053-NLR-NLR-V-72-NEW-INDIA-MARITIME-AGENCIES-PRIVATE-LTD.-of-Mdras-V.-THE-SHIP-BARUN-now-in-th.pdf
202
New India Maritime Agencies Private Ltd.
v. The Ship “Barun”
[Colonial Court op Admiralty of Ceylon]
1969Present: Siva Supramaniam, J.NEW INDIA MARITIME AGENCIES PRIVATE LTD, (of Madras)v. THE SHIP " BARUN ” (now in the Port of Colombo) et al.Action in rem No. 7 af 1968
Admiralty Court—Ship—Action in rem to enforce a claim Jot a sum of money—Jurisdiction—Requirement that the money claimed should be referable to supplyof necessaries—Balance due on a general mercantile account—Unenforceabilityof claim by action in rein—Right of mortgagees of ship to intervene in theaction—Admiralty Court Rules, Rule 7S.
Tho Colonial Court of Admiralty of Ceylon has no jurisdiction to entertain anaction in rem against a ship in respect of a claim for a sum of money unless thoamount claimed by the plaintiff is referable to tho supply of necessaries to thodefendant ship.
An action in rem for the supply of necessaries is not available to an agentagainst his principal when the sum claimed is based in fact on the balance duoon a , general mercantile account between tho parties. Tho fact that thoprincipal has consented to the ship being detained at any port until the agent’sdues are paid cannot affect the question whether tho claim is ono which isenforceable bj' an action in rem.
A mortgngoo of the ship against which an action in rem is instituted inentitled to intervene in the action and raise objections to the plaintiff’s claimagainst the ship, even when the owner of the ship has not appeared to contesttho plaintiff’s .claim.
This was an action in rem instituted by thepJaintiffs against a ship“ s.s. Barun ” in order to enforce a claim for a sum of money title on adecree obtained- by them in the High Court of Madras against theHindusthan Shipping Co. Ltd. of Bengal anti its Managing Director.The ship belonged to the Calcutta Steam Navigation Co. Ltd. TheHindusthan Shipping Co. Ltd. was the charterer by demise of the ship.Neither the owner nor the charterer entered an appearance to contest the
SIVA SUPKAMANJAM, J.—Xeu: India Maritime Agencies Private, Ltd. 203
f. The Ship “Barun”
plaintiffs’ claim in the action tnrem. But two mortgagees, viz. (1) TheDamodar Bulk Carriei-s Ltd. of Bombay and (2) The ShippingDevelopment Fund Committee of India, intervened as added-defendantsand moved for the release of the ship and the recall of the wanantof arrest.
H. W. Jayewardene, Q.C., with S. Mahadeva, Annesley Perera,
M.Devasagayam and Gamini Dissanayake, for the plaintiffs.
Ranganathan, Q.C., with K. N. Choksy, R. Gooneralne and C.Chandra.ha.san, for the 1st intervenient added party.
S. J. Kadirgamar, Q.C., with J. IK. Svbasinghe and E. B. Vahnitamby,for the 2nd intervenient added party.
Cur. adv. vull.
February 28, 19C9. Siva Sufkamaniam, J.—
This is an action in rem instituted by the plaintiffs against the “ s. s.Barun ”, which is now in the Port of Colombo, claiming a sum of Rs. 400,000on the ground that the said sum represents (a) the value of necessariessupplied by the plaintiffs and/or (6) monies advanced by the plaintiffsand utilised to procure necessaries for the defendant. On 2nd December1968 a writ of summons and warrant of arrest issued and on the same * .day the ship was arrested. The owners of the ship are the CalcuttaSteam Navigation Co. Ltd. and during the period relevant to the trans-actions set out in the petition the Hindusthan Shipping Co. Ltd. ofBengal (hereinafter referred to as the Hindusthan Co.) was the chartererby demise of the said ship. The documents relied on by the partiesdo not disclose whether the charter is still in- force or not. Neitherthe owner nor the charterer has entered an appearance to contest theplaintiff’s claim. But two mortgagees of the ship, viz., The ShippingDevelopment Fund Committee of India which is a first mortgagee ofthe ship for a sum of Rs. 1,600,000 and the Damodar Bulk Carriers Ltd.of Bombay which is a second mortgagee for a sum of Rs. 500,000, haveintervened and have moved for the release of the ship and the recallof the warrant of arrest.
It is contended on behalf of the mortgagees that this Court has nojurisdiction to entertain this action bj’ the plaintiffs and that the petitionshould be rejected. The contention is based on grounds both of factand law. It is therefore necessary to examine in the first instance therelevant facts as disclosed in the jietition of the plaintiffs and in thedocuments pleaded as part and parcel thereof.
The plaintiffs are a private limited liability company who carry onthe business of Liner and Chartering agents and ship brokers. FromSeptember 1964 to November 1967 the plaintiffs were the steamer agents
204 SIVA SUPRAMANIAM, J.—A’eiu India Maritime Agencies Private, Ltd.
v. The Ship “Barun”
of the Hindusthan Company “ for all necessary purposes of paying portsand customs dues and for all requirements of the vessel (s. s. Barun)and its master. ” According to the petition, during the aforesaid period,the plaintiffs expended a sum in excess of Rs.-405,000 in respect of (a)necessaries required bjr the defendant and/or (b) monies advanced andutilised to procure necessaries for the defendant.
In April 19GS tho plaintiffs instituted an action in personam in theHigh Court of Madras against the Hindustan Co. and its ManagingDirector claiming from them jointly and severally a sum of Rs. 420,421 96.On 22.G.196S they consented to judgment in a sum of Rs. 400,000. Theplaint and decree in the said caso have been pleaded as part and parcelof the petition in the instant case. That decree remains unsatisfied.In the present petition the plaintiffs have prayed for judgment in a sumof Rs. 400,000 and interest thereon at six per cent, per annum from thodate of the aforesaid decree. To the plaint in the said case was annexeda statement of account which disclosed an outstanding liability to theplaintiffs in a sum of Rs. 420,421-96 on the part of the Hindusthan Co.and its Managing Director. The said sum was made up of Rs. 396,947-99as principal and Rs. 23,473 97 as interest. A copy of the 'said account,though not filed by the plaintiffs along with the other documents attachedto the petition in the instant case, has been marked in evidence bylearned counsel for the second mortgagee (2D1A).
It is common ground that this Court has jurisdiction to entertainthe plaintiffs’ claim only if tho amount claimed or part thereof is due onaccount of either necessaries supplied to the defendant ship or moniesadvanced to procure necessaries for hor.
Ib is urged by learned Counsel for tho plaintilTs that the nature of theplaintiffs’ claim will be established by evidence that will be led at thetrial and that the question of jurisdiction based on the naturo of theplaintiffs’ chrim cannot be determined in limine without the plaintiffsbeing given an opportunity of placing their evidence. Learned Counselfor the second mortgagee submits, on the other hand, that his objectionis based on the facts contained in the documents annexed to the petitionand, consequently, the need to lead further evidence docs not. arise.
Tho plaint in the Madras case (Plo) which has been pleaded as partand parcel of the present petition sets out in detail the transactionsthe plaintiffs had with the Hindustan Co. in connection with the defendantship. The documents filed therewith establish beyond any doubt thatthe claim which the plaintiffs seek to enforce in these proceedings is theidentical one in respect of which decree was entered in tho Madrascase. But so long as that decree remains unsatisfied, it is no bar to thomaintenance of these proceedings, provided, however, it is established
SIVA SUPRAMANIAM, J.—New India Maritime Agencies Private, Ltd. 205
v. The Ship “ Uarun"
that tho amount claimed is referable to the supply of necessaries to thedefendant ship. (Vido tho judgment of tho President in The Celia 1and The Bengal 2.
According to para. 4 of P15, tho balance duo to the plaintiffs as at31st December 19CC on account of tho disbursements' made for thesupply of necessaries and “ for all requirements of the vessel ” wasRs. 71,045-74. Tho vouchers P2 to P14, filed with the petition in theinstant case, which related to tho disbursements during the aforesaidperiod (although erroneously described as statements of accounts fortho period September 1964 to 4th November 1967) showed the totaldisbursements to be Rs. 397,779 03, and the receipts to be Bs. 70,000.The statement of account 2D1A, however, discloses further receiptsduring that period exceeding a sum of Rs. 250,000 to which no referencehas been made either in the documents P2 to P14 or in the joetition.
The agreement entered into between tho plaintiffs and the HindusthanCo. in regard to the liquidation of the aforesaid debt of Rs. 71,045-74and in regard to further advances of money was set out in tho followingterms in para. 5 of PI 5 :—
" By May 1967 the 1st defendant company ran into financialdifficulties which affected their business. Thereupon, the seconddefendant, the Managing Director of the 1st defendant companyacting, as represented by him, under the authority and on behalf ofthe said company, approached the plaintiff company to lend financialassistance for the purposes of that company' and entered into anarrangement with the plaintiffs in and by which it was agreed betweenthem that—
Plaintiffs should advance to the 1st defendant company up to thelimit of Rs. Two Lakhs for the purposes oj the said company includingthe existing liability of Rs. 71,045-74 referred to above, for a periodof two years and the 1st defendant company was to give the plaintiffsa Demand Promissory Note for the said sum of Rs. Two Lakhs andthe said liability was to be progressively reduced.
The plaintiffs were to be irrevocabty' appointed and constitutedas the General Agents of the 1st defendant company throughout theworld to manage the employment and operations of the said vessels. s. Barun, fixing cargoes, collecting freights and making all kinds ofdisbursements.
The plaintiffs were to receive as their remuneration for theirservices the following commissions '
(a) Five per cent, on actual freight earnings plus one per cent
brokerage, on all export cargoes.
1 (18SS) 13 Probate S2 at p. 85.* Jurist Reports 11859) Vol. 5 p. 1085.
206 SIVA SUPRAMANIAM, J.—Xew India Maritime Agencies Private, Ltd.
v. The Ship “Barun”
Import Commission of ono per cent, on freight earnings as permanifest : and
A fixed sum of Rs. 2,500 for bulk cargoes consisting of fullshipload of an}' particular commodity.
The plaintiffs were to deduct and pay themselves Rs. 20,000towards the above Joan from each freight collection from every portand the plaintiffs, after deducting the said Rs. 20,000 and alldisbursements made by them, shall remit the balance of the freight. •collection on each trip to the defendants.
The defendants were not to collect directly any freight for thevessel " Barun ” under any circumstances and the same shall bepayable directly to the plaintiffs.
In case of any dispute, the same was to be referred toan Arbitrator mutually appointed or elso the Madras Courts were tohave exclusive jurisdiction to decide the dispute. 51
In terms of the aforesaid agreement, the Hindusthan Co. and itsManaging Director granted to the plaintiffs a promissory note on 2nd.May 1967 for Rs. Two Lakhs payable on demand with interest at 12%per annum. A composite agreement was also executed between theparties embodying all the terms and conditions referred to above.
Out of the loan of Rs. Two Lakhs agreed upon, the plaintiffs deducteda sum of Rs. 70,000 on account of the debt of Rs. 71,045‘74 that wasoutstanding in respect of the supply of necessaries to the defendantship up to 31st December 19G6 and paid the Hindusthan company thebalance sum of Rs. 130,000 in two instalments as follows :—-Rs. 100,000on 2nd May 1967 and Rs. 30,000 on 22nd May 1957. It would appear,therefore, that in respect of the disbursements set out in the documentsP2 to P14 filed with the petition only a sum of Rs. 1,045'74 remainedunpaid to the plaintiffs on 22nd Slay 1967. In the course of the hearing,however, learned Counsel for the plaintiffs marked in evidence vouchersPI7 to P26 setting out the disbursements alleged to have been made onaccount of the defendant ship during the period 2.6.19G7 to 4.11.1967.The total amount of disbursements on the documents P17 to P2G isRs. 9G5,71S’20. There are many items in these accounts which willnot fall within the category of necessaries but I need not go into thatquestion at this stage. I shall assume that the full sum of Rs. 965.71S'20represents disbursements in respect of necessaries.
According to para. 10 of P15, ” subsequent (o the aforesaid contractof agency, the Managing Director of the defendant company made furtherrequests for money on behalf of the company for its purposes, namely,repaying the company's old liabilities The plaintiffs, accordingly,
:i made further advances .aggregating to Rs. 319,S00 between 25.5.19G7
.■?I A SUPRAMAXIAM, J-—New India Maritime Agencies Private, Ltd. 207
v. The Ship “Barun"
and 23.10.1967, the total advances made by the plaintiff's thus comingto Rs. 520.S45-74. ” This sum of Rs. 520,845:74 included the sum ofRs. 1,045-74 which was the balance due on the supply of necessariesup to 31.12.19G6. If, however, the sum of Rs. 1,045 74 was added tothe disbursements alleged to have been made on account of the defendant-ship between 2.C.19C7 and 4.11.1967, the resulting position was as follows :the amount pa3'able as disbursements made on account of the ship upto 4.11.1967 was Rs. 966,763*94 and the cash advances to the HindusthanCo. Rs. 519,S00.
During the aforesaid period, the plaintiffs received as freight collectionsa total sum of Rs. 1,089,615-95. The Statement of Operation 2D1Band the statement of account 2D1A show clearly that the freight wascollected at four ports. If the subsequent advances and disbursementswere made on the same terms as those on which the initial loan of Rs.200,000 was granted, the‘plaintiffs were entitled-to-deduct only a sumof Rs. 20,000 from each freight collection towards the loans and wereunder a duty to apply the balance towards the disbursements made onaccount of the ship. Any balance left over had to be paid to the Hindus-than company. On that basis, the plaintiffs were entitled to appropriateonly a sum of Rs. 80,000 out of the freight collections towards the cashadvances of Rs. 519,800, and they had in their hands a sum ofRs. 10,09,615-95 to meet the other disbursements which amounted toonly Rs. 966,763.94. They still had a balance sum of Rs. 42,852-01which was payable to the Hindusthan Co. If credit was given in thissum against the cash advances, the balance payable by the HindusthanCo. was Rs. 396,947-99. The sum of Rs. 420,421-96 claimed in theMadras case was arrived at by adding to the said sum 12% intereston the sum of Rs. 200,000 for which the promissory note had beengiven.
It was submitted by learned counsel for the plaintiffs that the termsof the agreement set out in para. 5 of P15 applied only to the initialloan of Rs. 200,000 and not to the subsequent cash advances amountingto Rs. 319,800 and that the plaintiffs were therefore entitled to paythemselves that sum out of the freight collections before meeting theexpenses incurred in respect of the ship. On the basis of that sub-mission he argued that the outstanding balance or a substantial partof it represents disbursements made in respect of necessaries for theship and that an action in rem therefore lies against the ship. I
I am of opinion that the aforesaid submission is not tenable as it isclear from the averments contained in P15 and from an examinationof the vouchers P17 to P22 that the plaintiffs made the subsequentadvances too on the basis of the agency agreement set out in para. 5 ofP15. In vouchers P17 to P22 the plaintiffs claimed agency commissionin terms of the said agreement in respect of each.of the six voj'ages setout in the Statement of Operation 2D1B. Apart from that, the plaintiffs
208 SIVA SUPRA2SIANIAM, J.—Keiv India Maritime Agencies Private, Ltd.
v. The Ship “Barun'’
expressly averred in para. 1G of P15 that they “ have kept alive thecontract of agency and hereby signify their acquiescence in itscontinuance. ” It is not open, therefore, to the plaintiffs to contend atthis stage that the subsequent advances were made by them on adifferent basis.
On the mateiial contained in the documents filed by the plaintiffsand pleaded as part and parcel of their petition I find that the plaintiffs'had sufficient funds out of the freight collections to pay themselves allexpenses incurred by them in respect of the defendant ship, whethernecessaries or not, and that the sum of money claimed in the Madrascase as well as in the instant case represents tho balance payable to theplaintiffs in respect of the monies advanced to the Hindusthan Co., forits own purposes and not for the purpose of procuring necessaries forthe ship. An action in rem does not lie to enforce such a claim. As wasstated by Dr. Lushington in The Aaltje Willemiva1 : “ It is well knownthat the Court has no jurisdiction as to claims for money advanced, ■unless it is perfectly clear that the money was to be applied for thepurchase of necessaries to be supplied for the use of the ship or crew'.”
It was further submitted that the plaintiff’s claim is one by an agentagainst his principal for the balance due on a general mercantile accountand an action in rem does not lie in such a case. A claim for necessariesby an agent has been the subject of several decisions by the Presidentsof the High Court of Admiralty in England as well as by the Privy Councilin appeal.
In the case of The Megileff2 Hill J. reviewed all the earlier cases onthis subject and stated : “ There is nothing in the mere relation ofprincipal and agent as between owner and agent which prevents theagent who has found money for the supply of necessaries to a shipfrom suing the owner, his principal, by a writ in rem and arrest of theship to which the necessaries have been supplied.” But he held thatwhere a plaintiff is not in a position to say that he has a present rightof action for the items of necessaries as a separate and distinct cause ofaction, and his claim is for the balance duo on a mercantile account, anaction in rem is not available to him.
In the instant case, the statement of account 2D1A filed by the plaintiffsis in two parts. The first is headed “ True copy of accounts from 22ndSeptember .. 1964 to 31st December 19GG—In account, with MessrsHindusthan Shipping Co. Ltd.” and the second part “True copy ofaccount from 2nd May 1967 up to 15th April 19GS In the account, abalance is struck as at 31st- December 19GG and that balance is carriedover to the second part. The second part contains on the debit sideseveral items of loans made to the Hindusthan Co., as well ns disbursementsmade on account of. the ship in respect of the six voyages set out in the
1 Admiralty and Ecclesiastical Cases, Vol. 1 (JSC-5-1SC7) p. 107.
* 1021 Probate 2,W.
SIVA SUPRAMANIAM, J.—New India Maritime Agencies Private, Ltd. 209
v. The Ship “Barun”
Statement of Operations 2H1B. The vouchers attached give the detailsof the amounts debited as disbursements. On the credit side are set-down the freight collections. A balance is struck as at 15.4.1968 accordingto which a sum of Rs. 396,947 99 is paj-able to the plaintiffs by theHindusthan Co. To this sum is added 12% interest on a loan ofRs. 200,000 and the total debit is Rs. 420,421-96. The plaintiffs haverestricted their claim to Rs. 400,000 which was the amount for whichthe Hindusthan Co., consented to judgment in the Madras case. Theloans referred to in the account were not advances made to the HindusthanCo., to pay for or to procure necessaries for the ship. The form of theaccount makes it clear that it is a general mercantile account .and whatthe plaintiffs have claimed in this action is the balance due on thatgeneral account..
The facts in the instant case bear strong points of similarity to thefacts in the cases of the “ Ticentje " 1 and " El Salto ” 2. '
In the “ Tioentje ”, the plaintiffs Avere the agents in England of theowners of the ship which traded between London and Holland. Theyreceived the freights payable in London and out of the proceeds paidthe expenses incurred by the ship in England and from time to. timemade out accounts in which they placed the sums so paid and receivedrespectively to the debit and credit of each successive vo3Tage and sentthese accounts to the defendants avIio were t he Managers of the ship.An action was instituted by the plaintiffs for £195 Ss. 7d. as the balancedue to them for coals supplied to the ship for six voyages. They arrivedat this balance by taking the whole of their agency accounts AA*ith theowners for a period of three years down to the time Avhen they ceasedto be agents and by excluding all the items in respect of the coals. ThereAvas a balance for the voyages in question in favour of the oumers, of£27 6s. lid. This balance they deducted from the sum of £125 15s. 6d.the Avhole amount payable for the coal, and proceeded for the remainderagainst the ship. Hr. Lushington held that the plaintiffs were entitledto ha7e recourse to the ship to obtain satisfaction of their demand. Inappeal, the Privy Council reversed the finding and held that the arrestof the ship for a general balance of the accounts Avas unjustifiable. TheRt. Hon. Lord Chelmsford, in pronouncing the opinion of the Boardsaid: “The case of the Respondents depends entirely upon theirright to deal Avith the accounts in this manner. They say, in effect,that on taking an account, according to their OAvn vieAV, of all theirdealings and transactions with the OAvners of the ship they find a balancein their favour of £195 8s. Id. and that in order to obtain a charge onthe ship, they are entitled to select from the accounts the items Avhichconsist of charges for coals and to attribute the balance specifically tothose items. They thus propose to treat the sums received in respectof the six voyages, not as received on account of the disbursements-
1 13 Moo. P. G. 185.
* 25 Times L. P. 99.
210 SIVA SUPKAMANIAM, J.— New India Maritime Agencies Private, Ltd.
v. The Ship “Barun''
made for each successive voyage, which would be the fair inference fromthe accounts then rendered, but as payments made in liquidation of abalance due on a previous account current. But there is no principlewhich can enable the Respondents thus to make the suppli ofsecoals adistinct and separate account ”.
In the case of the “ El Salto”, the plaintifTs entered into an agreementwith the owners of the ship whereby the plaintiffs were to open a creditfor the ship’s, disbursements and were for a commission to do all thebusiness of insurance, sale or purchase of steamers and chartering orcoaling of steamers belonging to the owners. The agreement was termi-nable by three months’ notice. Subsequently the amount of the creditwas increased and the advances of the plaintiffs included other mattersthan ship’s disbursements. When the account was finally closed aftertermination of the agreement-, it included items amounting to £1000 forcoal supplied to the ship. The plaintiffs sued in rem for that sum. Butthey had no immediate right upon the supply of coals to be paid forthem. In dismissing the action, Sir Gercll Barnes said :“ I feel myself
bound by authority in this case, as soon as I come to the conclusion, asI do, that the claim I have to consider is really based upon a generalmercantile account between the parties and I am satisfied that that isthe true view to take of the case, given the provisions of the agreementbetween the parties ”.
The case of the Underwriter1 in which the claim was allowed may alsobe noticed. In that case, the plaintiffs were agents of the owners, havinghad large transactions with them in respect of other vessels. They madeadvances for. payment of repairs to the Underwriter and for othernecessaries. They collected freights which were sufficient to pay for theordinary disbursements but not for the repairs. Sir Robert Phillimore,in holding that- they were entitled to sue in rein for the unsatisfiedbalance of their account said : “ Tins suit is instituted, not-to recoverany particular or selected item of a general account, but the whole ofthe sum expended upon this particular occasion in payment of thenecessaries required by the exigencies of the ship, and without- whichshe could not have prosecuted her voyage. ”
In Foonrj Tai v. Buchheisler 2 their Lordships of the Privy Councilin affirming a decision in favour of the plaintiffs said: “No accounts,therefore, have been rendered in this ease which in fact resembleordinary mercantile accounts. But on an examination of the authoritiesto .which their Lordships have been referred and especially of thecases of the Twentje and the Underwriter, it will be found that whatthe}' really decide is this—that, as necessaries supplied to a ship arc2>ri»ia facie presumed to have been supplied on the credit of theship, and not solely on the personal credit of her owners (The Perla(1S57) Swa. 230), the form in which accounts are rendered by an agent,
1 1 Asp. M. L. C. 127.
* 190S A. C. 45$.
SIVA SUPRAMANIAM, J.—Mew India Maritime Agencies Private, Ltd, '21.)
v. The Ship •'Darun"'
who lias supplied or paid for necessaries, to his principal is evidence tcrebut that prima facie presumption and show that the agent looked foipayment to the principal alone. There is nothing in the Act of 1S61 tcprevent an agent from suing for necessaries under S. 5, nor is there anyrule or principle of Jaw that an agent loses his right so to sue if in theaccount he furnishes to his principal for those necessaries he gives creditfor sums received.
Unlike the accounts dealt with in Foong Tai's case, the Underwriterand the Megileff, the account rendered by the plaintiffs in the instantcase brings the claim within the class of cases dealt with in the Tucntjeand El Salto and an action in rem is not available to enforce it. Thefact that under the terms of settlement entered into in the Madras case,the Hindusthan Co. consented to the ship being detained at any portuntil the plaintiffs’ dues were paid cannot affect the question whetherthe claim is one which is enforceable by an-action^t«_rew. __
A large sum of money is undoubtedly payable by the HindusthanCo. to the plaintiffs but the question I fiave to determine is whether i^e.plaintiffs are entitled tlfe enforce the claim by an action in rem. Onthis question, having regard to the authorities cited, I have no alternativebut to rule against the plaintiffs.
«
In support of the motion that the jietition be rejected, learned Counselfor the intervenients made also the following submissions: (a) thatan action in rem docs not lie where the claim is against the charterersand not against the owners (6) that the attorney of the plaintiffs hasno authority to institute or maintain the present action under the Powerof Attorney filed in this case and (c) that the plaintiffs are seeking toenforce in this Court the decree in personam entered in their favour inthe Madras Court and this Court has no jurisdiction to enforce thatdecree. Several interesting questions of law were argued at length inconnection with the above submissions, but in view of the conclusionI have already' reached, it is unnecessary to express any opinion uponthem.
Learned Counsel for the plaintiffs raised the question of the right ofthe mortgagees to intervene and raise objections to the plaintiffs’ claimwhen neither the owners of the ship nor the Hindusthan Co. have appearedto contest the claim. It was submitted that only mortgagees in possessionwere entitled to intervene. Halsbury (3rd Ed. vol. 1 p. 80) while dealingwith the topic “ Who may appear ” states :“ Further, any person
not named in the writ may intervene in an Admiralty action in rem andappear on filing an affidavit showing that he is interested in the resunder arrest or in the fund in the Registry. Such persons are mortgageesetc In the case of the Orienla1 the defendants, the owners of theship, did not appear but the first and second mortgagees who had made
i 1S95 Probate 49.
/
212 SIVA SUPKAMANIAM, J.—New India Maritime Agencies Private, I Ad.
v. The Ship “Barun”
advances and held registered mortgages on the ship. were allowedto intervene and defend the action. They were not mortgagees inpossession of the ship. I am of opinion that the mortgagees were entitledto intervene in the action.
Learned Counsel for the plaintiffs also submitted that, unless theaction is frivolous or vexatious, the plaintiffs should not be shut outin limine. He relied on the following observations of Wiltner J., inThe St Elefterio1:—“ Suppose, for instance, following the argumentof .counsel for the defendants, that this Court comes to the conclusion,on the preliminary argument held at this stage of the action, that theaction is not one that is sustainable in law, it will presumably setaside the writ and the warrant of arrest. It is possible (these thingshave been known to happen) that a higher Court might take a differentview: but in the meantime the ship, which is a foreign ship, hasbeen freed from arrest, has gone, and may never return to this country.It might be that in these circumstances the plaintiffs would have losttheir right for ever to entertain proceedings in rein in this country ".The preliminar}' objection in that case depended on the properconstruction to be given to S. 3 (4) of the Administration of JusticeAct, 1958—a matter which admitted of argument. In the instantcase, on the other hand, the objection is based on facts on which theplaintiffs themselves rely in their petition. .The question of furtherevidence, therefore, does not arise.
The averments contained in the petition and affidavit of the plaintiffs'
• attorney that the claim of Rs. 400,000 represented the value of necessariesand/or moneys advanced to procure necessaries and that the claim issupported by the vouchers P2—P14 arc clearly nob in accord with thefacts. Had the statement of account 2D1A been filed along with thepetition (as the plaintiffs should have done) and the true position iziregard to the claim been made clear in the petition, the writ of summonsand warrant of arrest would not have been issued by this Court in thiscase.
Under rule 7S of the Admiralty Court Rules (Subsidiary LegislationVol. 1, p. 139) I rescind the order directing the issue of a writ of summonsand a warrant of arrest. Let the writ and the warrant be recalled. Theplaintiffs will pay the mortgagec-intervenients their costs of theseproceedings.
Action in rem dismissed. Writ ofsummons and rear rant of arrestof ship rescinded.
1 (1067) 2 A. E. P. 374.