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TMI Blog1999 (9) TMI 998X X X X Extracts X X X X X X X X Extracts X X X X ..... with the entities/owners unconnected with the plaintiffs. 2. The plaintiffs have taken out Notice of Motion No. 1663 of 1999 for an order of injunction restraining the defendants from making any further publication or claims in the media with regard to the unseaworthiness of the vessel m.v. YA MAWLAYA or to the effect that plaintiffs being an alter ego of Merali family. On the other hand, defendants have taken out Notice of Motion No. 1638 of 1999 for striking out the plaint as being unnecessary, scandalous, frivolous and vexatious and also being an abuse of the process of Court under Order 6, Rule 16 read with section 151 of the Code of Civil Procedure and Article 215 of the Constitution of India. The defendants have also taken out Notice of Motion No. 1272 of 1999 for dismissal of the suit under Order 7, Rule 11-A of the C.P.C; as being without jurisdiction. It is prayed that the issue of jurisdiction be decided as a preliminary issue. 3. The first plaintiffs, SNP Shipping Services Pvt. Ltd., are a Private Limited Company registered under the Companies Act, 1956 having its registered office in Mumbai, hereinafter referred to as SNP . The second and third plaintiffs are Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany Holbud Ltd. is also a company registered in United kingdom. Thus it becomes apparent that SNP is the only company registered in India. All the other companies are foreign. None of them carry on business in India. 6. The present controversy arises out of a collision that took place in the early hours of 20/21st December, 1994 between the vessel m.v. Ya Mawlaya and the vessel m.t. New World . The collision took place in international waters, about 200 nautical miles off the coast of Portugal. At the time of the collision the vessel m.v. Ya Mawlaya was laden with cargo of soyabeans consigned to Cereol. The cargo had been loaded at New Orleans. As a result of the collision extensive damage was caused. Human lives were lost. Several proceedings came to be filed in the District Court of Louisiana, U.S.A., hereinafter referred to as the New Orleans Court , against the vessel m.v. Ya Mawlaya in remand against M/s. Kara Mara Shipping Co. Ltd., Holbud Ship Management Ltd., Holbud Ltd., Hydery (P) Ltd. in personam. Thereafter by an amendment and supplementary complaint, the second defendants impleaded the plaintiffs as well as Mr. Hasnain Merali, Mr. Shaukat Akbarali Merali and Ros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1996 seeking limitation of their liability and setting up of a Limitation Fund in respect of their liability arising from the collision of Ya Mawlaya with 'New World'. In both Admiralty Suits No. 26 of 1995 and 28 of 1996, this Court granted anti suit injunctions against WTCC restraining it from proceeding with its claims in the New Orleans Court. WTCC pleaded that this Court had no jurisdiction to entertain the Admiralty Suits No. 26 of 1995 and 28 of 1996. Both Single Bench and Division Bench held that this Court had the jurisdiction to entertain the suits. Against the aforesaid order, WTCC filed Special Leave Petition which was converted into Civil Appeal No. 8534 of 1997. WTCC had also filed C.A. No. 8535 of 1997 against the orders of this Court dated 20-8-97/21-8-97 in contempt proceedings. C.A. No. 8536 of 1997 was filed by WTCC against the order dated 21-11-1997 directing WTCC to deposit in this Court a sum of U.S.$ 12.3 million and interest accrued thereon to secure compliance by WTCC of orders passed by this Court. SLPs. (C) Nos. 3 and 4 of 1998 had been filed against orders dated 4-12-1997 in Admiralty Suit No. 26 of 1995 and Admiralty Suit No. 28 of 1996 posti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wned and controlled by the second and the third plaintiffs who are Indian shareholders, citizens of India and are in no manner whatsoever linked, owned or controlled legally or beneficially by the Merali family or any other entity as alleged by the first and the second defendants; (c) That this Hon'ble Court be pleased to declare by an order and declaration of this Honourable Court that the legal and beneficial ownership of the vessels managed by the first plaintiffs vests with the entities/owners unconnected with the plaintiffs save and except to the extent, as stated, of the plaintiffs management of the vessels . 9. The WTCC took out Motion for Summary Judgment in the New Orleans Court. By its judgment dated 3rd March, 1999 the New Orleans Court has recorded certain findings of fact and granted certain reliefs to defendants Nos. 1 and 2. Under the heading of LIABILITY it is held that the bridge equipment aboard the m.v. Ya Mawlaya although defective was not serviced or repaired during the vessel's port call in New Orleans. As a consequence the m.v. Ya Mawlaya departed from New Orleans with two defective radars, in that neither was functioning at all or ceased to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heelhouse of their vessel, with fires burning around them in the superstructure and in the water around the vessel, as the m.t. New World continued to turn in the wind and sea. M.T. New World transmitted distress called by radio, which were responded to by vessels m.t. Berge Stavanger, m.t. New Wisdom, m.t. Captadimitris and others but not by m.v. Ya Mawlaya. Despite the fact that Ya Mawlaya suffered much lighter damage than m.t. New World and no person on board m.v. Ya Mawlaya were injured or missing, the vessel made no effort to stop and aid the m.t. New World or to inquire into her need for assistance as required by applicable international maritime regulations. The judgment also takes notice of the fact that as a result of the collision, m.v. Ya Mawlaya became a constructive total loss. She was nonetheless taken in the shipyard at Malta where she was repaired. After repairs, this vessel was taken to the Port of Bombay, India in ballast solely to enable her arrest in an effort by her owners, operators, managers and others of the defendants to obtain jurisdiction in Indian Courts. In paragraph 98 of the judgment, some relevant portions of the judgment of the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... New Orleans Court of its proper jurisdiction by seeking injunctions against WTCC in suits brought in bad faith in Hong Kong and India. WTCC's Motion for Summary Judgment on liability has been granted. 10. In this suit the plaintiffs challenge the findings given by the New Orleans Court. It is stated that the New Orleans Court has wrongly held that all the defendants including SNP are jointly and severally liable to WTCC and Cereol. The joint and several liability has been determined by the New Orleans Court on the basis of the failure on the part of SNP to answer the requests in the nature of interrogatories. This has led the New Orleans Court; to conclude that SNP and others are alter egos of the Merali family. Adverse inferences have been wrongly drawn by the New Orleans Court solely on the basis of the failure on the part of SNP to respond to the interrogatories. It is stated that the adverse inferences wrongly drawn by the New Orleans Court on the basis of non- participation by SNP and non-response to the said interrogatories has resulted in grave injustice. It is stated that there was no material before the New Orleans Court to support its finding that SNP was the al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiffs when, to the knowledge of the defendants, the correct position was otherwise. It is stated that these reports are apparently published at the behest and motivation of the defendants. This is stated to be obvious by virtue of the fact that constant references are made to the Attorneys of the first defendants. It is stated that the publication in the newspapers smack of malicious motives. By an amendment in paragraph 21-A the plaintiffs have stated that the aforesaid articles have been published in well known and widely read shipping trade journals viz. Lloyds List and Trade Winds. These publications have a large international subscription and are read widely by persons in India who carry on business in the shipping industry. These articles have also featured on the internet thus making them freely available to an even wider readership. It is stated that due to the baseless allegations and malicious falsehoods supplied by the defendants through the aforesaid publications, grave harm and injury has been caused to the plaintiffs reputation and business. The plaintiffs goodwill in the shipping business has been dealt great harm. The allegations which have been formented by the def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not grant the relief of declaration, as it would serve no useful purpose. Declaration made under section 34 of the Specific Relief Act is only binding inter parties. Therefore, the Indian Authorities would not be bound by such a declaration. With regard to the relief of damages for defamation, learned Counsel Mr. Manohar has very fairly stated that this Court will have the jurisdiction to entertain the suit as according to the amended plaint wrong has been done within the territorial jurisdiction of this Court. He, however, submits that a look at the plaint together with the documents on the basis of which claim of defamation is made, would make it clear that the plaint is liable to be rejected as not disclosing a cause of action. Learned Counsel submitted that a bare perusal of the newspaper reports shows that they are fair, accurate and contemporaneous reports of the findings returned by the New Orleans Court. Thus the reports are covered by the doctrine of absolute privilege. There is an absolute defence to the case set up in the plaint with regard to libel. The plaint is, therefore, also liable to be rejected on the ground of being unnecessary, scandalous, frivolous and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue of jurisdiction will have to be decided keeping in view the impact of the findings of alter ego given by the New Orleans Court. With regard to the relief of damages, he submits that this Court clearly has the jurisdiction to entertain and decide the suit. The plaint cannot be rejected on the ground that the defence of privilege is a complete answer to the claims in the plaint. At this stage it cannot be said that the plaint is frivolous or vexatious. He further submitted that the plea of privilege would be available to the defendants as a defence. Mere raising of this plea at this stage would not render the plaint an abuse of the process of the Court. Both the learned Counsel have referred to a large number of authorities which would be adverted to a little later. 14. I have anxiously considered the arguments put forward by the learned Counsel. I find much substance in the submission of Mr. Manohar that the issue of jurisdiction with regard to the declaration part of the suit has been conclusively decided by this Court and the Supreme Court in the WTCC case. A perusal of the facts narrated in the earlier part of the judgment would make it abundantly clear that this Court a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent limitation action. But the present suit is without jurisdiction. 36. SNP has claimed that the Bombay High Court has jurisdiction because a part of the cause of action has arisen within its jurisdiction. SNP under its management agreement with Kara Mara claims to have recruited the crew of the vessel YA Mawlaya in Bombay. Since the owner is required to establish no fault or privity, on his part in respect of the occurrence , one of the relevant factors for this purpose is recruitment by the owner of a competent crew. Since recruitment was in Bombay, SNP claims that a part of the cause of action has arisen in Bombay. Therefore, SNP contends that the Bombay High Court has jurisdiction. However, in view of what we have held above, this does not confer jurisdiction on the High Court in an admiralty action of the present type. 37. In the present case the collision which gave rise to the owner's liability has occurred on the high seas off the coast of Portugal. Neither of the vessels involved in the collision is an Indian vessels. The owners of both these vessels arc also foreigners. The charterers and sub-managers are also foreign Companies. Only one out of several man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g personally against his claimants who arc seeking damages in respect of the loss or injury caused by the owner's vessel. Therefore, the presence of a foreign vessel in the territorial waters will not give the Court jurisdiction to entertain a limitation action by its owner unless the presence of the foreign vessel has given rise to an admiralty action by a claimant in that Court, which claim is subject to limitation or the presence of the vessel has created a likelihood of such action being taken there, or the Court is a domiciliary Court of the owner attracting such claims there. That is not the case here. In fact, at the time when Kara Mara filed the suit all claims were already filed against it in the foreign Court at New Orleans. U.S.A. No doubt Kara Mara had challenged the jurisdiction of that Court and had succeeded in the first round. But that was by no means a final adjudication. Nor can one legitimately conclude from this the likelihood of claims being filed in Bombay. In the present case, the Bombay High Court is not the domiciliary Court of Kara Mara or its vessel. Nor is any claim for liability which can be limited, filed against Kara Mara in the Bombay High Court. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged in forum shopping . The observations in paragraph 35 relied upon by Mr. Sundaram clearly state that SNP and Kara Mara would be at liberty to defend any action filed by the defendants for enforcement of their rights. At that stage they may set up a limitation action or file a fresh action. The Supreme Court contemplated defensive action by SNP and Kara Mara and not fresh prosecution on some concocted cause of action. There is no scope for any confusion as to the meaning of the observations of the Supreme Court. To accept Mr. Sundaram's interpretation of the observations of the Supreme Court in paragraph 35, would amount to rewriting the same beyond recognition. The interpretation suggested by Mr. Sundaram is a complete distortion of the observations made by the Supreme Court. 1, therefore, hold that the declaration part of the suit has to be rejected on the short ground that this Court has no territorial jurisdiction to entertain and try the suit. 15. At this stage it would be appropriate to consider the question : Whether the plaint (with regard to the declaration) is barred under any provision of the law? The plaintiffs on their own showing are not pursuing the relief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Court may at its discretion grant liberty to the plaintiffs to pursue the relief of declaration in the present suit. The plaintiffs would have to satisfy the Court that there are sufficient grounds for allowing the plaintiffs to continue with the relief of declaration in the present suit. But that application could have been made in the earlier suit and not in the present suit. This permission cannot be indirectly granted in this suit by accepting the statement of the learned Counsel for the plaintiff that they have elected to press for the relief of declaration in this suit rather than in the present suit. Accepting this proposition would render the provisions of Order 2, Rules 1 and 2 read with Order 23, Rules 1 and 3 nugatory. It was incumbent on the plaintiffs to seek leave of the Court in Suit No. 58 of 1998 for liberty to claim the same relief in the present suit. The requisite permission not having been obtained by the plaintiffs in Suit No. 58 of 1998, the present relief of declaration is clearly barred under Order 2, Rule 2. Thus the plaint has to be rejected under Order 7, Rule 11(d). 16. There is yet another reason why the plaintiffs cannot be permitted to con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any event, cause of action for seeking such a declaration can, conceivably, only arise on the WTCC filing a suit in this Court to enforce the judgment of the New Orleans Court. The plaintiffs are aware of this legal position as they have reserved their right to challenge the decree as and when the defendants seek its implementation/execution/recovery . Additionally, therefore the plaint has to be rejected as disclosing no cause of action, under Order 7, Rule 11 (a). 17. However, part of the cause of action with regard to libel has clearly arisen within the jurisdiction of this Court. Inspite of this Court having jurisdiction, in my view, the plaint has to be rejected on the ground that it does not disclose a cause of action and it is an abuse of process of Court. In order to appreciate the rival submissions of learned Counsel on this point it would be necessary to reproduce the relevant provisions of the C.P.C. Order VI, Rule 16. Striking out pleadings :--- The Court may at any stage of the proceedings order to be struck out or amended any matter in any pleading--- (a) which may be unnecessary, scandalous, frivolous or vexatious, or (b)..... (c) which is otherwi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the defendant to pursue the enforcement of the judgment in various parts of the world have also been mentioned. It would, therefore, appear that the statements made in the publications are privileged. The law with regard to privilege has also been settled, Mr. Manohar had referred to commentaries viz. (i) Salmond Heuston on the Law of Torts (20th Edn.) page 165, (ii) Winfield Jolowicz on Tort (12th Edn.) and (iii) Gatley on Libel and Slander. AH these commentaries make it clear that there are certain occasions on which public policy and convenience require that a man should be free from responsibility for the publication of defamatory words. The courts are unwilling to extend the number of these occasions on which no action will lie even though the defendant published the words with full knowledge of their falsity and with the express intention of injuring the plaintiff. At the same time it is well settled that absolute privilege attaches to fair and accurate reports in a newspaper of proceedings publicly heard before a Court exercising judicial authority. Applying the aforesaid test, it would have to be held that the publications complained of in the plaint are privileged. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he action, or anything in any pleading or in the indorsement, on the ground that --- (a) it discloses no reasonable cause of action or defence, as the case may be; or (b) it is scandalous, frivolous or vexatious; or (c) it may prejudice, embarrass or delay the fair trial of the action; or (d) it is otherwise an abuse of the process of the Court; and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be. (2) No evidence shall be admissible on an application under paragraph (1)(a)... A perusal of the aforesaid provision would show that, literally speaking, the power is a little wider in England. But judicial interpretation has virtually equated the term no reasonable cause of action occurring in RSC Order 18, Rule 19 to the phrase no cause of action occurring in Order VII, Rule 11(a) of the C.P.C. The Indian as well as the English Courts are very reluctant to reject the plaint at the threshold. Analysing the aforesaid provision in the case of Drummond-Jackson v. British Medical Association and others, 1970(1) All E.R. 1094 Lord Pearson observes : Over a long period of years it has been firmly established ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he suit, would have to be dismissed as the statements would be privileged. There can be but one result. The dismissal of the suit. Applying the aforesaid principles to the facts and circumstances of this case, I am of the considered opinion that the plaint does not disclose a cause of action and has to be struck out under Order 7, Rule 11(a). 18. Furthermore, it is a settled proposition of law that it is an abuse of process to raise in subsequent proceedings matters which could and should have been litigated in earlier proceedings. I am clearly of the opinion that the plaintiffs have mixed up the prayer for declaration with the prayer for damages in order to avoid the findings of this High Court and the Supreme Court in WTCC case to the effect that this Court has no jurisdiction to entertain the suit. Since the plaintiffs are claiming that the damage of the libel has occurred within the territorial jurisdiction of this Court, the plaintiffs would be entitled to file the suit with regard to damages. But this relief has been deliberately combined with the declaration which is already claimed in Admiralty Suit No. 58 of 1998. The plaintiffs are not even serious about the relief of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by this Court in Admiralty Suit Nos. 26 of 1995 and 28 of 1996 had been vacated pursuant to the judgment of the Supreme Court. Admiralty Suit Nos. 4, 17 and 18 of 1996 have also been dismissed by this Court by judgment dated 7th December, 1998 on the ground that this Court has no jurisdiction to entertain the suits. These suits have been decided after taking evidence on the preliminary issue of jurisdiction. Inspite of the categoric findings returned by the Supreme Court and this Court to the effect that this Court has no jurisdiction to entertain the suit, the plaintiffs filed Admiralty Suit No. 58 of 1998. This was done only to drag the defendants into further litigation by seeking an utterly futile declaration. Again the present suit has been filed ostensibly for the reason that the judgment has been pronounced by the New Orleans Court on 5th March, 1999. The cause of action with regard to the declaration had arisen to the plaintiffs even prior to the filing of Admiralty Suit No. 58 of 1998. In my view, the observations made by the New Orleans Court in the Summary judgment does not change the fact situation with regard to the cause of action. The defendants were all along clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... groundless. In any view, that suit has no survival value and should be disposed of forthwith after giving an immediate hearing to the parties concerned. 7. We regret the infliction of the ordeal upon the learned Judge of the High Court by a callous party. We more than regret the circumstance that the party concerned has been able to prevail upon one lawyer or the Other to present to the Court a case which was disingenuous or worse. It may be a valuable contribution to the cause of justice if Counsel screen wholly fraudulent and frivolous litigation refusing to be beguiled by dubious clients. And remembering that an advocate is an officer of justice he owes it to society not to collaborate in shady actions. The Bar Council of India, we hope will activate this obligation. We are con strained to make these observations and hope that the co-operation of the Bar will be readily forthcoming to the Bench for spending judicial time on worthwhile disputes and avoiding the distraction of sham litigation such as the one we are disposing of. Another moral of this unrighteous chain litigation is the gullible grant of ex parte orders tempts gamblers in litigation into easy courts. A Judge wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Article 215 of the Constitution of India. Paragraph 19 of the judgment in Bomi Munchershaw [supra] makes this proposition absolutely clear wherein it is held as under : 19. The above narration indicates that though the words abuse of the process of the Court occurred for the first time on 1-2-1977 in Order 6, Rule 16 of the Code of Civil Procedure, this power was immament in and arose from a High Court being a Court of Record under the Letters Patent as well as Article 215 of the Constitution. Thus, it is apparent that Order 6, Rule 16 is not the sole repository for the power of the High Court to reject the plaint for abuse of the process of Court. In my view, the plaintiffs have not come to Court with clean hands. For the aforesaid reasons the plaint has to be rejected. When abuse of process is clearly established before the Court, it is not sufficient merely to dismiss the action. It is the bounden duty of the Court to express its disapproval of the course adopted by the parties. At long ago as 1917 the Divisional Court and the Court of Appeal of England laid down solitary principles to be followed by the litigants while seeking equitable relief from the Court. These p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is no doubt extremely convenient that no second application for a high prerogative writ should be allowed after a first application has been refused. Such a writ is an extraordinary remedy, and persons seeking it may very reasonably be required not to apply for it unless they have sufficient cause for doing so. They must come prepared with full and sufficient materials to support their application, and if those materials are incomplete 1 think it is quite right that they should not be allowed to come again . It may be that the result of our decision is that the applicant loses her remedy. If so, she has only herself and her legal advisors to thank for it. In my view the facts which have emerged in this case clearly fall within the ratio expressed by Viscount Reading, C.J., and Warrington, L.J. The observations made by Krishna Iyer, J., in the case of T. Arivandandam (supra) also make it abundantly clear that if clear drafting has created the illusion of a cause of action then the same should be nipped in the bud at the first hearing. The Court has to remind itself of section 35-A C.P.C. and take deterrent action if it is satisfied that the litigation was inspired by vexatiou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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