordinance
provides that appeal shall be preferred within the thirty days from the date of judgment or order appeal against.
12. The above appeals are barred by one months and eight days. The learned counsel for
the appellants contended that the admiralty Court heard the arguments of the parties on
application under Order VII, Rule 11, C.P.C. on 9th March, 2018 and reserved the matter for order and being Karachi based Advocate, he from time to time also inquired about the status
of the case through registered court clerk in Quetta till 28th July 2018. It is further contended that he came to know about the impugned judgment on 3rd August, 2018, when in Sindh High Court he met with the associate counsel for the responde nt and due to non- receiving of
notice about the announcement of judgment the appellants had not to be prejudiced.
13. The application for condonation of delay in filing appeal coupled with affidavit of the
learned counsel for the appellants manifest that d ue to non- issuance of notice for
announcement of the judgment, he was unaware about the announcement of impugned judgment and later on, on 3rd August, 2018 he came to know about the same and certified copy of the judgment was applied on 4th August 2018 and received the same on 15th August,
2018, while instant appeals had been filed on 20th August, 2018. The record of the case not suggest contrary to the contents of the un- rebutted affidavit of the counsel for the appellants.
Considering the above issue in view of the judgment of the Hon'ble Supreme Court of Pakistan in case titled Mst. Yamin and 2 others v. Muhammad Yamin and 2 others (PLD 2006 SC 214), (2012 SCMR 123), there are sufficient, justifiable grounds exist for condonation of delay, therefore, in t he peculiar circumstances of the case delay in filing
appeals is condoned.
Before proceeding further, it is advantageous to refer the provision of relevant
sections 3, 4 of the Admiralty Jurisdiction of the High Courts Ordinance, 1980 (the Ordinance).
"3. Admiralty jurisdiction of the High Court.---(1) The Sindh High Court and the High
Court of Balochistan shall have and exercise , within their respective territorial
jurisdiction, Admiralty jurisdiction as is in this respective territorial jurisdiction, Adm iralty jurisdiction as is in this Ordinance, provided and the Lahore High Court
and the Peshawar High Court shall, within their respective territorial jurisdiction have and exercise the said jurisdiction in cases in which any question or claim relating to aircraft is to be determined.
(2) The admiralty jurisdiction of the High Court shall be as follows, that is to say, jurisdiction to hear and determine any of the following causes, questions or claims.
(n) any claim by a master or member of the crew of a s hip for wages and any claim by
or in respect of a master or member of the crew of a ship for any money or property which, under any of the provisions of the Merchants Shipping Acts, or the Merchant Shipping Act, 1923 (XXI of 1923), is recoverable as wages or in the Court and in the manner in which wages may be recovered.
4. Mode of exercise of Admiralty jurisdiction.--(1) Subject to provisions of section 5, the Admiralty jurisdiction of the High Court may in all cases be invoked by an action in personam.
(2) The Admiralty jurisdiction of the High Court may in the cases mentioned in clauses (a) to (d), (I) and (r) of subsection (2) of section 3 be invoked by an action on in rem against the ship or property in question.
(3) In any case in which there is a mari time lien or other charge on any ship, aircraft or
other property of the amount claimed, the Admiralty jurisdiction of the High Court may be invoked by an action in rem against that ship, aircraft or property.
(4) In the case of such claim as is mentioned in clauses (e) to (h) and (j) to (q) or
subsection (2) of section 3, being a claim arising in connection with a ship, where the person who would be liable on the claim in an action in personam was, when the cause of action arose, the owner charterer of, or in possession or in control of the
ship, the Admiralty jurisdiction of the High Court may, whether the claim gives rise to a maritime lien on the ship or not, be invoked by an action in rem against.--
(a) that ship, if at the time when the action is brought it is beneficially owned as respects majority shares therein by that person; or
(b) any other ship which, at the time when the action is brought, is beneficially owned as aforesaid."
From the above it reveals that subsection (1) of Section 3 defines the territorial
jurisdiction of the High Court related to Admiralty jurisdiction, subsection (2) of section 3 enumerated the cause, question or claim in respect of which High Court shall exercise its jurisdiction.
14. The appellants have invoked their claim in terms of clause (n) of
subsection (2) of section 3 of the Ordinance in respect of their outstanding salaries for
their service on board the vessel. Statutory law could be invoked under section 4(4) of the
Ordinance, 1980 by invoking action in rem against the delinquent or offending ship or sister
ship when (i) the claim in the suit fall in any of the categories of clauses (e) to (h) and (j) to (q) of subsection (2) of section 3 of the Ordinance provided that the offending ship or delinquent ship at the time when cause of action accrued or suit filed is beneficially owned
by the person who is also the beneficial owner, where the action in rem is invoked. An action
in rem can be invoked against the ship or property against which maritime lien is claim ed by
the plaintiff. Maritime lien is a privileged claim which can exercise over the res (ship). It
occurs the moment cause of action arises. It travel with the res (ship) secretly and unconditionally. and can be enforced by an action in rem. It can only e xtinguish when the
ship is demolished, however, for action in rem against the ship or her sister ship arises subject to condition enumerated in subsection (4) of the Section 4 of the Ordinance. Reference in this respect is made to following cases.
Cases t itled Hong Leong Finance Limited v. m.v. Asian Queen Through Nazir High
Court (PLD 1991 SC 1021), Atlantic Steamer's Supply Company v. m.v. Titisee and others (PLD 1993 SC 88), Messrs Sun Line Agencies Ltd. v. m.v. "Psiloritis" and 2 others (1984 CLC 1553) , Inham Refrigeration B.V. v. The owners of F.T. Parivash" and "Transocen
Holdings Ltd (PLD 1989 Kar. 65), Messrs Maratos and Co. v. Rice Traker and 2 others (PLD
1989 Kar. 94), Semco Salvage Pte Limited v. m.v. Kaptan Yusuf Kalkavan Turkish and
another (1 995 MLD 706), Azhar Ahmad Khan and others v. M.V. and 3 others (PLD 1985
Quetta 278), Metal Construction of Greece S.A (Mekta S.A), Athens through Attorney v. Owners of the Vessel m.v. Lady Rea (2013 CLD 1829), Jaffer Brothers (Pvt.) Limited v. m.v. 'Eurob ulker II' presently Brethed at Moorings in Karachi Port to be served through
master (2002 CLD 926) and Messrs Khadija Edible Oil Refinery (Pvt.) Ltd. v. m.v. "Glaxy" and 4 others (2011 CLD 709).
In Messrs Sun Line Agencies Ltd. v. Vessel M.V. "Psilorities " and 2 others (1984
CLC 1553). It was observed as under: -
"I have carefully considered the provision of section 4 (4) of Ordinance XLII of 1980 and I am of the view that before an action in rem against a ship is instituted under the aforesaid provision of law, it must be shown that: (i) the claim in the suit falls in any one of the categories of cases mentioned in clauses (e) to (h) and (j) to (q) of subsection (2) of the section 3 of the Ordinance ; (ii) the claim arises in respect of a ship; and (iii) on the date of accrual of cause of action the person who would be liable in an action in personam was either the owner of charterer or in possession or in control of the ship. If all the above mentioned three conditions are shown to exist, then such a claim is also enforceable in an action in rem against that ship or any other
ship beneficially owned as respect the majority shares therein by that person on the date of filing of the claim in rem irrespective of the fact whether the claim gives rise to a marit ime lien on the ship or not under the Admiralty jurisdiction of this Court."
15. In the instant case appellants filed suit on 26th October, 2017 contending therein that
the respondent was owned at all material time FIGARO NORGE AS (FIGARO Maritime Ltd) who according to the appellants was beneficial owner of the vessel. The appellants were
employees of the respondent and were appointed through Messrs COSMOS Marine Management SA, the maiming agents of the respondent at Salalah Port, Oman. It is the claim
of appellants that they stayed on board without full payment of their dues until March- June,
2016 and owner/Manager issued a declaration letter on 20th December, 2016 stated therein
that owner will settle crew wages in due course. The purchaser/vendee filed an application
under Order VII, Rule 11, C.P.C. along with bill of Sale dated 29th August, 2017, whereby respondent was owned/purchased by Messrs Commercial Metal (leased through Askari
Bank) from AL LSEAS Holding Limited free from all encumbrance.
16. The above documents had not been denied specifically by the appellants, admittedly
at the time when the suit was filed. Beneficial title in the delinquent vessel/ship had been
passed on to the new owner and condition laid down by subsection (4) of section 4 of the Ordinance as aforesaid are not satisfied, the action in rem would not be sustainable, against the ship, particularly when the said ship had been demolished.
As a result of above discussion, no exception can be taken to the view taken by the
learned Si ngle Judge of this Court in the impugned judgment.
In view of the above, Admiralty Appeals Nos.1 and 2 of 2018 are dismissed. Parties
are left to bear their own cost.
Decree sheet be drawn.
MH/113/Bal. Appeal dismissed.This judgment is reproduced from a publicly available source for informational purposes and does not constitute legal advice. If you believe this listing contains an error,
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