' Miscellaneous No, 685 of 1988 is an application for arrest of the ship m.v. "Kashmir" made by plaintiff. An interim order was passed on this application on 14-5-1988 for arrest of the ship by the then Hon'ble Chief Justice. The order of arrest was served on the ship, but the ship left the jurisdiction of this Court. The ship again anchored at Karachi Port with the changed name m.v.
"Naran" and was ordered to be arrested by my learned brother Mr. Justice Mazhar All on 23-7-1988.
On 28-8-1988 Miscellaneous No, 970 of 1988 were filed by the Intervenor for release of the ship.
' For the disposal of these two applications it will be useful to briefly narrate the facts of the case.
2. Plaintiff Kuwait Flour Mills Company has instituted this suit for recovery of U.S. Dollars 10, 80,551 equivalent to Pakistani Rs, 1, 91, 25,752 against defendant No,1 m.v. "Kashmir" and defendant No,2 Swat Shipping Corporation on the allegation that their shipper Toprak Mahsulleri Ofisi, Ankara shipped on 11-3-1988 at Ankara 5650 Metric Tons of Turkish Durum Wheat on board m.v. "Kashmir" to be delivered to the plaintiff at Kuwait. The cargo on the board of the vessel was damaged due to negligence of the defendants. There were leaks in the hull and the sea water found its way into the holds of the vessel. The defendants instead of delivering the cargo to the plaintiff at Kuwait discharged the damaged cargo at Sharjah and left the port and thereby caused loss to them in the above amount. Hence the suit.
3. The contention of plaintiff is that since the writ was served on the ship m.v. "Kashmir" on 14-5- 1988 at Karachi Port within the jurisdiction of this Court, therefore, the departure of this ship from the jurisdiction of this Court amounted to unlawful escape from the arrest. Hence any subsequent change of ownership of the ship was a change during arrest and attachment of the ship and will not be of any effect. When the ship anchored again at Karachi Port on 23-7-1988 it was arrested on the orders of this Court, which was the continuance of the previous orders of arrest.
4. The case of the Intervenors Afrah Shipping Company Sharjah is that it had purchased the vessel m.v. "Kashmir" on 26-5-1988 from Swat Shipping Corporation free of "litigation, liens, or other claims". The said vessel under the new ownership was registered at Port of Ajman under name of m.v. "Kashmir" and later as m.v. "Naran". Hence the Intervenors are not liable nor the ship for the claim of the plaintiff.
5. I have heard Mr. Shaiq Usmani for the Intervenors and Mr. M.H. Kazmi for the plaintiff. The contention of Mr. Shaiq Usmani is that this Court had no jurisdiction to entertain this suit nor it had any jurisdiction to issue writ of arrest on 14-5-1988 because on that day the ship m.v. "Kashmir" was not anchored within the territorial waters of Pakistan and therefore not within the jurisdiction of this Court. In this regard he has drawn my attention to the counter-affidavit of Ainul Haq the Manager of Swat Shipping Corporation who has stated in para. 3 of his affidavit that on 14-5-1988 vessel m.v.
"Kashmir" was not within the jurisdiction of this Court or within the jurisdiction of Karachi Port Trust as the said vessel was 13.5 miles away from Break Waters, Karachi Port. The ship was anchored in international waters. He has then relied upon the letter dated 16-5-1988 by the Deputy Conservator of Karachi Port Trust to this Court. It reads as under:- {{TABLE}} "The Deputy Conservator Karachi Port Trust The Superintendent 0.S., Execution & Misc. Branch, High Court of Sind, Karachi. No, D/G/4411 of 1988. Karachi 16 May 1988.
' Subject: M.V. "Kashmir" at outer anchorage.
' Reference: The High Court Order dated 14-5-1988 in Suit No, 387 of 1988.
' Dear Sir, ' With reference to the order, dated 14-5-1988 by the Hon'ble High Court of Sind in the above suit the following facts are submitted. ' m.v. "Kashmir" is not lying in the port of Karachi. She is at anchor outside Karachi Port limits in the open sea from where she can sail away on her own at any time and the Karachi Port Authorities do not have contact or means to prevent the afore said vessel from being sailed away at any time.
Had the vessel been inside the port she could have certainly been detained as directed by the Hon'ble High Court and not allowed to leave until it was released by the Hon'ble High Court.
' It is, therefore, most respectfully prayed that Pakistan Navy and/or Pakistan Coast Guards be directed to take necessary measures to prevent removal of the vessel from its present position as they are the only agencies who have the required resources to ensure compliance of the orders passed by the Hon'ble High Court in the instant cases and similar other cases. Yours faithfully, (Sd.)
Deputy Conservator."
6. He next referred me to the Chief Officer's Log Book, the original whereof had been shown and returned while the photo copy of the extract whereof has been produced as Annexure B/1. Log Book shows that on Wednesday i.e, 11-5-1988 the ship arrived and anchored at 440 hours and anchored at Manors Light House bearing 945 Degree. Its true distance was 13.5 nautical miles off break water.
According to section 2 of Territorial Waters Maritime Act, 1976 the sovereignty of Pakistan extends to territorial waters and the limit of the territorial waters is 12 nautical miles beyond the land territory and internal waters of Pakistan measured from baseline. He then cited the Law of Sea by R.R.
Churchill and Lowe which at page 26 para. 2 states that if all coastlines were relatively straight and unindented, the question of ascertaining the baseline would be a simple one. All that would be necessary would be to select the high or low tide mark as the baseline. Para. 2 of page /slo.26 of the same book mentions that Article 3 of the Territorial Sea Convention and Article 5 of the Law of the Sea Convention provides in identical words that 'the normal baseline for measuring the breadth of the territorial sea is the low-water line along the coast as marked on large scale charts officially recognized by the Coast State. He then referred me to the book named The Law of the Sea United Nations Convention on the Law of the Sea in which it is mentioned at page 3 Article 5 that except otherwise provided in this convention, the normal baseline for measuring the breadth of the territorial sea is the low-water line along the coast as marked on large scale charts. Officially recognized by the coastal state. Pakistan had signed this convention in 1982. Mr. Shaiq Usmani produced two charts. The first chart shows that the low-water line along Manora break water is zero line and the second chart shows exact anchored position of the ship which is beyond 12 nautical miles from both extremities i.e, Manora Port and Capemonz. He went on argue that the Log Book, the extract of which has been produced by the defendants, may be presumed by the Court to be correct in view of the provision of Sections 2 and 3 of Commercial Documents Act, 1939 which read with Serial No,2 in Part II of Schedule thereof provides that the official Log Book kept by a foreign ship is a document in relation to which the Court may draw a presumption. He then referred to para. 7 of counter-affidavit of Muhammad Ainul Haq filed in CMA. No,685 of 1988 where it has been thus stated "that the defendant No,2 have sold the vessel m.v. "Kashmir" free from all liens to .Afrah Shipping Co. Of Sharjah vide Bill of Sale dated 26th May, 1988, photo copy of which is annexed hereto and marked as Annexure D-3.
7. The Intervenor has then produced a photo copy of the bill of sale of m.v. "Kashmir" as Annexure D-3. The original was produced by Mr. Shaiq Usmani for my inspection. I have compared it with photo copy and returned it to Mr. Shaiq Usmani for being produced at the appropriate time. This bill of sale was' signed by Muhammad Ainul Haq. Ainul Haq was the Manager of the previous owner defendant No,2.
8. It was then contended by Mr. Shaiq Usmani that the claim of the plaintiff was admittedly not a maritime lien. Hence with the change of ownership of the ship the plaintiff was no more entitled to get the ship arrested for recovery of his claim. Mr. Shaiq Usmani referred to section 24 of Merchant Shipping Act, 1984 which is an English stature and is being applied in Pakistan as well which position is not disputed by Mr. M.H. Kazmi, Advocate for the plaintiff, section 24 is reproduced hereunder:- "24. A ship or share therein (when disposed of to a person qualified to own a British ship) is transferred by bill of sale which must be in the statutory form in first Schedule to Act, executed by the transferor in presence of a witness."
7. In the case of the Louis Castrigue v. William reported in English citation Law Report Vol. IV .House of Lords page No,414 at page No,429 lays down the principle for the application of an action in rem.
It will be useful to reproduce the relevant passage: "We may observe that the words as to an action being in rem or in personam and the common statement that the one is binding on third persons and the other not, are apt to be used by English lawyers without attaching any very definite meaning to those phrases. We apprehend the true principle to be that indicated in the last few words quoted from Story. We think the inquiry is, first, whether the subject-matter was so situated as to be within the lawful control of the State under the authority of which the Court sits; and, secondly, whether the sovereign authority of that State has conferred on the Court jurisdiction to decide as to the disposition of the thing, and the Court has acted within its jurisdiction. If these conditions are fulfilled, the adjudication is conclusive against the entire world."
' This decision of the House of Lords explains the case of Re: Aro Co. Ltd. Reported in (1980) 1 AER 1067 where it was held that when writ was issued but not served before commencement of winding-up, the plaintiff, whether he is a secured creditor or not, can ask for continuance of action after the writ once has been issued but this issuance of the writ should have been "with jurisdiction".
Where there is no jurisdiction in the Court at the time when it issued the writ the plaintiff could not continue the action nor could he hold it in rem.
10. The English case The Monica S. Reported in (1967) 3 AER. 740 is also attempted to be distinguished by the learned counsel for the Intervenor on the ,same ground that the writ in rem referred to in this judgment also presupposed that it was issued with jurisdiction. In this connection he has drawn my attention to page 773 where the words, "plaintiff has properly invoked the jurisdiction by bringing an action in rem" are used as an adjective with the words action in rem.
' Reference was also made to the case of The Pieve Superior reported in 2 ARMC (NS) 319 where it was held that if there was no maritime lien the orders could not be availed against any valid charges on- the ship nor against bona fide purchaser.
' Mr. M.H. Kazmi in reply submitted that the ship was within the territorial waters of Pakistan and within the jurisdiction of this Court on 14-5-1988. Plaintiffs' attorney M.Y.Z. Bhatti in his affidavit dated 10-9-1988 stated that vessel m.v. "Kashmir" was anchored on 14-5-1988 at 2.25 degree distance from Karachi Port Trust Manors Signal Tower. Mr. Kazmi explained the letter of Deputy Conservator of the Port, dated 16-5-1988 and pointed out that it did not say that the ship was anchored outside the territorial waters of Pakistan. The only fact that the ship was outside K.P.T. Does not imply that it was beyond the territorial waters of Pakistan. Mr. Kazmi referred to the extract of Log Book produced by defendant No,2 and pointed out that the same was of 11-5-1988 and not of 14-5-1988.
He did not admit the correctness of this entry which according to him was concocted by the defendant No,2 in collusion with the Intervenor.
' He then referred me to the endorsement of the bailiff on the order of arrest, dated 14-5-1988 and submitted that if the ship was outside the territorial waters of Pakistan the bailiff could not have gone to serve without passport and permission from Immigration Authority. Hence it should be presumed that the ship was served within the territorial waters of Pakistan.
' Mr. M.H. Kazmi, Advocate referred to the evidence of bailiff who stated that the ship was anchored at a distance of about 21 miles from Keamari. He then referred to the evidence of Harbour Master and the documents produced by him and stated that according to the Harbour Master and record produced by him the ship was anchored at a distance of 2.3 miles from Keamari. Hence he submits that prima facie it is established that the ship was within the jurisdiction of this Court when it was arrested on the first occasion.
' Mr. M.H. Kazmi -then submitted that for taking cognizance of a suit in respect of a writ in rem and for issuing orders for arrest of the ship thereon it was not necessary that the ship should be present in the territorial waters of Pakistan. Even if the ship was away from Pakistan, the Court could entertain an admiralty suit and could pass orders for its arrest. A person who comes to an admiralty suit and invokes its jurisdiction shall have to show that his case falls within subsection (2) of Section 3 of the Admiralty jurisdiction of High Courts Ordinance, 1984, which the plaintiff has shown. Relying upon the case of Monica S. Reported in Lloyd List Law Report (1967) Vol. II 113 he submitted that in this case the owners of cargo which had been carried in the ship issued a writ in rem in an action in which the defendants were stated to be the owners of the ship. On the date of issue of writ the ship "Monica Smith" was owned by S, but before the writ cold be served the ship was sold to T and the name of the ship was also changed as "Monica Smith T" moved the Court to set aside the writ or service thereof on the ground that they, were not the owner or the lessee on the date of issue of writ or when the cause of action had arisen. It was held that change of ownership after issue of writ but before service for arrest does not defeat a right of action in rem.
Hence the motion was dismissed. The decision made it clear that once the plaintiff had properly invoked the jurisdiction by bringing an action in rem he should not despite a subsequent change of ownership of the vessel be debarred from prosecuting it through all its stages including judgment and its execution against the vessel. The other case relied upon by Mr. M.H. Kazmi is Re: Aro Co. Ltd.
Reported in (1980) 1 AER 1067. It was held in this case that the change of ownership after the writ of arrest is issued is of no effect and the suit in rem is maintainable.
11. After having taken into consideration the contentions of the counsel for both the sides I have come to the conclusion that this Court had jurisdiction to entertain the suit on 14-5-1988 and to issue writ of arrest. I am also of the clear view that the ship was arrested on 14-5-1988 by the bailiff by serving the writ of arrest within the territorial waters of Pakistan and within the jurisdiction of this Court.
' The evidence of the bailiff clearly shows that the ship was only 21 miles from Manora. He went to the ship in a launch and served the orders on Sultan Ali, the Second Officer of the ship. The bailiff has made it clear that he had gone to the ship from passenger pier in a passenger launch and had taken only one hour to reach the ship. From the evidence of the bailiff it is quite clear that the ship was within the territorial waters of Pakistan and only 21 miles away from Manora. The contention of the Intervenor that the ship was anchored more than 12 miles away from Manora and in the international waters seems to be unbelievable and absurd on the face of it. Had it been so it would not have been possible for the passenger launch to have reached there within one hour. Even the Pakistan authorities, such as the Coast Guards, the Immigration Department and the Customs would not have allowed the passenger launch or the bailiff of this Court to cross the territorial waters of Pakistan without a passport or other valid documents. The evidence of the Harbour Master Wazir Khan and the documents brought by him also clearly established that the ship in question had arrived within the territorial waters of Pakistan and had anchored at a distance of 2.3 miles from Keamari.
12. The departure of the ship m.v. "Kashmir" without the permission of this Court after it was once arrested on 14-5-1988 amounted to an escape from the arrest which in other words was unauthorised removal of property after it was attached. The sale of the ship by the defendant No,2 to the Intervenor after such arrest or attachment was also illegal and void. Reference in this connection may be made to section 64 of C.P.C. Which reads as under:- "64. Private alienation of _property after attachment to be Where an attachment has been made, any private Transfer or delivery of the property attached or of any interest therein and any payment to the judgment-debtor of any debt, dividend or other monies contrary to such attachment, shall be void as against all claims enforceable under the attachment."
' Reference in this connection may also be usefully made to the following cases:- ' Tarak Nath Mukherjee v. Sanat Kumar Mukherjee reported in AIR 1929 Cal. 494 (D.B). In this case the share of one Himadri was attached in execution of certain degrees and was sold. An agreement to sell it was entered into before the attachment and was sought to be enforced. It was held that Section 64 makes no distinction between attachments before or after the judgment and that the agreement to sell entered into before the attachment did not create any interest or charge on the property, it cannot prevail against attachment.
' Venkatasubbiah v. Venkata Seshaiya reported in AIR 1919 Mad.
752. It was held in this ruling that an attachment ordered before judgment invalidates an alienation made after the property is actually attached in pursuance of the order, even though the actual attachment was made after the passing of the decree.
' Ragunath Das v. Sundar Das Khetri reported in AIR 1914 PC 129. It was held that attachment in execution of a decree prevents and avoids any private alienation.
' Devisahai Premraj Mahajan v. Govindrao Balwantrao reported in A 1 R 1965 Madh., Prad.
275. It was held in this case that a private alienation of property during the subsistence of attachment would be void as against the attaching creditor and it cannot prejudice his rights. All the rulings referred to above were relied upon in this case.
12. The English cased referred to above by Mr. M.H. Kazmi make it quite clear that after the writ of .Arrest is served, any sale after the said writ of arrest would be of no consequences and a suit in rem would not be defeated by such subsequent sale. In this connection the first case relied upon by Mr. M.H. Kazmi was that of Monica S. Reported in 1968 p. 741; 1967 2 Lloyd's Reports 113; (1967) 3 All England Reports 740.
' In this case the owners of the cargo which had been carried in the ship issued a writ in rem in an action against the owners of the ship. On the date of issue of the writ the ship was owned by S but before the writ could be served the ship was sold to T and the name of the ship was changed. T moved the Court to set aside the writ or service thereof on the ground that they became the owners of the ship after the issue of the writ. It was held that change of ownership after issue of writ.
Even if it was before service or arrest does not defeat a right of action in rem. Hence the motion was dismissed. This ruling not only supports the plaintiff's case that alienation after arrest is void but also goes to the extent of holding that alienation after issuance of the writ is also of no effect.
14. The second English decision relied upon by the plaintiff's counsel is Re Aro Co. Ltd., it is reported in (1980) 1 AER 1067. In this case also similar view was taken and it was held that after the writ of arrest is issued the change of ownership is of no effect and the suit in rem is maintainable. The distinction attempted to be drawn by Mr. Shaiq Usmani in respect of both these rulings is not acceptable because it is prima facie established that on 14-5-1988 the ship had anchored in territorial waters of Pakistan only 2.5 miles from Manora Port and was, therefore, present within the jurisdiction of this Court when the writ of arrest was issued and was served on the ship.
15: Counter-affidavit of Ainul Haq containing the allegation that the ship was not within the jurisdiction of this Court as it was anchored at 13.5 miles away from break waters is denied by the plaintiff by means- of affidavit and evidence to the contrary. The Chief Officer's Log Book of the ship was a document of defendants themselves and did not Create any confidence in the Court's mind specially when collusion was alleged between the defendant No,2 and the Intervenor which was also apparent from their Conduct in the Case. There can be no dispute with the -contention, of Mr. Shaiq Usmani that the territorial waters of Pakistan extend upto 12 nautical miles from baseline but the contention would not help the Intervenor because I have come to the prima facie conclusion that the ship was anchored only 2.5 miles. From Manora Port. Similarly the other contention of Mr. Shaiq Usmani about the claim not being a maritime lien and the cases of Pieve Superior and Louis Castrigue v. William Imrie referred to above would not be of any help to him for the same reason.
16. The conduct of defendant No,2 in this case is reprehensible. Sultan Ahmad the Second Officer of the ship who was present on m.v. "Kashmir" on 14-5-1988 was served by the bailiff with the orders of arrest'. He had signed the summons as well as the order of arrest and endorsed that he has received the same on that day at 4-00 p.m. In spite of having been served with the summons and orders of arrest he removed the ship from anchoring position and left Karachi without any permission from this Court. Even if it is assumed for the sake of arguments that the ship was anchored in international waters more than' 12 nautical miles from the coastline of Pakistan then also in all fairness it was the duty of the defendant No,2 to have apprised the Court of this fact. The defendant No,2 should not have removed the ship from the above anchoring, position and should not have left Karachi until unless it had furnished the security or had obtained permission from the Court to leave Karachi or the place it was anchored. His having left that position and having escaped from the jurisdiction of this Court without any lawful authority after the attachment order was served on him leads the Court to irresistible conclusion that he was present in the territorial waters of Karachi at the time when he was served with the summons and the orders of arrest and that he left his position and thus tried to destroy the evidence of his being present in the jurisdiction of this Court. That is not the end of it. After leaving the jurisdiction of this Court and being fully aware of this suit and the orders of arrest he sold the ship to the Intervenor. This conduct on the part of the defendant No,2 not only reflects against the defendant No,2 but it also creates suspicion in the mind of the Court about the bona fides of the Intervenors who appeared to be in collusion with the defendant No,2 when they alleged that they have purchased the ship from him. It must be remembered that a person who comes to a Court to seek an equitable relief must come with clean hands. The Court will never help a person who comes with unclean hands as has been done by defendant No,2 and the Intervenor in this case.
17. Hence I hold that the ship was lawfully arrested by the Court and its unauthorised escape therefrom was illegal. Consequently I confirm the order of arrest and grant Miscellaneous No,685 of 1988 and dismiss Miscellaneous No, 970 of 1988 and refuse to release the ship, unless it furnishes security. The observations in this order are of tentative nature and should not be taken as prejudicial.