1. The plaintiff has filed this suit under the Admiralty Jurisdiction against the defendant for recovery of Rs. 1,40,32,900. The suit was filed on 10-5-1984. The defendant No.1 had been arrested in Admiralty Suit No.252/84, on 18-4-1984 and was sold under the orders of the Court on-30-7-1984. The sale proceeds are deposited in this Court. However, after this suit was filed the vessel was ordered to be arrested although it was under arrest in several other suits.
2. The plaintiff is a representative of AI Bors Insurance Co., of Tehran and the endorsee of eight bills of lading bearing No. HB/BAO1, 1, 2, 3, 4, 5, 6 and 7. The consignees under the bills of lading are Iranians and in the course of their business imported galvanised steel, wool dry salted hides and west salted hides hereinafter referred as Iranian Cargo. The price of the goods was paid by the importer in foreign exchange to the foreign shippers who shipped the said cargo on board, the Defendant No.1 under bills of lading issued by defendant No.3. The goods were shipped in October 1983, and were to be discharged at port Bandar Abbas. The defendants delayed the delivery of the cargo without any valid reason or justification and failed to perform their contractual obligations. While the defendant No.1 was at Jabooti she refused to leave for Karachi and made illegal demands. Due to illegal and unauthorised attitude of the defendants, under coercion and duress the plaintiff had to take steps for carriage of the said cargo from the port of Jabooti to Karachi, and incurred an expense of US $150,000. The vessel reached Karachi and while the goods were on board several other consignees filed suit. The defendants have not taken any step to proceed to Bunder Abbas or deliver the Iranian Cargo for transhipment. According to the plaintiff due to improper storage and pilferage, on the basis of information received by him, the damage to the cargo amounts toRs.
3. 68,35,000. The plaintiff has quantified his claim as follows: ----
(i) Amount incurred and to be incurred at the port of Djibouti in respect of towage.
(i) Amount incurred and to be incurred at the port of Djibouti in respect of towage.US $ 150,000 Pak.
4. Rs. 20,50,500.
(ii) On account of damage and loss to the said cargo up to the date of filing of suit.US $ 500,000.
5. Pak.
6. Rs. 68,35,000.
(iii) On account of undue delay and detention of the said cargo.US $10,241.40 Pak. Rs. 1,40,000.
(iv) Amount to be incurred for transhipment from Karachi to Bandar Abbas.US $ 220,000 Pak. Rs.
7. 30,07,400.
8. Amount to be incuredat Karachi for discharge of the cargo from the vessel "Rice Trader".US $ 73,152.80 Pak. Rs.
9. 10,00,000.
(vi) Amount to be incurred in respect of the maintenance of the vessel at Karachi the Irani cargo share).US $ 73,152.8, Pak. Rs.
10. 10,00,000.
11. Total-US 10,26,547.18 Pak. Rs.
12. 1,40,32,900
(vii) Further and additional by the receiver to get the said cargo discharged, stored and delivered to the plaintiff.
13. The plaintiff claims that he is entitled to recover the said amount from defendants by arrest of the defendant No.1, the offending vessel on which the cargo had been loaded. The defendants in spite of service have not appeared.
14. The salvers, mortgages and companies, which had supplied bunkers and necessaries as wall as the crew members of other vessels claiming that they were engaged in the sister vessel of m.v.
15. Rice Traders have filed suit, against the defendant No.1 for recovery of their dues and have intervened in the proceeding. All these matters have proceeded together and the witnesses of the plaintiff have been cross-examined by the advocates of these intervening parties. They have disputed the correctness of the plaintiff's claim and also claimed priority. The question of priority will be decided after the claim has been decreed.
16. The following issues arise:- .
17. (1)Whether the plaintiff is entitled to Rs.1,40,32,900.
18. (2)Whether the plaintiff is entitled to recover the decretal amount if any for the sale proceeds of m.v. Rice Trader.
19. The plaintiff has filed two affidavits of ex parte proof and documents. He has been cross-examined by the advocates as stated above. So far shipment of cargo under bills of lading Nos.2, 3, 4, 5, 6 and 7 and their issuance by Manta Line Inc for carriage on board Rice Trader from Mozambique to Bandar Abbas is concerned the same stands proved. According to the plaintiff these bills of lading have been endorsed in his favour.
20. The cargoes under these bills of lading were scoured wool type, v. Salted hides, and dry-salted hides. According to the plaintiff the defendant No.1 without any justification refused to leave the print of Jabooti for Karachi and the plaintiff had to take steps under duress for carriage of the suit cargo from the port of Jabboti to Karachi. He claims that in this respect US Dollars 150,000 have been spent. The necessity for bringing the cargo to Karachi arose as the Iranian cargo was stowed under the Karachi cargo and therefore, unless the Karachi cargo had been discharged Iranian cargo could not have been off loaded. He has Claimed damages for incurring expenses for loading, unloading and transhipment of the cargo and salvage contribution made by him. The plaintiff has enumerate his claim in para. 9 of the affidavit of evidence and filed documents in support thereof.
8. The first claim of Rs. 24,31,392 is in respect of towage from Djibooti to Karachi. He has filed photo- copy of a letter from M/s. Walter and Morse to Abroze Insurance Company enclosing a copy of the letter whereby they stated to have remitted cheque for US Dollar 151,926.11 to M/s. Clide & Co., which was credited to their account. No further details by the company have been produced. In the letter addressed to M/s. Cilde & Co., reference has been made to an agreement under which the afore stated amount is alleged to have been remitted but that agreement has not been produced. The evidence in support of claim for Rs. 24,31,392 is not convincing and does not prove the same.
21. The next claim is for Rs. 30,40,000 equivalent to US $190,000 on account of damage and loss to the cargo. In the plaint under this head the plaintiff has claimed Rs. 68,35,000 but in the affidavit of proof he has finally quantified it as Rs. 30,40,000. The plaintiff has not given any details of damage, but has filed photo-copy of a report issued by Iran Group of Surveyors dated 5th February, 1985. A survey of wet-salted hides was carried out at Chah Bahar Bahamar Jetti on 1-1-1985. As is clear from this report the goods were trans-shiped from Gowadar, Pakistan to Chah Bahar on board m.v.
22. JUNIOR. On 24-9-1984 JUNIOR sailed from Karachi to Gawadar and there she waited for further instructions with cargo on board. On 29-12-1984 JUNIOR departed from Gawadar and arrived at Chah Bahar on 13-3-1984 and berthed on 14-1-1984. These goods were originally shipped on board m.v. Rice Trader in good order and condition. The survey report discloses that m.v. JUNIOR was not equipped with ventilating system and her hatches were not watertight. The cargo had been dumped into holds No.1 and 2 adjacent to bundles of wool. The holds were criss--crossed with spider webs indicating that the cargo had remained untouched for a long period. Bales were covered with nylon sheets and further over wrapped with nylon sheeting---s. When bales were opened some of them were infested with a species of insect most probably grants. Hides were so tightly stuck together that it was not possible to separate them by any means whatsoever. The hair on the outer side of the hides could be removed by a gentle kick while the inner flesh sides were covered with coloured patches. According to the surveyors the cargo was extensively damaged or decayed for the following reasons:- (1)The vessel is not suitable for carriage of this type of commodity.
23. (2)The cargo had remained in' the holds for a period of about one year. Whether conditions viz. Changes in temperature, humidity etc. Had damaged the cargo.
24. (3)The bales had not been properly stowed in the holds.
25. (4)The holds were not loaded with homogeneous cargo: bales of wool, which are liable to damage by moisture, had been loaded in the same holds as the hides.
26. (5)When being packed as bales, the hides had been bent and folded."
27. From this survey report it is clear that the damage has been caused due to bad stowage, defective packing and the cargo remaining in the holds for a long period. There is nothing on record to show that when the goods were discharged at Karachi for transhipment the same were surveyed or inspected. The goods were carried from Mozambique to Karachi and from Karachi they were transhipped to Bander Abbas. In the absence of any survey report at Karachi it is difficult to fix liability for this damage on the defendants. Survey report clearly suggests that most of the damage seems to have been done while the goods were on board JUNIOR during the process of transhipment. The plaintiff had himself arranged transhipment of the cargo and had hired the vessel m.v. JUNIOR Therefore, in these circumstances the Plaintiff's claim for Rs. 30,40,000 toward, ` damage and loss to the cargo has not been established. In para. 9(iii) of the Affidavit the claim for US Dollars 10,241,40 being the damage for delay any 8 detention of cargo has not been pressed.
28. The plaintiff has claimed Rs. 51,39,552 equivalent to US $321,222 being the expenses incurred for transhipment of cargo. In the plaint the plaintiff hoc claimed Rs. 30,07,400 but in the affidavit of proof it has been increased without amending the plaint. There should be no variance between pleading and proof without amending the plaint with the leave of the Court, the claim cannot b% enhanced by mere producing evidence to that effect. To prove; the expenses for chartering the vessel the plaintiff has produced contract of affreightment between the owner of m.v. JUNIOR and M/s. Alborz Insurance Company who were the consignees of the goods. Another contract of affreightment regarding m.v. Rasa has also been filed but no further details have been given. No document has been filed to prove transhipment by m.v. Rasa. The plaintiff has filed the following six freight invoices.
29. "(1)Ex. D/12 US $ 3,350.16 In respect of bill of lading No. 1 (2)Ex. D/13 US $1,444.31" " " No. BN/BAO I.
30. (3)Ex. D/14 US $10,564.37" " " No. 5.
31. (4)Ex. D/15 US $ 7,402.50" " " No. 3.
32. (5)Ex. D/16 US $10,546.80" " " No. 7.
33. (6)EX. D/17 US $ 14,429.00"" " No. 2.
34. Total:47,737.14."
35. The plaintiff has claimed transhipment and discharging charges and other expenses in respect of nine bills of lading mentioned in para. 3 of the affidavit of proof. Bills of lading No. 2 to 7 relate to cargo shipped on board Rice Trader from Maboto, Africa. The bill of lading number 1 is in respect of goods shipped on board m.v. FRANKY from Maboto whereas goods under bills of lading No. HB/BAO1 were shipped on board FRANKY from Hamburg and goods under bill BN/BAO1 were shipped on the same vessel from Bremen. The plaintiff has not explained how these three bills of lading which are in respect of m.v. FRANKY were included in respect of claim of goods shipped on board m.v. Rice Trader. These bills of lading were issued by Manta Line but as the owners of Rice Trader and m.v. FRANKY have not been proved to be the same persons at the relevant time and the conditions laid down by section 4(4) of the Admiralty Jurisdiction of High Court Ordinance have also not been satisfied, the claim in respect of these 3 bills of lading cannot be entertained.
36. Under a contract of affreightment m.v. JUNIOR was hired for carrying cargo of 299.136 m.v. Of galvanized steel sheet and 778 bales of dry-salted hides. The freight was fixed at the rate of US $ 47 per metric ton CBM. This contract covers shipment of 400 bales under bill of lading No. 4 and 378 bales under bill of lading No. 6. The cargo of galvanized steel sheet relates to the bills of lading No. HB/BAO1 and BN/BAO1 and cannot be entertained. The shipment of cargo under bills of lading No. 2, 3, 5 and 7 is covered by the frieght invoices Ex. 14 to 17.
37. Except Ex. D/12 and Ex.~D/12.Which relate to bills of lading No. 1 and No. BN/BAO1 all other freight invoices relate to the cargo which were discharged from m.v. Rice Trader. The total amount of four frieght invoices comes to US $ 42,942.67 equivalent to Rs. 5,87,026.29. The plaintiff has transhipped 778 bales under the contract of affrightment at a cost of US $ 23,617.97 equivalent to Rs. 3,29,943.
38. The plaintiff thus spent Rs. 9,16,969.33 towards shipment of cargo which were discharged from RICE TRADER.
39. I am not inclined to grant the amount of freight relating to cargo discharged from m.v. FRANKY as it has not been explained anywhere in the plaint or the evidence how this cargo can be treated as cargo discharged from m.v. RICE TRADER.
40. The plaintiff has also claimed cost incurred for discharge of the cargo from Rice Trader at Karachi estimated at Rs. 10,00,000 but in the affidavit of evidence it has been enhanced to Rs. 18,88,000.
41. Such increase as stated above is not permissible. In support of this claim the plaintiff has filed the bills of South-- West Asia Shipping Agency. Ex. D/19 relates to bill of lading No. HB/BAO 1. From reasons stated above the expenses claimed under it cannot be granted to the plaintiff as it relates to m.v. FRANKY. Ex. D/20 relates to expenses incurred for transhipment of cargo under bills of lading No. 4 and 6. In this bill I will grant items Nos. 1, 2, 3, 4, 5 and 21; the rest of claim is not allowed as no document to prove these expenses has been produced. By producing the bill alone these expenses cannot be deemed to have been proved. Ex.D/22 relates to bill of lading No. 7. In this bill also expenses under items Nos. 1 to 5 are allowed and the rest are rejected for want of any proof. In this case agency commission is not allowed as it can be granted only once and not on every service rendered by the agent. Annexure D/23 relates to bill of lading No. 5. For the same reason expenses under items 1 to 5 are allowed, the rest are rejected. Ex. D/24 relates to bill of lading No. 3. In this bill also expenses under items Nos. 1 to 5 are allowed and rest are rejected. Ex. D/25 is in respect of bills of lading No. 2. The expenses under items Nos.1 to 5 are allowed and the rest are rejected. The plaintiff has also filed Ex. D/26 which is a bill for the additional barge hire from 1-7-1984 to 24-8- 1984. In all the afore stated bills the plaintiff has claimed barge hire for 40 days but the dates have not been specified. From Ex D-26 it is not clear whether the amount claimed under it is not covered by the afore stated bills. It is pertinent to note that in the bills Ex. D/19 to D/23 while claiming barge hire for 40 days the plaintiff has claimed charges for watchmen for 40 days. It means that so long the goods were in the barges watchmen had been engaged. But in this additional bill nothing has been claimed for expenses for the watchmen. Therefore either bill Ex. D/26 is wrong or the bills submitted earlier in which charges for watchmen were claimed is wrong. It is a matter of common knowledge that watchmen are usually engaged to guard the goods on barge. The absence of watchmen for such a long period lends support to the view that claim under Ex. D/28 is false and fictitious. The claim under Ex D/28 is rejected. Under this head the plaintiff is entitled to Rs. 4,42,790.
42. The plaintiff has also claimed Rs. 1,50,000 in respect of maintenance of vessel at Karachi. In fact in the plaint US $73,152.89 was claimed but it has been reduced to US $9,375. So far as the maintenance of the ship is concerned, the amount claimed in it is also claimed in Annexures D/19 to D/22 and hag not been allowed for want of proper proof. To establish the claim for expenses of maintenance except the affidavit and the bills of South-West Asia Shipping Agency no other documents have been produced. Surely this Agency was not the company which had maintained the ship or carried out the repairs. The plaintiff himself had made a claim much in excess than stated in the affidavit but has not shown any basis for such a claim for its reduction. This claim is therefore, disallowed.
43. The last item in the statement of claim is the salvage contribution of Rs. 8,60,000 allegedly paid by the plaintiff to the salvers. The vessel had stranded on high seas and required urgent salvage service which was carried out by the salvers who have filed Admn Suit No.316/84 and have also obtained an award against the defendant No.1 from the Arbitrator. There is no allegation in the plaint that the vessel was stranded on high seas due to negligence of the owners, manager or operators of the defendant No.1. It is well settled that "where the ship-owner has paid salvage due in respect of the cargo, he is entitled to have a lien upon the goods in possession for their proportion". Reference can be made to Briggs v. Merchant Traders Association (1849) 13QB 167 and Hingston v. Wendt (1876) l.QB.D.367. Where salvage service is necessary because of the fault or negligence---s of the owner he cannot claim contribution from the owner of the cargo. Reference can be made to the Etrick (1881) 6 P.D.127 and Cargo Excapella (1867) LB IA & E 356. According to Carrvar Carriage by sea Vd.2 (British Shipping Law 13th Edition) "where the cargo owners have been compelled to pay salvage in consequence of improper acts of the master e.g. a wrongful abandonment of the ship, they may claim repayment from the ship for the amount". Reliance for this observation has been placed on the PRINCESS ROYAL (1870) LR 3 A&E 27,41. In the present case no allegation has been made that salvage service was as a consequence of misconduct on the part of the vessel, Master or her owner. In these circumstances I am not inclined to grant salvage contribution made by the plaintiff. The suit is decreed for Rs.1,359,759.33, Now the question arises whether the plaintiff is entitled to priorit3 against the claim for salvage, mortgages and the claim of companies which have supplied bunkers and necessaries. Several suits have been filed by the crew members of Sugar Trader, but the same have been dismissed, and therefore, question of propriety of their claim does not arise. Lipton Pakistan Limited in Suit No.254/84 has claimed Rs. 9,48,963.94 which has been decreed and is to be satisfied out of the funds available with the Nazir from the sale proceeds of Rice Trader, subject to the claim of other plaintiffs, if they have priority over the claim of Lipton. Therefore, while considering the question of priorities Lipton's claim should also be taken into consideration. This amount has been claimed fog maintenance of the ship after it had been arrested till such time Rice Trader was sold under the orders of the Court. In the World Star reported in 1987) 1 Lloyd Law Reports 452 it was held that:- "a warrant of arrest could not be executed by the Marshal until there had been lodged in the Marshal's office an undertaking to pay on demand his fees and all expenses incurred by him or on his behalf in respect of the arrest of the ship while under arrest, such undertaking had been lodged by the plaintiffs before World Star was arrested, and the plaintiffs were entitled to recover 47,100 which had been paid to Marshal in priority to all other claims any claimant on the funds in Court resulting from a payment out to the plaintiff of 47,100 in respect of out of pocket, expenses of the Marshal in connection. With the arrest and preservation of the ship since whichever claimant arrested the ship would have had to make those payments, a grave injustice would be done to the plaintiffs if they were held out of this money uptill they obtained a judgment in their action and this sum should be paid to the plaintiffs forthwith.
44. Lipton Pakistan Limited had paid the cost for the arrest of the vessel. It had maintained her from the date of arrest till she was auctioned. Therefore, Lipton is entitled to have priority over all other claims because unless it would have instituted action, got the ship arrested and maintained her, perhaps other claimants who have made the claim subsequently may not have been able to lay their hands on the ship or the sale proceeds. In these circumstances relying on the observation of the judgment quoted above the first priority will be of Lipton Pakistan Ltd. In Suit No.252/84. In this regard reference can be made to British Shipping Law Vol. I Admiralty practice page 742 para. 1574 published in 1964 where Rules of priority have been summarised as follows:- "(1)Marshal's charges, expenses, etc. Are in practice paid in priority to all claims, priorities are determined in relation to the not fund available thereafter or, alternatively, if an arresting plaintiff pays the charges, etc., in accordance with his undertaking, he will recover the sum paid as costs (see. 2 infra).
45. (2)The costs of the plaintiff in whose action the res was arrested up to the moment of arrest and including the costs of arrest, and later costs up to and including appraisement and sale, either of the plaintiff or, where the order for appraisement and sale was obtained in a different action, of the plaintiff in the latter action, are accorded priority over all other claims, whether for costs or not.
46. These apart, costs are ranked with or immediately before or immediately after the claim in respect of which they arise.
(3) A possessory lien, although postponed to earlier maritime liens, has priority over subsequent liens, maritime or not. If the Court orders possessory lien holder to relinquish possession the order will include protection for any rights he may prove to have.
47. (4)(1) Salvage has priority over:
(a) earlier damage;
(b) earlier salvage, if distinct and on a different occasion;
(c) earlier wages;
(d) earlier claims to forfeiture by the Crown;
(e) subsequent possessory liens; (f) necessaries;
(g) execution creditors causing the ship to be seized by the sheriff after the salvage services were rendered, and the sheriff claiming in respect his charges and expenses;
(h) mortgages.
(2) Salvage claims in respect of the same casualty rank pari passu.
(3) Claims for life salvage have priority over claims for salvage of property.
48. (5)(1) Damage the priority over:
(a) earlier salvage;
(b) Wages;
(c) subsequent possessory liens;
(d) necessaries;
(e) execution creditors and sheriff as in 4(1) (g), supra;
(f) mortgages.
(2) Damage ranks pari passu with damage, earlier or later.
49. (6)(1) Wages have priority over:
(a) earlier salvage;
(b) subsequent possessory liens:
(c) necessaries:
(d) execution creditors and sheriff, as in 4(1) (g), supra;
(e) mortgages.
(2) Masters' wages and disbursements both rank as masters' wages.
(3) Masters' wages and disbursements rank, subject to (6) infra, p--ari.
(4) Crews' wages rank subject to (6) infra, pari passu.
(6) Where salvage is interposed between wages earned before and wages earned after the services, the later-earned wages have priority over earlier-earned.
(7) Wages include repatriation expenses, subsistence allowance, etc.
(8) Special considerations apply in certain circumstances where a is also a part-owner.
50. (7)Mortgage priorities are as follows: (1)British registered mortgages have priority by registration over earlier (or later) unregistered or foreign mortgages even through there is notice of the unregistered or foreign mortgage.
(2) British registered mortgages have priority inter se according to date of registration.
(3) Mortgages have priority over necessaries unless the ship was already under arrest for the necessaries when the mortgage was entered into.
(4) Unregistered and foreign mortgages have priority inter se according to the dates when they were entered into, subject to the rules of equity governing equitable mortgages.
(5) A mortgage has no priority over a possessory lien, for a possessory lien has priority over all claims except earlier maritime liens.
(6) A mortgage has no priority over a martitime lien.
51. (8)Necessaries usually have a very low priority.
(1) When a ship has been arrested in a necessaries action, the necessaries have priority over mortgages entered into after the arrest.
(2) Under similar conditions, necessaries have piority over an execution by which a sheriff seizes the arrested ship.
(3) Necessaries rank pari passu inter se and no date is of any consequence.
52. (9)Contractual claims, e.g., for breach of chart party, seem to rank as if the claims were claims in respect of necessaries.
(10) In certain circumstances, subrogation, depending upon leave of the Court, and liquidation or bankruptcy proceedings, may affect matters. It is to be borne in mind, too, that the Administration of Justice Act, 1956, section 3(4)(b), has not yet been the subject of judicial consideration of Justice Act, 1956, section 3(4)(b), has not yet been the subject of judicial consideration as regards priorities".
53. The question of priority has been fully discussed in Tawaha v. Master m.v. Asian Queen PLD 1982 Kar. 749 and reliance has been placed on the afore stated principle.
54. I am in respectful agreement with the afore stated principles which determine the claim of priorities amongst the claimants inter se. In view of the afore stated discussion the suit is decreed for Rs. 13,59,759.33 with cost of court-fee. The decree shall be satisfied from the sale proceeds of m.v. Rice Trader provided any amount is left after payment to other claimants in terms of rule of priority as stated above.
55. A.A./H-116/K