S.J. Vazifdar, J.@mdashThe petitioner seeks a writ of certiorari to set aside a demand notice dated 19th April, 2012, issued by the respondent for a sum of Rs. 10 crores, subsequently reduced to Rs. 1,86,00,000/-. The claim was for reimbursement of expenses incurred by the respondent in assisting the petitioner and for damages allegedly suffered by the respondent on account of an explosion and a fire which took place on a vessel owned by petitioner No. 1. Petitioner No. 2 is the agent of petitioner No. 1. The petitioners were directed to pay 20% of the tentative claim forthwith and to furnish a bank guarantee for the balance 80%. The notice further stated that the said vessel would be allowed to sail only upon the petitioners complying with the above demand.
2. The respondent is undoubtedly entitled to raise a claim. The question that falls for our consideration is whether on account of a mere claim, the respondent is entitled to restrain the petitioners vessel from sailing thereby, in effect, arresting the vessel.
We have answered the question in the negative. There is no provision in the Major Port Trusts Act, 1963, that permits the respondent to call upon the officer of the Central Government to refuse to grant the port-clearance to any vessel at the port in respect of a claim for general damages i.e. damages that do not fall within the ambit of section 116 of the Act. The respondent''s claim for damages in this case does not fall within the ambit of section 116 of the Act.
3. By an order dated 27th April, 2012, a Division Bench of this Court to which one of us (S.J. Vazifdar, J.) was a party, permitted the petitioners vessel to sail upon their furnishing an unconditional bank guarantee for the entire amount of Rs. 1.86 lakhs demanded by the respondent. The rights of both the parties were thereby protected. Whether the bank guarantee ought to now stand discharged or not would depend upon the result in this petition. While we have dismissed the petition, we have protected the respondent by permitting it time to adopt proceedings in accordance with law and seek appropriate reliefs in respect of the bank guarantee in such proceedings.
4. In view of the question of law that arises, it is necessary to state the facts only briefly.
Petitioner No. 1 is the bare-boat charterer of the vessel M.T. ROYAL DIAMOND 7. Petitioner No. 2 is the agent of petitioner No. 1 as well as of the vessel. At the relevant time, the vessel carried consignments of hazardous chemicals for discharge at the Port of Mumbai and Kandla in India and at Jabel Ali (UAE). On 16th March, 2012, the vessel arrived at Mumbai. After the vessel had completed discharge, a part of the cargo and the hoses disconnected on 17th March, 2012, causing an explosion and the out-break of a fire in the forward section of the vessel. The crew commenced fire-fighting operations.. Foam was provided by shore firemen and the storeroom in which the fire occurred was filled with water and foam. The vessel left berth and was shifted to anchorage where the fire was completely extinguished within about ten hours. The petitioners contend that no loss or damage was caused to the respondent''s property.
5. On 24th March, 2012, when the crew members and the shore workers appointed by petitioner No. 2 were on board, there was another explosion resulting in death of the bosun and a crew member. The petitioners contend that the incidents were accidents and did not involve negligence on the part of the petitioners or their employees / agents. Investigations were carried out and an FIR was lodged.
6. On 10th December, 2012, the Department of Explosives, Government of India issued a gas free certificate, certifying that the relevant parts of the vessel were free of gas. The petitioners were, therefore, permitted to carry out temporary repairs. On 19th April, 2012, the Classification Society Surveyors issued a certificate, certifying that the vessel was fit to sail to the next ports of discharge. The concerned Police Station also issued an NOC permitting the vessel to sail out of Mumbai.
7. Accordingly, on 16th April, 2012, the petitioner approached the respondent for obtaining port clearance certificate allowing the vessel to sail. The petitioner No. 2 was informed that the port had a provisional claim of Rs. 16,00,000/-. However, the impugned notice dated 19th April, 2012, was issued by the Deputy Conservator of the respondent.
8. As we mentioned earlier, the question is whether the respondent has the authority to detain the vessel in Mumbai on account of its unadjudicated claim. The petitioners contend that no damage whatsoever was caused on account of the incidents to the respondents property. All the expenses incurred by the respondent to control the situation that arose on account of the fire and the explosions have been paid by the petitioners. The respondent, however, contends that it is entitled to damages in addition to the payment in respect of the services rendered by them to the petitioners on account of the said incidents. The respondent also contends that it suffered a revenue loss of Rs. 1.22 crores. Considering the view that we have taken it is not necessary to express any opinion on merits regarding the respondents claim for damages. We restrict this judgment to the question whether in view of the claim for damages the respondent is entitled to refuse to permit the petitioners vessel to sail.
9. Mr. Makhija, the learned counsel appearing on behalf of the respondent relied upon sections 64, 65, 113, 114 and 116 of the Major Port Trusts Act, which read as under:-
"64. Recovery of rates and charges by distraint of vessel.-(1) If the master of any vessel in respect of which any rates or penalties are payable under this Act, or under any regulations or orders made in pursuance thereof, refuses or neglects to pay the same or any thereof on demand, the Board may distrain or arrest such vessel and the tackle, apparel and furniture belonging thereto, or any part thereof, and detain the same until the amount so due to the Board, together with such further amount as may accrue for any period during which the vessel is under distraint or arrest, is paid.
(2) In case any part of the said rates or penalties, or of the cost of the distress or arrest, or of the keeping of the same, remains unpaid for the space of five days next after any such distress or arrest has been so made, the Board may cause the vessel or other thing so distrained or arrested to be sold, and, with the proceeds of such sale, shall satisfy such rates or penalties and costs, including the cost of sale remaining unpaid, rendering the surplus (if any) to the master of such vessel on demand.
65. Grant of port-clearance after payment of rates and realisation of damages, etc.-If a Board gives to the officer of the Central Government whose duty it is to grant the port-clearance to any vessel at the port, a notice stating,-
(i) that an amount specified therein is due in respect of rates, fines, penalties or expenses chargeable under this Act or under any regulations or orders made in pursuance thereof, against such vessel, or by the owner or master of such vessel in respect thereof, or against or in respect of any goods on board such vessel; or
(ii) that an amount specified therein is due in respect of any damage referred to in section 116 and such amount together with the cost of the proceedings for the recovery thereof before a Magistrate under that section has not been realised. such officer shall not grant such port-clearance until the amount so chargeable or due has paid or, as the case may be, the damage and costs have been realised.]
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116. Recovery of value of damage to property of Board.-If, through the negligence of any person having the guidance or command of any vessel, or of any of the mariners or persons employed on such vessel, any damage is caused to any dock, wharf, quay, mooring, stage, jetty, pier or other work in the possession of any Board, or any movable property belonging to any Board, the amount of such damage shall, on the application of the Board be recoverable, together with the cost of such recovery in accordance with the provisions of Part X-A of the Merchant Shipping Act, 1958 (44 of 1958)."
10. Mr. Makhija submitted that the respondent is entitled to distrain or arrest the vessel in view of the aforesaid provisions of the Major Port Trusts Act (hereinafter referred to as "the Act").
11. Section 64 permits the respondent to distrain or arrest, inter-alia, the vessel if the Master thereof refuses or neglects to pay "any rates or payments" payable under the Act, Regulation or orders made in pursuance thereof. A claim for damages does not fall within the ambit of the terms, rates or penalties. Mr. Makhija did not invite our attention to any provision of the Act or of any authority to the contrary. Section 64, therefore, is inapplicable to the Board''s claim for damages.
12. Section 65 entitles the Board to give the officer of the Central Government, whose duty it is to grant the port-clearance to any vessel at the port, a notice stating the amounts payable in respect of the claims specified therein and upon such notice, the officer is required not to grant port-clearance until the amount so chargeable or due has been paid or the same has been realised.
Section 65(i) refers to any rates, fines, penalties or expenses chargeable under the Act or under any Regulation or orders made in pursuance thereof. A claim for damages does not fall within the ambit of the terms "rates", "fines", and "penalties". Nor are they damages expenses chargeable under the Act or under any Regulations or orders made in pursuance thereof. Specific provisions have been made in the Act regarding rates, fines, penalties and other expenses chargeable under the Act. For instance, section 113 and 114 provide for fines for contravention of the provisions of sections 37, 38, 41 and 46 of the Act. None of these sections refer to a failure to pay damages. Mr. Makhija was unable to indicate any provision of the Act which includes damages within these terms. Section 65(i), therefore, is inapplicable in respect of the Board''s claim for damages.
13. Mr. Makhija''s main submission, however, was based on section 65(ii) of the Act. The reference is not well placed.
14. Section 65(ii) permits the Board to give the said notice in respect of amounts due in respect of any damage referred to in section 116. It is necessary, therefore, to see whether the Board''s claim for damages falls within section 116. Section 116 does not apply to damages in general. It specifies the nature of damages viz. damage caused to any "dock, wharf, quay, mooring, stage, jetty, pier or other work in the possession of any Board or any movable property belonging to any Board". It is not the respondent''s case that the incidents which took place caused any damage to any of the properties of the respondent specified in section 116. The claim for damages is on account of the alleged loss of business opportunities. Even a liberal construction of section 116 does not include within its ambit such a claim. Section 116 refers to damage to physical, tangible items viz. any "dock, wharf, quay, mooring, stage, jetty, pier". Even the words "other work in possession of any Board" refer to a tangible or physical item.
15. The impugned action, therefore, is not sustainable under the provisions of the Act. Nor is such an action sustainable under any other provision of law. Mr. Makhija, in any event, did not invite our attention to any provision of law that permits the Board to detain, inter-alia, a vessel for a claim for damages that does not fall within the ambit of the aforesaid provisions of the Act, including sections 65 and 116. The respondent is not without a remedy.
16. The respondent has, for instance, a remedy of a regular civil suit. Although it does not have a lien in respect of the vessel, it can always make an application for injunction or an order for attachment before judgment.
17. We had permitted the vessel to sail subject to the petitioner furnishing a guarantee to the extent of the entire claim of the respondent of Rs. 1.86 crores. It is only fair, therefore, to clarify that in the event of the respondent filing a suit and making an application for interim reliefs, it would be entitled to contend that the application ought to be heard on the basis that the vessel itself is in India. In other words, it will not be open to the petitioner to contend in such an application that the application is infructuous as the vessel has already sailed.
18. In the circumstances, the writ petition is disposed of to the extent that the impugned notice dated 19th April, 2012, prevents the vessel from sailing till the respondents demand of Rs. 1.86 crores is paid. The guarantee, however, shall be kept alive upto and including 31st October, 2014 to enable the respondent to adopt appropriate proceedings and to seek interim reliefs, including for the continuation of the guarantee. It is clarified that we have not expressed any views on the merits of the respondent''s claim for damages.
There shall, however, be no order as to costs.
