1999 (9) TMI 993 - HC - Indian Laws

Summary

Issues Involved:
1. Jurisdiction and maintainability of the suit in rem.
2. Material misrepresentation or suppression of facts.
3. Allegations of fraud and bad faith.

Issue-wise Detailed Analysis:

1. Jurisdiction and Maintainability of the Suit in Rem:
The defendants argued that the suit in rem was without jurisdiction and not maintainable against the defendant vessel. They contended that the suit did not assert any personal cause of action against the owner of the vessel, N.B. Shipping Limited, but only a contractual nexus with Project Asia Line (PAL). It was submitted that an action in rem against the vessel would lie only if the owner is personally liable for the suit claim. The plaintiffs countered this by relying on the Supreme Court's judgment in M.V. Elisabeth and others v. Harwan Investment and Trading Pvt. Ltd, which established that the High Courts in India have plenary and unlimited jurisdiction unless expressly curtailed. The Court, after considering the submissions and the necessary averments in the plaint, held that the plaintiffs had made a prima facie case showing that the bunkers were supplied to the owners. Therefore, the suit could not be dismissed at this stage on the ground that it was not maintainable.

2. Material Misrepresentation or Suppression of Facts:
The defendants claimed that the plaintiffs had obtained the warrant of arrest by fraud, alleging that the plaintiffs had already received the consideration in another suit filed against PAL in New York. The plaintiffs argued that the action in rem is independent of the action in personam and that they were entitled to maintain both actions simultaneously in different jurisdictions. The Court observed that there was no material misstatement affecting the merits of the action in rem. The non-disclosure of the action in personam filed against PAL did not materially affect the merits of the action in rem. The Court held that the plaintiffs had not obtained any advantage by not disclosing the action in personam and that the suppression was not such that it would make the plaint liable to be rejected.

3. Allegations of Fraud and Bad Faith:
The defendants argued that the action in rem had been initiated in bad faith, as the plaintiffs were not aware that N.B. Shipping Limited were the owners of the vessel and had filed the suit only when they realized that no recoveries were forthcoming from PAL. The Court referred to the judgment in "THE NORDGLIMT" and found no ambiguity in the cause title of the plaint, holding that the matter would have to be permitted to go to trial. The Court concluded that the plaintiffs had made out a prima facie arguable case and that the arrest of the vessel was justified. Consequently, the Court dismissed the Notice of Motion with no order as to costs.

Conclusion:
The High Court of Bombay dismissed the Notice of Motion, holding that the suit in rem was maintainable and that there was no material misrepresentation or fraud that would warrant the dismissal of the suit. The Court emphasized that the plaintiffs had made a prima facie arguable case, and the matter should proceed to trial.