1. ' Sardar Ali Bhola son of Meran Hussain, carrying on business under the name and style of Sohail Brothers, filed action in rem before this Court in the admiralty jurisdiction against m. v. Coos Bay, a foreign vessel flying Panamanian flag and against Messrs Golden Rule Transport Inc., a foreign Company having its office at Seattle, Washington, U. S. A. For recovery of Rs, 1,66,269 on account of necessaries supplied to the ship. Defendant No, 2 who are owners of the vessel had been made a party at first but their name was struck off on an application made by the plaintiff. The master of the vessel Mr. Benzamin Kurvilla, filed a statement admitting the claim of the plaintiff and accordingly the suit was deemed for Rs, 1,66,269.90 with interest at the rate of 10% per annum from the date of the suit till the date of the decree and the plaintiff was allowed the costs of the suit. The ship had been ordered to be arrested on an application made under Rule 731 of the Sind Chief Court Rules (0. S.) by order dated 16-4-1978 with the condition that it shall be released as soon as the defendant furnishes security for the amount claimed in the suit. The master of the vessel admitted that no security had been furnished and that he had no objection if the ship is sold for realization of the decretal amount. Accordingly on 4-10-1978 the Court ordered that the Nazir should sell the ship. By order dated 30-10-1979 the sale was confirmed in favour of Messrs Hashmi Ship Breakers Limited for the sum of Rs, 16,85,000 (Rupees sixteen lakh eighty-five thousand.
2. Besides the plaintiff, claims were also filed by the master of the ship, Amanullah Khan, Abdul Jalil and Abdul Muntizar, members of crew, Oceanic Irfan Agencies, B. F. Shipping Works, Sheikh Shipping Agencies, Karachi Steam Navigation and K. P. T. The claims were referred to the Nazir for initial scrutiny and report. The Nazir, submitted his reports on 10-1-1980 and 17-1-1980. Objections to the aforesaid reports were filed by the plaintiff, master of the ship and claimant Karachi Steam Navigation Co. Ltd. Each of the claims is being separately considered after looking into the objections filed.
2. Before the scrutiny of the claims is finalized it may be stated that the arguments of the learned counsel for the claimants were heard in order to fix the priorities of the claims specially in view of the fact that the master of the ship and members of the crew desired settlement of their claims as soon as possible which in the circumstances of the case was considered reasonable and proper. It was agreed by all the counsel of the claimants that the fee and expenses of the Nazir with regard to the sale of the ship and the costs of the plaintiff, in whose action the ship was arrested, have to be paid in priority of all the claims. The Nazir claimed Rs, 16,860 as fee in accordance with the scale mentioned in Chapter 1, Appendix "C" of the Chief Court Rules which amount was approved for payment by this Court. The costs of the suit decreed and publication charges which have to be included therein amount to Rs, 5409.90 which are ordered to be paid to the plaintiff.
3. There was agreement and consent with regard to priority of the claim of K. P. T. As they have statutory lien in respect of the res under section 52 of the Karachi Port Trust Act (Bombay Act, XVI of 1886). There was also consent to the payments of claims of the master of the ship, Abdul Muntazir (seaman), Amanullah Khan (Chowkidar) and Abdul Jalil (Chowkidar) who hold maritime liens in respect of their claims. Maritime lien has been described in Halsbury's Laws of England, Volume 30 (Second Edition) as under :- "A maritime lien is a claim or privilege upon a maritime res in respect of service done to or injury caused by it. Such lien does not import or require possession of the res, for it is a claim or privilege on the res to be carried into effect by legal process. A maritime lien travels with the res into whosoever possession it may come. It is inchoate from the moment the claim or privilege attaches, and when called into effect by the legal process of a proceeding in rem relates back to the period when it first attached."
3. ' Priority of liens has been mentioned in Introduction of Shipping Laws by Ronald Bartle (Second Edition) at page 200 as under :- "Generally speaking liens which arise from damage suffered (e.g. Collision) take priority over contractual liens, but liens for salvage enjoy priority over all other liens which were created earlier.
4. Among liens of this first class a party who has obtained judgment has priority over those who have merely commenced proceedings. Otherwise such liens rank equally.
5. ' Liens arising from contractual obligations rank in inverse order of their creation. The later the lien the higher the priority. Once again however, salvage takes precedence over prior claims. After salvage come liens for wages and finally for bottomry and respondentia bounds. These are followed by mortgages and statutory liens.
6. ' The possessory lien generally ranks last. The shipwright's lien for repairs ranks after prior maritime liens, but takes precedence over those which are created later."
7. ' It may be observed that there are no particular rules with regard to determination of the priority of liens over one another but on equitable principles the circumstances of each particular case has to be considered. It has been the general order of priority that after payment of charges and expenses on the arrest of the ship the right of a deck and harbour authority, exercising its powers under the provisions of any legislative enactment such as the Port Trust Act in the instant case is given priority. Next in order of priority are maritime liens. In the instant case the maritime lien arises ex contractu or quasi ex contractu such as wages, disbursement and liabilities of the master, the seaman wages etc. It was therefore rightly conceded by the learned counsel for the claimants that by consent after checking the claims of the master of the ship, Amanullah Khan (Chowkidar), Abdul Jalil (Chowkidar) and Abdul Muntazir (Seaman) payments may well be ordered in their cases. Orders were accordingly passed by this Court on 19-1-1980.
8. ' Claim of K. P. T.-At first the claim was amounting to about Rs, 19,00,000 (Ninteen lakh) but finally vide its letter No, D/C/7398 dated 21-10-1979 they agreed to accept a lump sum amount of Rs, 6,50,000 in full and final settlement of their dues against the ship up to 31-10-1979 after which date the purchaser of the ship was to be liable for dues of the K. P. T. The claim of the K. P. T. Was considered to be proper and by consent of the counsel appearing on behalf of the claimants the aforesaid amount of Rs, 6,50,000 was paid on 27-1-1980.
9. ' Claim of the Master of the ship.-Benzamin Kurvilla, master of the ship who as already stated had a maritime lien did not file any separate suit but had filed caveat in which he had claimed as under :-. {{TABLE}} Salary from the period from 27-10-1976 to Rs, 31-10-1976 @ US $ 1000 per month. ...
10. 166.65
(1) Salary from November 1976 to December 1976 @ US $ 1000. ... ...
11. 2000.00
(2) Salary from January 1977 to 10-11-1979 US $ 1200 per month. ... ...
12. 41200.00 Three months leave salary ...
13. 3600.00 Notice pay ... ... ...
14. 1200.00 Air fare Karachi to Bombay ... ...
15. 75.00 48,241.65
(3) Add on account of disbursement amount as per statement ... ... ...
16. 6.158.17 54,399.82 Less payment received ... ... 2,166.65 US $ 52,233.17 {{TABLE}} ' During the scrutiny before the Nazir the claimant stated that as regards items (1) and (2) he has already been paid the same as mentioned at item (8). The master had produced his appointment letter dated 27-10-1976 issued by W. C. Buthfored who was stated to be the representative of the owners of the ship. He was appointed at a salary of US $ 1000 per month from 27-10-1976 for the first two months and thereafter at the rate of US $ 1200 p.m. The amount claimed at item (3) being the salary from January 1977 to 10-11-1979, the date on which the ship was delivered to the purchaser at the rate of US $ 1200 p.m. Was considered as justified. The Nazir in his report pointed out that as regards Items (4) and (6) there is a clause in the appointment letter that the master will be entitled to one month's leave with an air ticket to and from India after completion of one year but it has not been mentioned in the said letter as to whether in case the leave was not availed of he could be paid leave salary or air fare. It is therefore decided that he is not entitled to amount claimed by him vide Items (4) and (6). Since his services were not terminated by the owners in the ordinary course the master is not entitled to amount of notice pay vide item (5). The master had produced statement showing the disbursement of account from 9-12-1976 to 28-2-1977 and he has also in his statement before the Nazir stated that he had spent a further amount of U S $ 267.75 on crew members out of his own pocket. However, the aforesaid amount could not be allowed to him as claimed by him vide item (7) above. His claim with regard to the amount of salary from January 1977 to 10-11-1979 amounting to US $ 41200 equivalent to Rs, 407880 was accepted as correct and was allowed to be paid to him in Pakistan currency.
17. ' Claim of Amanullah Khan (Chowkidar).-This claimant also had maritime lien with regard to his claim and therefore although he had not filed any separate suit and had filed only a caveat, his claim of wages from 1-11-1978 when he was appointed as Chowkidar on the ship to 15-3-1979 @Rs, 30 per day amounting to Rs, 4,050 is allowed since he had produced the letter of his appointment/certificate signed by Mr. Hawkins, owners' representative to support his appointment as chowkidar at that salary.
18. ' Claim of Abdul Jalil (Chowkidar).-He has also produced letter of his appointment/certificate issued by Mr. Hawkins and his claim for wages from 1-10-1978 to 31-10-1979 was accepted at Rs, 12,780.
19. ' Claim of Abdul Muntizar (Seaman).-This claimant had filed a separate suit being Admiralty Suit No, 947/79 claiming Rs, 53,330 as under : {{TABLE}} Wages from 10-1-1977 to 31-1-1977 US $ 152.00 Wages from 1-2-1977 to 31-10-1979 ... 7,524.00 Leave Wages for two months ...
20. 456.00 8,132.00 Less received. 3,099.00 5,033.00 Air ticket to UAB.
21. 300.00 US $ ... 5,333.00 Equivalent to Rs, 53,330 {{TABLE}} ' He has produced letter of his appointment issued by the agents of the owners of the ship at Kuwait. His claim with regard to leave wages for two months and air ticket at Items (c) and (d) above was not allowed as he could not prove that under the terms of his appointment he was entitled to the same. His claim amounting to U S $756 i,e, Rs, 7,560 was therefore disallowed. Mr. Munir Malik, learned counsel for the claimant who was also party to the consent order withdrew Admiralty Suit No, 947/79 in view of the fact that the claimant had maritime lien and was only claiming his wages in the action in rem filed by the plaintiff. As the counsel of the other claimants had consented to the priority and the payment, it was ordered that Rupees equivalent to US $. 4577 be paid to the claimant. It may further be pointed out that the claim of the seaman for his wages had been endorsed by the master of the ship and deduction from his claim of disputed items was for the reasons already given. He was paid Rs, 45,312.30.
22. ' The claims referred to above were admitted and payment made by consent order and therefore the following remaining claims need to be decided.
23. ' Claim of Sardar Ali Bhola, plaintiff-The Decretal amount awarded by the Court is under the decree to be allowed with interest not upto 31-10-1979 but up to the date of the Court's Orders i,e, 4-10-1978 as pointed out by the Nazir. The claim including costs therefore is endorsed to be of Rs, 1,83,992.
24. Deducting the amount already ordered to be paid to him as costs Rs, 1,74,582.90 remain out of his full claim and payable to him.
25. ' Claim of Oceanic Irfan Agencies.-The claimant had filed a separate Civil Suit for recovery of Rs, 3,05,429 for carrying out repairs and supplying necessaries to the ship. The suit has been decreed for the aforesaid amount with 9% simple interest from the date of Suit till payment and with costs amounting to Rs, 9,685. The master had filed an application for setting aside the decree which was dismissed on 16-2-1980.
26. ' Claim of B. F. Shipping Works.-The Claimant had filed Admiralty Suit for recovery of Rs, 50,635 for the costs of chipping and painting works done on the ship. The suit is pending decision but not in the instant suit. The caveat has however been ordered to be entered in a book by the Court concerned.
27. ' Claim of Sheikh Shipping Agencies.-The claimant has filed a separate admiralty Suit claiming recovery of Rs, 68,783 being costs of chipping and painting works carried out to the res. The claim is pending decision and the claimant has filed caveat in that case which has also been placed on the book.
28. ' Claim of Karachi Steam Navigation Co. Ltd.-Messrs Karachi Steam Nevigation Company Ltd.
29. Claiming to be agents of vessel m. v. Coos Bay have filed claim of Rs, 3,078,91.77. It may be pointed out that the claimant has not filed any separate suit and for the first time addressed a letter to the Nazir of this Court which is dated 12th February 1979, pointing out that the money was due to them from the owners of the ship. An application under rule 765 of the Sind Chief Court Rules was made on 12-1-1980 for the purpose to enter a caveat. However, the same has not been entered in the book of caveats inasmuch as under rule 750 of the Sind Chief Court Rules only a party in a suit desiring to prevent the release of any property under arrest, shall file such an application supported by affidavit against release of property. Admittedly the claimant was neither a party in the suit filed by plaintiff Sardar Ali Bhola nor has he filed any litigation so far with regard to his claim.
30. ' The claimant has also filed objections to the report of the Nazir in respect of his claim which is being dealt with in this order. The claimant filed disbursement account reproduced below :- {{TABLE}} Light dues April 1978 to January 1979 i,e, 22 months 3103 NRT g O. 25 per N R T per Rs, month. ... 17,066.50 Bug Bill from Karachi Shipyard ... 1,500.00 Repair bill from Marconi Marine 7,709.32 Cost of Freon Gas & Co 2 gas ... ... 3,500.00 Watchman bill ... 15,068.80 Cost of fresh Water 5,600.00 Boat hire ... ... 12,600.00 Paid to Master for local disbursements 35,160.00 Provisions supplied 1,18,934.00 Medical bills 3,009.00 Laundry bill 259.00 Cost of air ticket to crew 2,158.00 Hotel Bills. 5,428.95 Immigration expenses ... 1,840.00 Payment to Engineer daily wages 1,000.00 Advocate bill for K P T case ... ... 3,850.00 Advocate bill for Chief Officer ... 5,000.00 Cable/telexes and long distance calls 91,000.00
(1) Agency fee 10-4-1977/31-1-1979 i,e, 662 days at the rate of 250 per day ... 1,65,500.00 4,95,685.37 Less received ... 1,87,803.60 ... 3,07,881.77." {{TABLE}} ' A perusal of the account will show that the total claim of the claimant is of Rs, 4,95,685.37, on account of 19 different heads out of which it is admitted position that the claimant received Rs, 1,87,803.60, leaving a balance of Rs, 3,07,881.77. When the account was being scrutinized by the Nazir, the Accountant of that claimant was asked to produce original bills, receipts and vouchers in support of the amount claimed under different heads. It was stated by the representative of the claimant that the original documents were handed over to the representative of the owners Mr. W.
31. C. Ruthford during the period between September, 1978, and October, 1978. The representative could not even produce photo copy of the original documents. In respect of Items 1 and 3 it was the case of the claimant that amounts paid were Rs, 775.75, and Rs, 5,000, whereas the claim is for Rs, 17,66.50, and Rs, 7,709.32, respectively. Item No, 5 shown as the watchmans' bill amounting to Rs, 15,068, obviously appears excessive as the watchmen were appointed hardly for 3 months.
32. Similarly Item No, 7 the boat hire bill from 7-4-77 to 20-4-77 i. e. In all 14 days amounting to Rs, 12,600, @ Rs, 250, per trip is also apparently excessive. With regard to Item No, 8 in which a sum of Rs, 35,160, is said to have been paid to the master for local disbursement no details of the disbursement have been given and in counter affidavit filed by the master he has totally denied any alleged payment to him. As a matter of fact he has denied any authority by him to the payments by the claimants as agents for the period claimed by them. With regard to Item 9 an amount of Rs, 1,18,934, has been claimed for supply of provisions to the ship. The ship was under arrest most of the time and there were very few crew members left on the ship. It has also been contended on behalf of the other claimants that such provisions could not have been delivered on the ship without submitting the shipping bills for the goods to the Customs Authorities, as such delivery needs clearance of the Customs Authorities. No copies of such shipping bills were produced before the Nazir or before this Court. The master in the counter affidavit already referred to has stated that after the arrest of the ship which was a cargo ship without any cargo loaded on it, there were hardly 2 or 3 members of the crew left on the board and the claimant did not render services to them. With regard to the claim regarding supply of items he has stated that the plaintiff Sardar Ali Bhola who was appointed originally as Handling Agent continued to supply necessaries on the ship on credit and therefore the claim with regard to supply of provisions and agency fee by the Karachi Steam Navigation Co. Ltd., is not genuine and they are not entitled to any amount as they have already settled their account with the owners. With regard to Item 17 which is about the fee of Rs, 5,000, paid to the Advocate the same cannot be levied against the ship. The claim with regard to Item 18 of Rs, 91,000, on account of cables and telexes and long distance calls is not supported by bills issued by the concerned Departments as copies of the bills produced before this Court are said to be combined bills in respect of other ships etc. And there is no possibility of verification of the same. It has been contended that after the arrest of the ship there could have been no occasion for sending all the telexes, cables and long distance calls. Lastly the agency fee for tlhe period from 10-4-77 to 31-1-79 i. e. 662 days at Rs, 250, per day is not only excessive but the liability has been denied by the master and he has clearly stated that he was not a party to engagement of the claimant as agent at any time.
33. ' The claimant as already stated has not filed any suit in respect of his claim and Mr. Ahsan T.
34. Khawaja, learned counsel for the claimant has taken the plea that at least the claim with regard to necessaries does not require separate litigation as it could form a maritime lien on the ship. The plea is based on section 5 of the Admiralty Courts Act, 1861. The question as to what are the "necessaries" within the meaning of section 5 of the Act was considered in Suit No, 105/77 reported in PLD 1978 Kar. 1052 and after considering the Privy Council decision in Foong Taj & Co. v.
35. Buchaster & Co. (1) and Webster v. Seekamp (2), it was inter alia held that although stores and provisions could fall under the definition of necessaries, telexes, commission, boat hire charges would not come within the definition. In the same decision the Suit was dismissed with costs as it was in the nature of a suit for account and not in respect of item of necessaries only which could be considered in an action in rem.
(1) 1980 A C (2) (1821) 4 B & Ald. 352 ' In the instant case as already stated although the amount of Rs, 1,87,803.60, is shown as received from the owners no details about disbursement of the amount has been made available and there is the statement of the master of the ship in his counter affidavit to the effect that to his knowledge a sum of Rs, 1,58,529.29, was handed over by the owners' representative for settlement of K. P. T.
36. Dues which is lying as money in trust with the Karachi Steam Nevigation Co. Ltd. It was stressed by him that in fact the claimants are liable to deposit the said amount in Court as they did not pay the same to K. P. T. Which resulted in huge accumulation of K. P. T. Dues.
37. ' In the circumstances of the case therefore, the only conclusion that can be drawn from the facts on record is that there is unsettled running account between the claimants and the owners which cannot possibly be decided in these proceedings. The admiralty suit was filed in April, 1978, and the ship was put under arrest by order of this Court dated 16-4-71 but a already stated the claimant did not file any litigation or enter a proper caveat and therefore can be said to be guilty of laches.
38. Further for the reasons already given since the claimants is not a party to any litigation the belated caveat cannot be entered in the book as it is incompetent under rule 750 of the Sind Chief Court Rules.
39. ' After deduction of the payments already ordered from the sale proceeds deposited with Nazir including interest up to 12th February, 1980, Rs, 5,55,325.70, remain in balance. The amount due to the plaintiff in respect of the decree after deducting the costs already ordered to be paid to him is Rs, 1,74,582.90. The amount found due under the decree to Oceanic Irfan Agencies is Rs, 3,28,863.
40. Payment should be made of their claims as approved above to the Plaintiff and Oceanic Irfan Agencies Ltd., as under:- {{TABLE}} Plaintiff: Costs. Rs, 9,409.90 Decretal amount with interest 1,74,582.90 Total: 1,83,992.80 Oceanic Irfan Agencies: Costs. 9,685.00 Decretal amount with inf rest 3,19,178.00 Total: 3,28,863.00 {{TABLE}} ' The claims of the plaintiff, Oceanic Irfan Agencies, B. F. Shipping Works and Sheikh Shipping Works, exceed the balance remaining for disbursement. It is true that whereas there are decrees in favour of the plaintiff and the Oceanic Irfan Agencies, the claims of Messrs B. F. Shipping Works and Sheikh Shipping Agencies are yet under litigation.
41. ' Mr. Muhammad Akram, the learned counsel for the plaintiff has referred to Introduction to Shipping Law (Second Edition) by Ronald Bartled at page 200 which has already been reproduced at earlier stage in this order. The words "among liens of this first class" obviously have reference to liens for salvage which enjoys priority over all other liens. By analogy, since there has been fixing up of priority in the same class of liens, on the ground that party who has obtained judgment has priority over those who have merely commenced proceedings, it is fit and proper that the claims of the plaintiff and Oceanic Irfan Agencies which have been decreed by this Court in exercise of admiralty and original civil jurisdiction respectively should be given priority and payment made to them. With regard to the claim of B. F. Shipping Works and Sheikh Shipping Works they have only started the litigation long after even the arrest of the ship which was arrested on 16-4-78. The claim appears to be in respect of work done after the arrest of the ship. After satisfying the claims of two decree-holders mentioned above, Rs, 42,469.90 will remain in balance with the Nazir. It is hereby ordered that in case both the above suits are decreed they should get paid pari passu from the balance remaining. In case one of the suits ends in decree for payment the amount in balance should be kept till the decision of the other suit to make payment pari passu possible. In case only one claim is allowed payment from the balance should be made as there will be no question of payment pari passu. In case both the suits fail or there is lialance left it should be held in trust for the owners of the ship.