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2018 (3) TMI 1637 - SUPREME COURTRecovery of amount through a Restraint Order - maritime claim against the charterer of a ship, who is not the de jure owner of the ship - ship is owned by a third party - whether a maritime claim could be maintained under the admiralty jurisdiction of the High Court for an action in rem against the Respondent ship in respect of the dues of the Appellants when the charterer himself is in default of the payment to the owner? - Section 1 of the Administration of Justice Act, 1956. Held that:- The various terms of the bareboat charter makes it quite clear that Reflect Geophysical had the status of a de facto owner. The charter agreement did contain a Clause for conversion of the status into a de jure owner but the occasion for the same never arose. The option to purchase was to be exercised by an advance intimation of six months prior to the end of the charter period and the purchase price was also specified as US$ 3,01,50,000. The charterer could not make any structural changes in the vessel or in the machinery, boilers, appurtenances or space parts thereof without first securing the owner's approval and the vessel had to be restored to its former condition before the termination of the charter, if so required by the owners. This was, thus, a deed between the owner of the Respondent and Reflect Geophysical - The contracts entered into with the Appellants by Reflect Geophysical are completely another set of charter hire agreements/contracts. The unpaid amounts under these contracts amount to claims against Reflect Geophysical. Thus, if there was another vessel owned by Reflect Geophysical, the Appellants would have been well within their rights to seek detention of that vessel as they have a maritime claim but not in respect of the Respondent vessel. The maritime claim is in respect of the vessels which are owned by the Appellants and the party liable in personam is Reflect Geophysical. Were the Respondent vessel put under the de jure ownership of Reflect Geophysical, the Appellants would have been within their rights to seek a detention order against that vessel for recovery of their claims. In the facts of the present case the owners of the Respondent vessel, in fact, also have a claim against Reflect Geophysical for unpaid charter amount. Thus, unfortunately it is both the owner of the Respondent vessel on the one hand and the Appellants on the other, who have a maritime claim against Reflect Geophysical, which has gone into liquidation. The Appellants quite conscious of the limitations of any endeavour to recover the amount from Reflect Geophysical, have ventured into this litigation to somehow recover the amount from, in effect, the owners of the Respondent vessel by detention of the Respondent vessel. Mere possession of the ship, however, complete and whatever be the extent of the control was not found good enough to confer the status of ownership. The "beneficial use" of a chartered ship would not ipso facto convert the status of a charterer into a "beneficial owner." The attention to the word "beneficial" in the Act of 1956 was, thus, attributed to the requirement to take into account the special English Institution of Trust which forms no part of domestic law of other signatories to the Convention - There is a clear distinction between a beneficial ownership of a ship and the charterer of a ship. Reflect Geophysical cannot be said to be the beneficial owner in the capacity of a demised charterer of the Respondent ship. Reflect Geophysical is not the owner of the Respondent ship and the owner cannot be made liable for a maritime claim, which is against the trawlers and Orion Laxmi. Appeal dismissed - The interim order dated 17.5.2013 stands dissolved and the amount along with accrued interest thereon is to be remitted back to the owners of the Respondent vessel, who deposited the same before the Bombay High Court in pursuance of the interim order.
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