C.M.As. NOS. 5, 26, 28 AND 30 OF 2011 ' MUHAMMAD TASNIM, J.---Since common facts and law are involved in Adm. Suits Nos. 2 of 2011, 5 of 2011, 6 of 2011 and 7 of 2011, pending applications under Rule 731 of Sindh Chief Court Rules (0.S) being CMA Nos.5 of 2011, 26 of 2011, 28 of 2011 and 30 of 2011 respectively are being disposed of by this order.
' FACTS OF SUIT NO,2 of 2011:
2. The case set out by the plaintiff in this suit is that Vessel M.T. GALAXY is registered in the name of defendant No,2 who are the wholly owned subsidiary of defendant No,3. It has been further stated that defendants Nos.2 and 3 are the registered owners/beneficial owners of above vessel. As per plaint a consignment of 5999.426 Metric Tons Crude Palm Oil was imported by the plaintiff under three bill of ladings from Malaysia for delivery at Port Qasim and the value of such consignment was US$ 43,99,583.85. The aforesaid vessel arrived at Karachi on 7-4-2010 and discharged the Crude Palm Oil from vessel to shore tanks. It is further case of the plaintiff that about 5911.131 Metric Tons of Crude Palm Oil was discharged and received from the vessel into the shore tanks as against the manifested quantity of 5999,426 Metric Tons, thus, there was a short landing of 88.295 Metric Tons. It is stated in the plaint that after discharge of the consignment survey was conducted which confirms the above short landing. The plaintiff has stated that due to non-delivery of 88.295 Metric Tons of Crude Palm Oil the plaintiff has suffered a loss of US$ 97,734.00. It is further case of the plaintiff that after noticing the above short landing the claim was lodged by the plaintiff but same was not honoured. In the circumstances the present suit has been filed. Along with the suit an application under Rule 731 of Sindh Chief Court Rules (0.S) for arrest of vessel was also filed. The matter was taken-up in Court for the first time on 12-1-2011 when learned counsel for the plaintiff pointed out that after discharge of cargo by the above vessel in the month of April 2010 the aforesaid vessel had gone and it has come to Karachi once again and same may be arrested.
After hearing the learned counsel for the plaintiff following orders were passed on 12-1-2011:-- "It is, inter alia, contended by learned counsel for plaintiff that plaintiff had imported Crude Palm Oil from Malaysia through Vessel M.T. "GALAXY" at Karachi. On discharge, it was found that 88.295 Metric Tons Crude Oil was short landed. In the circumstances, claim was lodged by the plaintiff upon the Local Agent of the shipping Company, but their claim was withheld and was not responded to. Learned counsel for plaintiff says that the vessel through which above consignment was imported has once again arrived at the Port of Karachi and presently Berthed at Port Qasim Karachi. Learned counsel further says that for arrest of aforesaid vehicle the present application for interim relief under Rule 731 of the Sindh Chief Court Rules is made.
' Let notice be issued to the defendants for 14-1-2011. Till then concerned port authorities are directed to arrest the vehicle M.T. "GALAXY" and not to issue port clearance. However if the suit amount i.e., $97,734.00 is paid or solvent surety is furnished by the Shipping Company, the ship may be released."
3. After notice of this application the defendants appeared and filed counter-affidavit to this application on 27-1-2011 wherein the defendants have denied that defendant No,3 is the beneficial owner of defendant No,1 vessel. It has further been stated that ex parte order for arrest of the vessel was obtained by the plaintiff by concealment of facts and misrepresentation. The defendants also stated in the counter-affidavit that plaintiff has made false allegation as to the shortage arising out of consignment of 5999.426 Metric Tons of Crude Palm Oil already imported by the plaintiff under three bill of ladings. The defendants have also challenged the validity of the documents filed by the plaintiff along with the plaint which have been down loaded by the plaintiff from the website.
It has been stated by the defendants that defendant No,3 has been providing the management service to the vessels of different owners which is common in shipping business. The defendants have denied categorically that there was any short landing in the earlier consignment and its stand is that suit is frivolous and liable to be dismissed. Number of documents along with the counter-affidavit have been brought on record, more particularly, Annexure 'A/2' to the counter- affidavit which shows that vessel M.T. GALAXY is hundred per cent owned by Galaxy Maritime Limited S.A. Which is defendant No,2. Similarly, Annexure 'A/3' to the counter-affidavit, also shows that the aforesaid vessel is owned by defendant No,2.
4. After receipt of counter-affidavit of the defendant plaintiff side filed affidavit-in-rejoinder wherein the claim of the defendants in the counter-affidavit was refuted and plaintiff maintained its stand in the plaint.
' FACTS OF SUIT NO,5 of 2011:
5. The case set out by the plaintiff in this suit is that vessel M.T. GALAXY is registered in the name of defendant No,2 who are the wholly owned subsidiary of defendant No,3. It has been further stated that defendants Nos.2 and 3 are the registered owners/beneficial owners of above vessel. As per plaint a consignment of 2000.000 Metric Tons Crude Palm Oil was imported by the plaintiff under four bills of ladings from Malaysia for delivery at Port Qasim and the value of such consignment was US$ 15,94,000.00. The aforesaid vessel arrived at Karachi on 23-2-2010 and discharged the Crude Palm Oil from the vessel to shore tanks. It is further case of the plaintiff that about 1992.216 Metric Tons of Crude Palm Oil was discharged and received from the vessel into the shore tanks as against the manifested quantity of 2000.000 Metric Tons, thus, there was a short landing of 7.784 Metric Tons. It is stated in the plaint that after discharge of the consignment survey was conducted which confirms the above short landing. The plaintiff has stated that due to non-delivery of 7.784 Metric Tons of Crude Palm Oil the plaintiff has suffered a loss of US$ 9,889.00. It is further case of the plaintiff that after noticing the above short landing the claim was lodged by the plaintiff but same was not honoured. In the circumstances the present suit has been filed. Along with the suit an application under Rule 731 of Sindh Chief Court Rules (0.S) for arrest of vessel was also filed. The matter was taken-up in Court for the first time on 15-1-2011 when learned counsel for the plaintiff pointed out that after discharge of cargo by the above, vessel in the month of April 2010 the aforesaid vessel had gone and it has come to Karachi once again and same may be arrested.
After hearing the learned counsel for the plaintiff following orders were passed on 15-1-2011:- "It is, inter alia contended by the learned counsel for the plaintiff that plaintiff had imported 2000.000 Metric Tons Crude Palm Oil from Malaysia which reached Karachi through M.T. GALAXY and on receipt of the consignment it was found by the plaintiff that consignment has been short by 7.784 Metric Tons value whereof as per plaintiffs assessment come to US $ 9889. Learned counsel says that after arrival of assignment joint surrey was also conducted and report whereof appears on record as Annexure 'E' to the plaint which verifies the quantum of short landing of Crude Palm Oil. Learned counsel say that presently M.T. GALAXY is berthed at Port Qasim and discharging the cargo. Learned counsel says that warrant of arrest of vessel M.T. GALAXY be ordered to be issued and concerned authorities may be directed not to issue port clearance to the aforesaid vessel. In the circumstances issue notice to the defendants for 18-1-2011. Till then Port Authorities are directed not to issue port clearance and not to allow the vessel to leave territorial limits. However, if defendants pay the suit amount to the plaintiff or furnish solvent surety of the equivalent amount of claim with the Nazir of this Court the ship in question may be allowed to sail."
6. After notice of this application the defendants appeared and filed counter-affidavit to this application on 2-2-2011 wherein the defendants have denied that defendant No,3 is the beneficial owner of defendant No,1 vessel. It has further been stated that ex parte order for arrest of the vessel was obtained by the plaintiff by concealment of facts and misrepresentation. The defendants also stated in the counter-affidavit that plaintiff has made false allegation as to the shortage arising out of consignment of 7.784 Metric Tons of Crude Palm Oil already imported by the plaintiff under four bill of ladings. The defendants have also challenged the validity of the documents filed by the plaintiff along with the plaint which have been down loaded by the plaintiff from the website. It has been stated by the defendants that defendant No,3 has been providing the management service to the vessels of different owners which is common in shipping business. The defendants have denied categorically that there was any short landing in the earlier consignment and its stand is that suit is frivolous and liable to be dismissed. Number of documents along with the counter- affidavit have been brought on record, more particularly, Annexure 'A/2' to the counter-affidavit which shows that Vessel M.T. GALAXY is hundred per cent owned by Galaxy Maritime Limited S.A.
Which is defendant No,2. Similarly, Annexure 'A/3' to the counter-affidavit also shows that the aforesaid vessel is owned by defendant No,2.
7. After receipt of counter-affidavit of the defendant plaintiff side filed affidavit-in-rejoinder wherein the claim of the defendants in the counter-affidavit was refuted and plaintiff maintained its stand in the plaint. FACTS OF SUIT NO,6 of 2011:
8. The case set out by the plaintiff in this suit is that Vessel M.T. GALAXY is registered in the name of defendant No,2 who are the wholly owned subsidiary of defendant No,3. It has been further stated that defendants Nos.2 and 3 are the registered owners/beneficial owners of above vessel. As per plaint a consignment of 1999.966 Metric Tons Crude Palm Oil was imported by the plaintiff under two bill of ladings from Malaysia for delivery at Port Qasim and the value of such consignment was US$ 15,40,974.81. The aforesaid vessel arrived at Karachi on 23-2-2010 and discharged the Crude Palm Oil from the vessel to shore tanks. It is further case of the plaintiff that about 1992.183 Metric Tons of Crude Palm Oil was discharged and received from the vessel into the shore tanks as against the manifested quantity of 1999.966 Metric Tons, thus, there was a short landing of 7.783 Metric Tons. It is stated in the plaint that after discharge of the consignment survey was conducted which confirms the above short landing. The plaintiff has stated that due to non-delivery of 7.783 Metric Tons of Crude Palm Oil the plaintiff has suffered a loss of US$ 9,589,00. It is further case of the plaintiff that after noticing the above short landing the claim was lodged by the plaintiff but same was not honoured. In the circumstances the present suit has been filed. Along with the suit an application under Rule 731 of Sindh Chief Court Rules (0.S) for arrest of vessel was also filed. This matter was taken up in Court for the first time on 15-1-2011 when learned counsel for the plaintiff pointed out that after discharge of cargo by the above vessel in the month of April 2010 the aforesaid vessel had gone and it has come to Karachi once again and same may be arrested.
After hearing the learned counsel for the plaintiff following orders were passed on 15-1-2011:-- "It is, inter alia, contended by the learned counsel for the plaintiff that plaintiff had imported 1999.966 Metric Tons Crude Palm Oil from Malaysia which reached Karachi through M.T. GALAXY and on receipt of the consignment it was found by the plaintiff that consignment has been short by 7.783 Metric Tons value whereof as per plaintiffs assessment come to US$ 9589. Learned counsel says that after arrival of consignment joint survey was also conducted and report whereof appears on record as Annexure 'E' to the plaint which verifies the quantum of short landing of Crude Palm Oil. Learned counsel say that presently M.T. GALAXY is berthed at Port Qasim and discharging the cargo. Learned counsel says that warrant of arrest of vessel M.T.
GALAXY be ordered to be issued and concerned authorities may be directed not to issue port clearance to the aforesaid vessel. In the circumstances issue notice to the defendants for 18-1- 2011. Till then Port Authorities are directed not to issue port clearance and not to allow the vessel to leave territorial limits. However, if defendants pay the suit amount to the plaintiff or furnish solvent surety of the equivalent amount of claim with the Nazir of this Court the ship in question may be allowed to sail."
9. After notice of this application the defendants appeared and filed counter-affidavit to this application on 2-2-2011 wherein the defendants have denied that defendant No,3 is the beneficial owner of defendant No,1 vessel. It has further been stated that ex parte order for arrest of the vessel was obtained by the plaintiff by concealment of facts and misrepresentation. The defendants also stated in the counter- affidavit that plaintiff has made false allegation as to the shortage arising out of consignment of 7.783 Metric Tons of Crude Palm Oil already imported by the plaintiff under two bills of ladings. The defendants have also challenged the validity of the documents filed by the plaintiff along with the plaint which have been down loaded by the plaintiff from the website. It has been stated by the defendants that defendant No,3 has been providing the management service to the vessels of different owners which is common in shipping business. The defendants have denied categorically that there was any short landing in the earlier consignment and its stand is that suit is frivolous and liable to be dismissed. Number of documents along with the counter- affidavit, have been brought on record, more particularly, Annexure 'A/2' to the counter-affidavit which shows that Vessel M.T. GALAXY is hundred per cent owned by Galaxy Maritime Limited S.A.
Which is defendant No,2. Similarly, Annexure 'A/3' to the counter-affidavit also shows that the aforesaid, vessel is owned by defendant No,2.
10. After receipt of counter-affidavit of the defendant plaintiff side filed affidavit-in-rejoinder wherein the claim of the defendants in the counter-affidavit was refuted and plaintiff maintained its stand in the plaint.
' FACTS OF SUIT NO,7 of 2011:
11. The case set out by the plaintiff in this suit is that Vessel M.T. GALAXY is registered in the name of defendant No,2 who are the wholly owned subsidiary of defendant No,3. It has been further stated that defendants Nos.2 and 3 are the registered owners/beneficial owners of above vessel. As per plaint a consignment of 999.134 Metric Tons Crude Palm Oil was imported by the plaintiff under two bills of ladings from Malaysia for delivery at Port Qasim and the value of such consignment was US$ 7,59,341.84. The aforesaid vessel arrived at Karachi on 23-2-2010 and discharged the Crude Palm Oil from the vessel to shore tanks. It is further case of the plaintiff that about 995.278 Metric Tons of Crude Palm Oil was discharged and received from the vessel into the shore tanks as against the manifested quantity of 999.134 Metric Tons, thus, there was a short landing of 3.856 Metric Tons. It is stated in the plaint that after discharge of the consignment survey was conducted which confirms the above short landing. The plaintiff has stated that due to no delivery of 3.856 Metric Tons of Crude Palm Oil the plaintiff has suffered a loss of US$ 4,695.00. It is further case of the plaintiff that after noticing the above short landing the claim was lodged by the plaintiff but same was not honoured. In the circumstances the present suit has been filed. Along with the suit an application under Rule 731 of Sindh Chief Court Rules (0.S) for arrest of vessel was also filed. This, after was taken-up for the first time on 15-1-2011 when learned counsel for the plaintiff pointed out that after discharge of cargo by the above vessel in the month of April 2010 the aforesaid vessel come to Karachi once again and same may be arrested. After hearing the learned counsel for the plaintiff following orders were passed on 15-1-2011:- "It is, inter alia, contended by the learned counsel for the plaintiff that plaintiff had imported 999.134 Metric Tons Crude Palm Oil from Malaysia which reached Karachi through M.T. GALAXY and on receipt of the consignment it was found by the plaintiff that consignment has been short by 3.856 Metric Tons value whereof as per plaintiffs assessment come to US $ 4695. Learned counsel says that after arrival of consignment joint survey was also conducted and report whereof appears on record as Annexure 'E' to the plaint which verifies the quantum of short landing of Crude Palm Oil. Learned counsel says that presently M.T. GALAXY is berthed at Port Qasim and discharging the cargo. Learned counsel says that warrant of arrest of vessel M.T. GALAXY be ordered to be issued and concerned authorities may be directed not to issue port clearance to the aforesaid vessel. In the circumstances issue notice to the defendants for 18-1-2011. Till then Port Authorities are directed not to issue port clearance and not to allow the vessel to leave territorial limits. However, if defendants pay the suit amount to the plaintiff or furnish solvent surety of the equivalent amount of claim with the Nazir of this Court the ship in question may be allowed to sail."
12. After notice of this application the defendants appeared and filed counter-affidavit to this application on 2-2-2011 wherein the defendants have denied that defendant No,3 is the beneficial owner of defendant No,1 vessel. It has further been stated that ex parte order for arrest of the vessel was obtained by the plaintiff by concealment of facts and misrepresentation.. The defendants also stated in the counter-affidavit that plaintiff has made false allegation as to the shortage arising out of consignment of 3.856 Metric Tons of Crude Palm Oil already imported by the plaintiff under two bills of ladings. The defendants have also challenged the validity of the documents filed by the plaintiff along with the plaint which have been down loaded by the plaintiff from the website. It has been stated by the defendants that defendant No,3 has been providing the management service to the vessels of different owners which is common in shipping business. The defendants have denied categorically that there was any short landing in the earlier consignment and its stand is that suit is frivolous and liable to be dismissed. Number of documents along with the counter- affidavit have been brought on record, more particularly, Annexure 'A/ 2' to the counter-affidavit which shows that Vessel M.T. GALAXY is hundred per cent owned by Galaxy Maritime Limited S.A.
Which is defendant No,2. Similarly, Annexure 'A/ 3' to the counter-affidavit also shows that the aforesaid vessel is owned by defendant No,2.
13. After receipt of counter-affidavit of the defendant plaintiff side filed affidavit-in-rejoinder wherein the claim of the defendants in the counter-affidavit was refuted and plaintiff maintained its stand in the plaint.
14. Mr. Mazhar Imtiaz Lari, learned counsel for the plaintiff, has submitted that claim of the plaintiff pertains to last visit of M.T. GALAXY on 23-2-2010. He submitted that claim in the above mentioned suits have been made for the short landed consignment of Crude Palm Oil. Learned counsel for the plaintiff has referred to bill of ladings which appear on record which reflects the consignment which ought to have delivered by defendant No,1 vessel at Karachi. In support of his contention learned counsel for the plaintiff has invited my attention to the bill of ladings, commercial invoices, marine survey report, arrival village report, dry certificate (after discharging Annexure 'D'), joint dip statement (Annexure 'El, marine certificate report dated 30th March, 2010, discharge report sheet and cargo quantity discrepancy letter of protest to substantiate that short landing mentioned and further submitted that above short landing has taken place and claim of the plaintiff is just and proper. He submitted that in all fairness after having the knowledge of short landing the defendants should have paid the claim amount to the plaintiff but instead they avoided and forced the plaintiff to file the present suits. Learned, counsel for the plaintiff submitted that if arrest order earlier passed is recalled the plaintiff shall not be able to recover the claim amounts as after recall of arrest order the vessel will sail. He submitted that earlier orders for arrest of vessel be confined and application be granted as prayed.
15. Learned counsel for the plaintiff submitted that defendant No,1 vessel is registered in the name of defendant No,2 which is wholly owned subsidiary of defendant No,3, who are in fact beneficial owner/manager of defendant No,1, hence defendant No,3 is also liable to pay the suit amount. In support of his contention learned counsel for the plaintiff has placed reliance on the following cases:--
(1) YUKONG LTD. V. M.T. EASTERN NAVIGATOR (PLD 2001 SC 57)
(2) V.N. LAKHANI & CO. V. M.V. LAKATOI EXPRESS (PLD 1994 SC 894)
(3) UNION COUNCIL V. ASSOCIATED CEMENT (PVT.) LTD. (1983 SCMR 468)
(4) M/S. MARATOS AND CO. V. RICE TRADER (PLD 1989 Karachi 94)
(5) CENTRAL INSURANCE CO. V. M.T. TASMAN SPIRIT (2004 CLD 695)
(6) NAZAR MUHAMMAD V. ALI AKBAR (PLD 1989 KARACHI 635)
16. Conversely, Mr. Khalid A. Rehman, learned counsel for the defendants, has seriously disputed the claim of the plaintiff and has submitted that suit in its present form is not maintainable on the ground that suit in rem and in personam cannot be filed together in view of provisions of Admiralty Jurisdiction of High Court Ordinance, 1980 (hereinafter called Ordinance 1980). He has further submitted that no short landing whatsoever has taken place and the claim of the plaintiff is frivolous and the main suit along with listed application is liable to be dismissed. Learned counsel for the defendants says that interim order for arrest of ship has been obtained by the plaintiff by misrepresentation of facts and the same may be recalled. Learned counsel for the defendants in support of his contention has placed reliance on the following cases:--
(1) PAK AMERICAN FERTILIZERS LTD. MIANWALI V. AMIR ABDULLAH KHAN AND ANOTHER (1984 CLC 2170)
(2) ATLANTIC STEAMER'S SUPPLY COMPANY V. M.V. TITISEE AND OTHERS (PLD 1993 SC 88)
(3) M/S. V.N. LAKHANI AND COMPANY V. M.V. LAKATOI EXPRESS AND OTHERS (PLD 1994 SC 894)
(4) CENTRAL INSURANCE COMPANY LTD. AND OTHERS V. M.T. TASMAN SPIRIT AND OTHERS (2004 CLD 695)
(5) M.V. SEA SUCCESS I V. LIVER POOL AND LONDON STEAMSHIP ROTECTION AND INDEMNITY ASSOCIATION LTD. (AIR 2002 Bombay 151)
(6) M/S. MARATOS AND CO. V. TRICE TRADER AND OTHERS (PLD 1989 Karachi 94)
(7) PROCEEDING IN REM AGAINST THE VESSEL M.T. PORTOFINO AND ANOTHER V. M.T. PORTOFINO (2003 CLD 1655)
(8) GLOBAL TRADEWAYS LTD. V. TSAVLIRIS RUSS (WORLD SALVAGE AND TOWAGE) LIMITED AND ANOTHER (2004 YLR 2581)
17. I have heard the learned counsel for the parties and have perused the record with their assistance and the case law cited at the bar.
18. Now taking up the first contention of learned counsel for defendants that action in rem and personam cannot be joined together and the present proceedings are defective and liable to be dismissed. This particular point has come up for consideration in case of Messrs MSC Textiles (Private) Limited v. Asian Pollux and others (2007 CLD 1465), wherein learned Single Judge of this Court (Now the honourable Chief Justice) while dealing with the above issue has held as under:-- ' The jurisdiction in rem is invoked, against offending vessel, when one proceeds in rem, the purpose is to draw out the owner or charterer, or any person who claims to be interested or in possession or in control of the offending vessel. In such event, the person having any interest in the offending vessel has two options either to come out and defend the entire claim or abstain.
However, if such person chooses to abstain, then the liability is limited to the extent to the vessel otherwise not. The position in English and in Pakistan law is different. In English law action in rem and personam cannot be clubbed together.
' In Ahmed Investment Ltd. v. Sunrise IV PLD 7980 Kar. 229, in the context of section 35, of the Admiralty Court Act, as then applicable, held that the admiralty jurisdiction is exercisable in rem as well as in personam. Such position was affirmed in Bangladesh. Shipping Corporation if. Nedon PLD 1981 Kar. 246 and finally in the case of Yukong Ltd. South Korea Co. v. M.T Eastern Navigation PLD 2001 SC 57 our Supreme Court has finally endorsed the above position and objection as to joinder owners in action in rem against the vessel was repelled by the Supreme Court. As noted in the cited cases in Pakistan, position on the subject is settled, any discussion would be nothing but an attempt to reinvent the wheel. In the Light of above objection as to joinder of vessels as well as the owner/charterer raised by the learned counsel for the contesting defendant is not sustainable.
C.M.A. No, 2270 of 2004 under Order VII, Rule 11, C.P.C. Is dismissed."
19. This question was also considered by learned Division Bench of this Court in the case of Bangladesh Shipping Corporation v. M.V. Nedon and another (PLD 1981 Karachi 246), wherein learned Division Bench dealt with the issue in the following words:- ' Regarding the matter historically and legally an action in rem is against a ship without making it as a defendant. The real defendants are described as owner of or persons interested to the ship, and the writ of arrest may be effected by serving it on the ship which may be accepted by the Master, owner or by nailing or pasting it on the Mast or other conspicuous part of the ship. As a consequence of such service if the owner or any person interested in the respondent enters appearance and puts up the defence then the person so appearing becomes party to the action and thereby becomes personally liable for whatever may be decreed against him. If no appearance is entered the action remains as an action in rem operating only against the ship arrested and if a judgment is passed in favour of the plaintiff it can be enforced by sale of the ship but not against the owner personally or any of his property. If any authority is needed reference can be made to the observations made by Lord Denning M.R. In the case of The Banco (1371) 1 AER 524."
20. Finally above point was dealt with by the honourable Supreme Court of Pakistan in the case of Yukong Ltd. South Korean Company, Seoul, South Korea (supra) in the following words:--
17. Action in rem primarily is against the property which eventually may be arrested and sold out to satisfy the claim. Such action is resorted to in respect of any claim or question within the Admiralty Jurisdiction, irrespective of the fact that it is in the nature of a maritime lien or not. In fact, it is a proceedings against the ship. In the words of Lord Watson the action is a remedy against the corpus of the offending ship Sir George Jessel M.R. Described the process in rem in the following terms:-- "You may in England and in most countries proceed against the ship. The writ may be issued against the owner of such a ship, and the owner may never appear, and you get your judgment against the ship without a single person being named from beginning to end. That is an action in rem, and it is perfectly well understood that the judgment is against the ship.
18. The action in rem and action in personam are distinct. In case of former, it is the proceeding against ship, whereas in the latter it is a proceeding inter partes."
21. In view of above legal position, objection of defendants as to joinder of vessel as well as owner raised by learned counsel for defendants is not sustainable, accordingly same is repelled.
22. With regard to the contention of learned counsel for the plaintiff that defendants Nos.2 and 3 being the registered wners/beneficial owners of defendant No,1 and they are the subsidiary of defendant No,3. To deal with the above question it will be advantageous to quote the provisions of sections 3 and 4 of the Admiralty Jurisdiction of High Court Ordinance 1980 (hereinafter called Ordinance 1980):-- "3. Admiraltu 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. Admiralty 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:- (a)
(b)
(c)
(d)
(e)
(I) ----------------------------------------------------
(g) any claim for loss of or damage to goods carried in a ship;
(h) any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship
(i) (1)
(k) -------- (1)
(n1)
(n)
(o)
(p)
(q)
(r)
(3)
(4)
(5)
(a)
(b)
(c)
4. Mode of exercise of Admiralty jurisdiction.--- (1) Subject to the 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 in rem against the ship or property in question.
(3) In any case in which there is a maritime 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 (i) to (q) of 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 or 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---"
23. Section 4(3) of the Ordinance, 1980 enables a plaintiff to invoke the Admiralty jurisdiction against the ship in connection with which the claim arises, whether or not at the time when the action is brought, it remains in the same ownership.
24. Section 4(4) of the Ordinance, 1980 enables the plaintiff to invoke Admiralty jurisdiction, in respect of any such claim as is mentioned in clauses (e) to (h) and (i) to (q) of 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 is personam was, when the cause of action arose, the owner or the charterer of or in possession or in control of the ship, the Admiralty jurisdiction of High Court may, whether the claim gives rise to a maritime lien or the ship or not may be invoked by an action in rem against:--
(a) that ship, at the time when the action is brought it is beneficially owned as respect majority share therein by that person; or
(b) any other ship which at the time when the actions is brought is beneficially owned as aforesaid.
25. In applying section 4(4) of the Ordinance, 1980 one has to take into consideration the existing facts at the time when cause of action arose in connection with offending ship. In order to invoke the jurisdiction, the plaintiff has to plead that--
(a) The claim falls in any of the clauses (e) to (h) and (j) to (q) of subsection (2) of section 3 and arises in connection with a ship.
(b) When the cause of action in personam arose.
(c) The person liable in an action in personam at the time when such cause of action arose, was the owner or charterer of or in possession or in control of the offending ship.
(d) The offending ship or any other ship when is sought to be arrested at the time when action is brought is beneficially owned as respect of majority shares by the person liable on the claim is an action in personam.
26. The significant expressions in the provisions are beneficially owned as respect majority share.
The person liable for the claim in an action in personam should beneficially own majority shares.
On compliance of this condition an action in rem for arrest of a sister vessel can be filed. Lord Denning in I Congreso del parlido 1(1981)1 1 All Englan Law Reports 1092 while considering the effect of section 3(4)(b) of Administration of Justice Act, 1956 (analogous to section 4(4) of the Ordinance with slight difference with regard to the beneficial ownership as respect of the shares. In British Act, the person. Who would be liable on the claim in an action in personam should beneficially own majority shares, whereas in the Ordinance such person should own majority shares) said:- ' In applying section 3(4)(b) you have first to consider the position at the time when the cause of action arose in connection with offending ship. You have then to discover a person who would be liable on the claim in an action in personam. Having discovered him, you have to consider the position at the time when the action is brought. You have then to enquire whether that person at that time beneficially owned any ship (a sister ship) besides the offending ship. If there is such a person, you can invoke the Admiralty jurisdiction of the High Court against that sister ship.
27. The pre-condition for invoking jurisdiction under section 4(4) (a)(b) of the Ordinance, 1980 is that the person who would be liable on the claim in an action in personam was, when the cause of action arose should beneficially own, majority shares in the ship.
28. Learned counsel for plaintiff has submitted that defendant No,3 are the Managers/Operators/Beneficial owners of defendant No,1 hence they are to be held liable to pay claim of the plaintiff. Such point has come up for consideration in the case of M.V. Sea Success I (supra), where the learned Judges of Bombay High Court have held as under:- ' In maritime law world wide ownership of a ship is denoted by the concept of the owner of the shares in a ship. The shares in the vessel in question were not alleged in the plaint to be owned by defendant. The ownership of the ship by defendant was alleged to be on the basis of the defendant wholly owning subsidiary. Fundamentally each company incorporated in law is a distinct legal entity and mere incorporation of 100% subsidiary company by its parent company cannot lead to the conclusion that the assets of the former belong to and are owned by parent company. It is not that in all cases a subsidiary company must be treated as an asset of the holding company. If that be so, the subsidiary company shall have no independent identity and such subsidiary company wilt crack not under the pressure of its own uncongenial shareholders, but also of the pressure of the shareholders and creditors of the holding company."
29. In the case of Messrs Maratos and Co. (supra) it was held as under:-- 'Perusal of all these authorities makes it clear that legal position with regard to interpretation of section 4(4) of the Ordinance is well-settled. A ship which is not connected with the claim arising under clauses (e) to (h) and (j) to (q) of subsection (2) of section 3 of the Ordinance can be subjected to an action in rem if it is established that when the claim under the aforestated provisions arose in connection with a ship, the person who would be liable in an action in personam was the owner or charterer of or in possession or in control of that ship and further that when the action is brought the same person is beneficial owner of majority shares in the other ship in respect of which writ of arrest is being sought to be issued. Mere possession and control of the other vessel as charterer, manager or operator does not fall within the meaning of words "beneficial owner" as regards majority shares therein. These words connote a definite meaning conveying an interest of that person in the majority shares of vessels as their owner. The charterer, operator or manager do not have right of ownership in the shares of the ship. Such ownership of shares may be real or beneficial."
30. In the case of Global Tradeways Ltd. (supra) learned Single Judge (Now the honourable Chief Justice) of this Court has held as under:-- ' From the discussion made above I am of the view that shipping agent of various vessels is not responsible for payment of the dues of the vessel unless it is otherwise undertaken by such agent.
In any case, even it is presumed that agent undertook to pay dues of on behalf of any particular principal or vessel, such undertaking on behalf of one principal or vessel cannot be enforced against another principal or vessel owned by different person. Any other vessel may be arrested, under the admiralty jurisdiction of this Court only when it is prima fade shown that other vessel is also beneficially owned by the same owner against whom a maritime lien exists."
31. In the case of V.N. Lakhani and Company (supra) the honourable Supreme Court of Pakistan has held as under:-- ' The pre-condition for invoking jurisdiction under section 4(4)(a)(b) is that the person who would be liable on the claim in an action in personam was, when the cause of action arose, should beneficially own majority shares in the ship only then sister-ship can be arrested. If we take the view that the words "beneficially owned' may include even a demise charterer then words "as respects majority shares' will be completely redundant.
' The ownership of majority shares may be beneficial or legal is a condition precedent for invoking the jurisdiction. It is a well-settled principle of interpretation of statute that each and every word of a statute has to be given its meaning and no part of a statute can be treated as redundant or surplus. It, therefore, seems clear that the legislature intended to give an effective meaning to the words "as respects majority shares" which can only be attributed to the owneRs,"
32. The contention of the learned counsel for plaintiff that Gloryship Management Pte. Limited being managers/ operators/beneficial owners of defendant No,1 vessel being the principal of defendant No, 2, who is the alleged subsidiaries of defendant No,3. As held by Bombay High Court in the above referred judgment in Maritime Law world wide ownership of a ship is denoted by the concept of the owner of the shares in a ship. The shares in the vessel in question were not alleged in the plaint to be owned by defendant No,
4. The ownership of the defendant. No,1 vessel was alleged to be on the basis that defendants Nos.2 and 3 were subsidiary of defendant No,4. Fundamentally each company incorporated in law is a distinct legal entity and mere incorporation of 100% subsidiary company by its parent company cannot, lead to the conclusion that the assets of the former belong to and are owned by parent company. It is not that in all cases a subsidiary company must be treated as an asset of the holding company. If that be so, the subsidiary company shall have no independent identity and such subsidiary company will crack not under the pressure of its own uncongenial shareholders, but also of the pressure of the shareholders and creditors of the holding company. Further, a bald statement in the pleading that the ship in question was the sister ship of offending ship or the inference that the ship was a sister ship for the reasons disclosed which is not legally sustainable cannot be held to be sufficient to disclose a cause of action. There is nothing on record to suggest that defendant No,3 has any share in ownership in defendant No,1-vessel nor any shareholding in defendant No,2-company. Defendant No,3 is entirely distinct legal entity than the defendant No,2. In the circumstances defendant No,3 cannot be held responsible for payment of any alleged claim against defendants Nos.1 and 2 in the respective suits as defendant No, 3 is neither the registered owner of defendant. No,1 nor has any concern with defendant No,2.
33. To support the claim of plaintiff, learned counsel for the plaintiff has invited my attention to the commercial invoices, bill of ladings, survey report dated 10-4-2010, dry certificate after discharging, joint dip statement and letters of Chief Officers to the Master of M.T. GALAXY and has submitted that from the perusal of the above it will be seen that invoices and bill of ladings show the manifested consignment whereas survey report dated 10-4-2010 shows short landing of 88.295 Metric Tons of Crude Palm Oil in Suit No,2 of 2001, 7.784 Metric Tons of Crude Palm Oil in Suit No,5 of 2001, 7.783 Metric Tons of Crude Palm Oil in Suit No,6 of 2001 and 3.856 Metric Tons of Crude Palm Oil in Suit No,7 of 2001. Learned counsel for the plaintiff has further submitted that apart from survey reports the above short landings are further confirmed from the perusal of letters titled as "discrepancy bill of ladings and ship quantity" addressed to the Master of vessel by Chief Officer of the vessel. He further says that aforesaid short landing is also established from the perusal of joint dip statement.
The defendants have not denied the genuineness of these documents mentioned hereinabove.
The plaintiff prima facie has made out a case for confirmation of earlier order of arrest of defendant No,
1. The actual quantum of loss is yet to be established by the plaintiff by leading evidence but at this stage a tentative assessment of the record suggests that plaintiff has made out a case of confirmation of orders dated 12-1-2011 in Adm. Suit No, 2 of 2011 and 15-1-2011 in Admin.
Suit Nos. 5 of 2011, 6 of 2011 and 7 of 2011.
34. In the aforesaid circumstances if the arrested vessel is allowed to leave the limits of the courts jurisdiction without a security, the suit shall loose its utility. It may not be possible to execute the decree if any passed, as by time the suit will be finalized the vessel may sink or she may be purchased by a bona fide purchaser without notice. Accordingly these applications 5 of 2011, 26 of 2011, 28 of 2011 and 30 of 2011 are allowed and the interim orders passed on 12-1-2011. And 15-1-20 1 in the above suits are hereby confirmed.