NAZIM , HUSSAIN SIDDIQUI, J. - The petitioner-company, Yukong Ltd., seeks leave to appeal, under Article 185(3) of the Constitution of-Islamic Republic of Pakistan, 1973, against the judgment dated 29.4.1999 of a learned Division Bench, High Court of Sindh, whereby its Admiralty Appeal No. 1 of 1997, preferred against the order dated 19.5.1997 of learned Single Judge in Admiralty Suit No. 123 of 1996 tiled by the respondent No. 3 CTT Group/Capital Equipment Financing Inc. Was dismissed.
2. The petitioner carries on business of supplying marine bunkers to ships calling, amongst others, at the ports of Singapore and Fugaira. It is claimed that Adriatic Tankers -Shipping Co. S.A. Of Piraeus, Greece (Adriatic) are the owners of a fleet of 83 vessels, including of respondent No. 1 M.T.
Eastern Navigator. It is also alleged that the petitioner at the request of the Adriatic supplied various quantities of marine bunker fuel at the ports of Singapore and Fujaira to said vessel to the tune of US $ 1,269,686.53. According to the petitioner, the Adriatic made default and failed to pay any of the instalments promised by them and admitted entire amount outstanding against them as per letter dated 21.8.1995. The petitioner, therefore, on 5.10.1995, tiled Admiralty Suit No. 686 of 1995 "Yukong's Suit" and the vessel (respondent-1) was arrested. It is pertinent to point out that subsequently said vessel was also arrested in Suits Nos. 678 of 1995, 682 of 1995, 699 of 1995 and 679 of 1995.
3. The respondent No. 3, CTT Group/Capital Equipment Financing Inc., applied in the Yukong's suit to be joined as party (C.M.A. No. 2848 of 1995) and also filed an application under Order VII, Rule 11.
CPC (C.M.A. 2847/95). By order dated 14.4.1996, the application of-the respondent No, 3 for joining them as a party was allowed and they were joined as the defendant No. 3 in said suit, it is alleged that the application under Order VII, Rule 11, CPC was dismissed as not pressed on 14.4.1996.
4. It is the case of the petitioner that the respondent No. 3 subsequently made an application under Order XIV, Rule 2, CPC (C.M.A. 627/96) for framing the issue to the effect that whether the suit in question was maintainable in admiralty jurisdiction and said application was dismissed on 13.5.1996 against which, the respondent No. 3 had filed Admiralty Appeal, which is still said to be pending and in which proceedings in Yukong's suit were stayed.
5. The petitioner -bn 6.2.1996 applied for sale of the vessel. On 15.2.1996, the respondent No. 3 filed Admiralty Suit No. 123/96 and prayed for the following reliefs:- "(i) a declaration that the mortgage is valid binding and subsisting;
(ii) judgment and decree in favour of the plaintiffs in the sum of US $ 17,971,691.99 as due and payable by the defendants jointly and severally to the/plaintiff under the mortgage as. At 18'
October, 1995 alternatively damages;
(iii) such further sums as may have become due and in the future become due and payable as of or said agreement in respect of continuing interest in accordance with paragraphs noted above and other costs and charges between 18th October., 1995 and the date of judgment and actual payment (whichever shall be the later);
(iv) interest;
(v) cost of the suit;
(vi) grant any other relief/s as the Court may deem tit and proper; w(vii) order auction.
6. The respondent No. 3 also applied tor arrest of the vessels under Rule 731 of Sindh Chief Court Rules (O.S.) through C.M.A. No. 244 of 1996 and also applied for its sale through separate application (C.M.A. 245 of 1996). The petitioner intervened in said 'suit, which, according to the petitioner, is a mortgaged suit and not admiralty suit and raised the question of jurisdiction. In the affidavit, the petitioner contended that since no relief was sought against vessel, there was no action in rem and Admiralty Suit No. 123/96 was liable to be transferred to the original side of the High Court and tried as an ordinary money suit based on mortgage against the respondent No. 2.
7: The petitioner claimed that in order to meet objection of jurisdiction raised by it, the respondent No. 3 on 5.3.1996, applied for amendment of the plaint so as to add a prayer for arrest of the vessel, but failed to obtain any such-order till 28.10.1996. On the last-mentioned date, application-of the respondent No. 3 for amendment was dismissed by learned Admiralty Judge, but in appeal, bearing No. 3 of 1996, the amendment was allowed by a learned D.B. Of the High Court.
8. On 13.3.1996, the respondent No. 1 vessel was sold for US $ 25 million and sale proceeds were invested in interest bearing foreign currency account with American Express out of which numerous wages were paid and other claims were satisfied.
9. On 30.6.1996, the respondent No. 2,. United Marine Service S.A., filed the written statement in Suit No. 123/96 and admitted the entire mortgage debt in the sum of US $ 17 million, owed to the respondent No. 3.
10. On 24.7.1996, the petitioner tiled an application under Order XII, Rule 6, CPC (C.M.A. 945/96) together with written statement as Intervenor and raised the following 3 preliminary issues in Suit No. 123/96:- "(i) Was the above suit properly instituted in the Admiralty Jurisdiction of the Hon'ble High Court and whether the suit as framed is maintainable?
(ii) Whether the Admiralty Jurisdiction of the Hon'ble High Court was at any stage attracted and or invoked by the plaintiffs and if not what is the consequence? '
(iii) Could the parties i.e. The plaintiffs and the defendant No. 2 by consent confer jurisdiction on the Hon'ble High Court so as to obtain a decree on the alleged admission?"
11. Above issues were heard and disposed of by learned Single Judge on 19.5.1997. These issues were decided in favour of the respondent No. 3. Regarding Issue No. 3, learned Single Judge observed that consent of the parties could not legitimately confer jurisdiction on a Court, which is not otherwise conferred upon it.
12. Above order of learned Single Judge was impugned before a learned D.B. Of the High Court comprising Kamal Mansur Alam, C.J. And Amanullah Abbasi, J. (as they then were). The appeal preferred by the petitioner was dismissed and order of the learned Single Judge was maintained by the judgment which has been impugned in this petition.
13. Learned High Court held that in a suit in rem the prayer of arrest of the ship may not be made in the body of-the plaint itself and that such arrest could be prayed in a separate application. It was also observed that order for arrest of the ship is merely by way of interim order as is clear from Rule 731 of Sindh Chief Court Rules, which reads as under: - "731. When a suit is instituted in rem, any party may, on filing an affidavit, obtain from the Court a warrant for the arrest of the property proceeded against.
14. Dealing with the Above point, learned D.B. Observed as follows:- "In the present case admittedly the relief for the auction of the respondent No. 1 ship has been sought in the plaint of Suit No. 123 of 1996; instituted by the third respondent and albeit no specific relief for the arrest of the vessel is sought in the plaint, an application under Rule 731 for such arrest was moved alongwith the plaint which was, however, ultimately rendered infructuous as by the time it came up for hearing after notice the ship had already- been sold on Court's order passed on the application filed in that suit, as also in Suit No. 686 of 1995 instituted by the appellant and several other suits, nevertheless, the respondent vessel was already under- arrest in the latter suits at the time the former was instituted. As such it would be seen that for the non-issuance of the warrant of arrest of the ship in the suit, the third respondent cannot be blamed and in the circumstances the absence of such arrest would really not be alleged mortgage of the ship."
15. In order to appreciate the pleas raised in this petition, it would be advantageous to refer to the following provisions of Admiralty Jurisdiction Ordinance, 1980, i.e. (c) of sub-section (2) of Section 3,
(c) of sub-section (5) of Section 3 and sub-section (2) of Section 4:- "(2)(c) any claim in respect of a mortgage of or charge on a ship or any share therein.
(5) (c) so far as they relate to mortgages and charges, to all mortgages or charges, whether registered or not and whether legal or equitable, including mortgages and charges created under foreign law.
4(2) The Admiralty Jurisdiction of the High Court may in the cases mentioned in clauses (a) to (d),
(i) and (r) of sub-section (2) of Section 3 be invoked by an action in rent against the ship or property in question."
16. It is contended on behalf of the petitioner that jurisdiction in rem against the respondent No. 1 vessel was never invoked by the respondent No. 3 and that the respondent No. 3 had failed to obtain any order of arrest of the vessel and indeed no such attempt was made by the respondent No. 3, during the period from 15.2.1996 to 9.5.1995, when the ship was available at Port Qasim, Karachi. Learned counsel further submitted that finding of the High Court that Admiralty Ordinance and Rules do not require specifically that the ships should be arrested in all proceedings in rem, was incorrect. He also argued that only .Exception for this purpose is that when the owner files caveat for preventing the arrest or has otherwise volunteered to furnish bail in the suit amount.
According to learned counsel, the High Court has failed to appreciate the dictum laid down in the case reported as Messrs Ahmed Investment Ltd.,, Karachi v. M.V. 'Sunrise IV and another (PLD 1980 Kar. 229), Bangladesh Shipping Corporation v, M. V. 'Nedou' and another (PLD 1981 Kar, 246). A plea has also been raised that since the respondent No. 3 failed to institute proper proceedings in rem and to invoke the Court's jurisdiction by arresting the ship pursuant to said proceedings, said respondent lost its priority as mortgage over the petitioner/ claim for necessaries which, according to learned counsel, has acquired higher priority over the claim in an ordinary-suit for recovery of mortgage debt.
17. Action in rem primarily is against the property which eventually may be arrested and sold out to satisfy the claim. Such action is restored 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 proceeding 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.
19. In British Shipping Laws, Volume 14 Maritime Liens by D.R. Thomas at page 65 under heading "Arrest Unnecessary to Found Jurisdiction", the following has been observed "Although the arrest of a respondent probably represented the . Ancient method of acquiring a jurisdiction in rem this would appear to be the case no longer under the contemporary law.
Provided a writ in rem has been properly served this is itself sufficient notwithstanding that the warrant of arrest remains unexecuted. In the Nautik, Bruce J. Viewed the modern writ in rem as serving the same function as the old warrant of arrest under the former practice of the High Court of Admiralty."
20. It is an admitted fact that when the respondent No. 3 had filed Suit No. 123 of 1996, the respondent No. 1 ship was available at Port Qasim, Karachi, and, for that reason, the respondent No, 3 had applied tor its arrest and sale. Under the circumstances, C.M.A., No. 245 of 1996 of the respondent No. 3 was allowed with an observation that Official Assignee had already been, appointed to take steps for the sale of the ship. C. M.A. No. 244 of 1996 came up for hearing before learned Single Judge on 25.9.1996 when learned counsel for the respondent stated that in view of the fact that ship had already been auctioned, said application was not pressed.
21. Thus, it would be seen that the respondent No. 3 had taken all possible steps, which could be taken, for its arrest and auction. Simply because C.M.A. No. 244 of 1996 came late for hearing before learned Single Judge, it could not be said that said respondent had not applied for arrest of the ship nor this fact could any way adversely affect the interest of said respondent as, the ship was already sold. The fact remains that said respondent had applied for its arrest when it was available. On such technical ground suit of the respondent No. 3 could not be thrown away.
Besides, the auction of the ship included its arrest also.
22. The main point agitated by the petitioner is that subject Suit No. 123 of 1996 is not an Admiralty Suit due to non-mention of word 'arrest' in the plaint for the exercise of Admiralty Jurisdiction by the High Court under Admiralty Ordinance No. XLII of 1980. It is noted that arrest is only obtained for security purposes. When security is furnished, the vessel is released. Learned Single Judge has held that subject Suit as framed was properly instituted and was maintainable under Admiralty Jurisdiction. Then? Is no legal requirement either in the English law or in Pakistani law to make prayer for arrest of the ship in the body of the plaint. In this particular case, the arrest of the ship was sought, as provided through an application under Sindh Chief Court Rules. The Court, in fact, had ordered notice and summon to be served on the master of the vessel. In C.M.A. No. 244 of 1996 the summons were duly served upon him. Since the prayer of auction of the vessel was granted, no adverse inference could be drawn against the respondent No. 3. It is noted that the vessel was arrested in pursuance to order of the High Court, dated 5.10.1995. Such order was first passed in one of the Suits No. 678 of 1995 and then Yukong's Suit (No. 686 of 1995) and thereafter, in other 5 suits mentioned earlier. It being so, arrest sixth time was not necessary at all nor was required for the purposes of obtaining security. As appears from the circumstances, the manager/operator of the vessel, namely, Adriatic Company had abandoned it and the suits were not defended. Besides, the bill of sale was made in Suit No. 123 of 1996 and not in Suit No. 686 of 1995.
23 Mr. Qamar Abbas, learned counsel for the respondent, referred to para 66, Volume 14 of British Shipping Laws (1980) which reads as under:- "actual arrest of a res has ceased to be in the majority of instances, the distinctive feature of an action in rem."
24. He-also referred to para 232, Volume 1, of British Shipping Laws (1964) which reads as under:- "arrest however, is not necessary in all cases. Indeed, in the majority of actions in rem no arrest occurs."
25. Learned counsel also referred to an English case (4988) Lloyds Law Reports Volume 2, 454 (455)
"The Deichland", which reads as follows:- "...... Service of a writ on the vessel was all that was necessary to give the Court jurisdiction over that vessel. A judgment, in rem against the vessel could thereafter be entered, whether or not the vessel was arrested...."
26. In another English case cited by him (1989) Volume 1 Lloyds Law Report 388 (392) "Freda Del Nord", in the following was laid down:- "...... The Court was seized of an action in rem from the moment, whichever was earlier, of service of the writ "or" arrest of a ship.
It was further stated that "an action in rem may be commenced when the ship against which proceedings are to be brought is already under arrest and in the custody of the Admiralty Marshall "
27. He also referred to famous case of "Monica S" reported as (1967 Vol. 2 Lloyds Law Reports 113), wherein the following was held:- "arrest was not necessary to found jurisdiction in an action in rem, service of the writ on the res being sufficient."
28. On the point of second arrest, he referred to an English case of Freda Del Nord (1989) Vol. 1 Lloyds Law Reports 388 (at page 392) which lays down the principle that "second arrest is unnecessary".
In the earlier case (1980 of in re: ARO Co. Ltd 1980) Ch. 196, the Court of appeal had held that "recurrent arrests should be avoided".
29. The Admiralty Jurisdiction of the High Court is to hear and determine the causes, questions or claim enumerated in clauses (a) to (4) of sub-section (2) of Section 3 of the Ordinance. It includes any claim in respect of a mortgager or a charge on ship or any share therein. The suit, therefore, is covered by clause (c) sub-section (2) of Section 3 and subsection (2) of Section 4 of the Ordinance. The mortgage is the base of subject suit and word mortgage has repeatedly been used in the plaint of the suit i.e. In its heading and also in paras 2, 8, 11, 16, 19 and 20 and in the prayer clauses Nos. 1 and 2. Title body of the suit states "Admiralty Jurisdiction". The title of-the suit also states "Admiralty Jurisdiction". The title of the suit also states that these are proceedings in rem against the ship 'M.T. Eastern Navigator'. In prayer clauses, there is a prayer for auction and auction took place on the request of the respondent No. 3/plaintiff. Accordingly, we hold that Suit No. 123 of 1996 falls within the Admiralty Jurisdiction of the High Court and the respondent No. 3 holds priority over the claim of the petitioner.
30. It is also pertinent to note that the High Court had exercised Admiralty Jurisdiction in this matter since the date the suit was filed. Charges for advertisement for auction sale were paid by the respondent No. 3 and all actions by Official Assignee in connection with the auction sale of the ship and settlement of claims have taken place in Suit No. 423 of 1996 alone and not in Suit No. 686 of 1995 or any other suit.
31. Regarding objection of the petitioner about the respondent United Marine Service S.A. Cited as defendant No. 2, it is noted that they being owner were cited as the defendant and this fact alone does not take the suit from the ambit of Admiralty Jurisdiction'. In the case reported as The Republic of India v; India Steamship Co. (1997) Weekly Law Reports 818 (827), it was held that the owners are the real party in a suit in rem, therefore, no objection can be taken for citing said corporation as defendant No. 2. The objection of the petitioner is not sustainable in law.
32. Adverting to the contention of the-petitioner that the High Court failed to appreciate the dictum laid down in the cases of Messrs Ahmed Investment Ltd. And Bangladesh Shipping Corporation, referred to earlier, it is noted that in case of Messrs Ahmed Investment Ltd. It was held that a suit filed in rem under Admiralty Jurisdiction will not fail merely on account of joinder of the owner of the vessel as party to the same. In case of Bangladesh Shipping Corporation the view taken on the basis of The Banco's case (1971) 1 AER 524 was that action in rem lies against a ship without making it defendant. The real defendants are described^ owner of or persons interested in ship and the writ of arrest may be effected by serving it on ship. It was held that if no appearance is entered by the owner the action remains as an action in rem operating only against the ship and if 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. Further, it was observed that in consequence oft the service if the owner or any person interested in the res, 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.
33. We have examined above-referred cases and are of the view that learned Single Judge, who has referred these to cases in his judgment, has taken them in their true perspective and neither enlarged nor harrowed the scope of the dictum laid down therein. On the contrary, these to cases only speak about the legal position with reference to those cases in respect of Admiralty Jurisdiction. This ground is also devoid of any force.
34. In consequence, leave to appeal is refused and the petition is dismissed.