Kinship Services (P) Ltd. v. M.J. Fithaly Fernando and Others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM FRIDAY, THE 22ND DAY OF JUNE 2012/1ST ASHADHA 1934 WA.No. 2086 of 2010 -----------------------------------------AGAINST THE JUDGMENT IN WPC.10441/2010 DATED 10-06-2010 APPELLANT/4TH RESPONDENT: --------------------------KINSHIP SERVICES (P) LTD. PLOT NO.1 & 6,CAT IV,MARAR ROAD WILLINGDON ISLAND, COCHIN 682 003, REP.BY ITS DIRECTOR,PRABHAKAR KINI. BY ADVS.SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SRI.K.JOHN MATHAI SRI.P.BENNY THOMAS SRI.P.GOPINATH SMT.THUSHARA JAMES RESPONDENTS/PETITIONER & RESPONDENTS 1 TO 3 IN THE W: ------------------------------------------------------- 1. M.J.FITHALY FERNANDO AND OTHERS 1/331-3,KAVERI MAIN STREET,SRINAGAR IYER BUNGLOW, MADURAI 625 014. 2. THE PRINCIPAL OFFICER & SHIPPING MASTER, MERCANTILE MARINE DEPARTMENT,WILLINGDON ISLAND KOCHI-9. 3. THE SEAMEN'S WELFARE OFFICER, MERCANTILE MARINE DEPARTMENT,WILLINGDON ISLAND KOCHI-9. 4. THE DIRECTOR GENERAL OF SHIPPING, JAHAZ BHAVAN, WALCHANT-H MARG,MUMBAI-400 001. BY ADV. SMT.D.P.RENU,CGC, BY ADV. SRI.T.R.ASWAS THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 22-06-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ks C.R. ## C.N.RAMACHANDRAN NAIR & C.K.ABDUL REHIM, JJ. .................................................................... W.A.No.2086 of 2010 .................................................................... Dated this the 22[nd] day of June, 2012. ## J U D G M E N T ## Ramachandran Nair, J. The appellant is a shipping Company which has filed this Writ Appeal challenging the findings of the learned Single Judge that the Magistrate Court before which an application under Section 145 of the Merchant Shipping Act, 1958 (hereinafter referred to as the Act for short) has been filed by the 1[st] respondent, the Captain of the Ship, for arrears of wages, has jurisdiction to order arrest and detention of the ship and her equipments or to demand security for the claim amount in terms of Section 245(2) of the Act. 2. The facts leading to the controversy are the following: The first respondent, the Captain of the Appellant's Ship, and several other seamen filed applications under Section 145 of the Act before the Magistrate Court, Kochi for arrears of wages due from the Appellant-Shipping Company. However, apprehending disposal of the ship and her equipments to W.A.No.2086/2010 -2- defeat the claim of the 1[st] respondent, he approached this Court by filing WP(C) under Article 226 of the Constitution of India by invoking the admiralty jurisdiction of this Court for arrest and detention of the Appellant's Ship for securing 1[st] respondent’s claim for wages. The learned Single Judge following the decision of the Supreme Court in M.V.Elizabeth and others v. Harwan Investment and Trading Pvt. Ltd., - - Hanoekar House Swatontapeth Vasco de Gama, Goa, reported in 1993 Supp (2) SCC 433, held that admiralty jurisdiction of the High Court can be invoked only in respect of Foreign vessels and not against an Indian ship. Accordingly, the main relief sought for in the WP(C) was declined. However, the learned Single Judge by referring to Section 445(2) of the Act held that the Magistrate Court has power to order distress and sale of ship or her equipments thereon for recovery of wages payable to seamen or to demand security for the claim amount pending award by Court. It is against this judgment, the appellant has filed this Writ Appeal. 3. We have heard learned counsel for the appellant and learned counsel for the 1[st] respondent and learned Standing W.A.No.2086/2010 -3- Counsel appearing for the remaining respondents. 4. The appellant, admittedly, has no vessel or any movables within the jurisdiction of Magistrate Court, Kochi and therefore there is no likelihood of any adverse orders being passed against the appellant based on observation or direction of the learned Single Judge. However, appellant’s counsel submitted that the appeal is filed in principle to challenge the legal position laid down by the learned Single Judge declaring that the Magistrate Court has jurisdiction to arrest and detain and sell Indian ship under Section 445(2) of the Act. On facts it is admitted by the learned counsel for the appellant that maintainability of applications filed by the Captain and certain other employees of the appellant's Ship before the Magistrate Court, Kochi for wages under Section 145(1) of the Act was opposed by the Appellant. The Magistrate Court on application filed by the appellant under Section 8 of the Arbitration Act along with employment agreement referred the dispute between the employees of the ship and the appellant for settlement by arbitration against which the WP(C)s filed by the 1[st] respondent and other W.A.No.2086/2010 -4- employees are pending hearing and disposal by this Court. We do not wish to consider the dispute between the appellant and the 1[st] respondent with regard to the maintainability of application filed under Section 145 before the Magistrate Court and the validity of the reference for arbitration made by the Magistrate, which is the subject matter of the pending WP(C)s. However, the limited question to be considered is whether the learned single Judge was right in holding that the Magistrate before whom an application is filed under Section 145 can proceed to issue restraint orders under Section 445(2) of the Act for arrest and detention of the ship and her equipment. Since the question has to be considered with reference to the statutory provisions, we extract hereunder Section 445(1) & 445(2) of the Act. “445. Levy of wages, etc. by distress of movable property or ship.- (1) When an order under this Act for the payment of any wages or other sums of money is made by a court or Judicial Magistrate of the first class or Metropolitan Magistrate or other officer or authority, and the money is not paid at the time or in the manner directed, the sum mentioned in the order with such further sum as may be thereby awarded for costs, may be levied by distress and sale of the movable property of the person directed to pay the same W.A.No.2086/2010 -5- under a warrant to be issued for that purpose by such a Magistrate. (2) Where any court or Judicial Magistrate of the first class or Metropolitan Magistrate or other officer or authority has power under this Act, to make an order directing payment to be made of any seaman's wages, fines or other sums of money, then if the person so directed to pay the same is the master, owner or agent of a ship and the same is not paid at the time or in the manner directed by the order of the court or Judicial Magistrate of the first class or Metropolitan Magistrate or officer or authority may, in addition to any other power it or he may have for the purpose of compelling payment by warrant, direct the amount remaining unpaid to be levied by distress and sale of the ship and her equipment.” 5. There can be no controversy that after passing of an award determining wages payable or any other sum found payable by the Shipping Company, the Judicial Magistrate has the power under Section 445(1)to order distress and sale of movable property, which certainly includes the Ship belonging to the Company. The further question that arises is whether pending application for award of wages or any other amount payable by a Shipping Company, the Magistrate enjoys power under sub Section (2) of Section 445 to order distress and arrest of Ship and her equipment or to order security to be W.A.No.2086/2010 -6- furnished in lieu of it. While the appellant’s case is that even under sub Section (2) no coercive orders of arrest and detention of vessel is possible before award is passed determining liability on the Shipping Company, the case of the 1[st] respondent is that the Court is vested with power to issue interim orders only to protect the interest of the applicant who has filed the claim petition before the Magistrate Court under Section 145 of the Act. The learned counsel for the 1[st] respondent has relied on the decision of the Supreme Court in Ashok Kumar Lingala v. State of Karnataka and Ors, reported in AIR 2012 SC 53, wherein the Supreme Court held that the power to make an interim order, except where it is specifically taken away by the statute, is implicit in the Authority or Court, which has to make the final order or an authority exercising appellate or revisional jurisdiction against an order granting or refusing an interim order. The Court further held that the exercise of the power implies that the authority seized of the proceedings in which such an order is made will eventually pass a final order, the interim order serving only as a step in aid on such a final order. Another decision relied on by the 1[st] W.A.No.2086/2010 -7- respondent is that of the Bombay High Court in Marine Management Services (Private) Ltd. v. Anil Kumar Jaiswal and Others, wherein the power of the Magistrate Court under Section 145 has been expressed by the Court as below”- “5. It appears from the wording of Section 145 of the Merchant Shipping Act that the legislature wanted and intended to provide speedy remedy for seaman or apprentice for recovering his wages by a separate forum quickly and speedily and that Legislature did not want seaman or apprentice to file civil suit and wait for years together for result of the same. It is for this reason that the Metropolitan Magistrates are empowered over matters pertaining to recovery of wages by seaman or apprentice under Section 145 of the Merchant Shipping Act.” 6. The learned counsel for the appellant submitted that Section 445 applies to Foreign Ships only and not to the claim made against Indian Shipping Companies before the Magistrate Court. We are unable to accept this contention because Section 445 does not limit the power of the Magistrate for recovery of arrears due from Foreign Ships. On the other hand, in our view, Section 445 has to be read along with the power of the Magistrate under Section 145 which provides for summary proceeding before the Magistrate Court W.A.No.2086/2010 -8- for settling wage claim of seamen of Shipping Companies. We have to consider the scope of Section 445(2) with reference to the power of the Magistrate to award and recover the arrears by coercive steps against Shipping Companies. If the Magistrate is left with no power to pass interim orders to secure claim by arrest and detention and order release of Ship and other movables only on furnishing security by the Shipping Company, the authority for recovery by the Magistrate will be lost. In order to exercise the powers vested in the Magistrate Court as above, the Court passing the award before which an application for award of wages is pending and which has the authority to recover it, has the powers to issue such orders to ensure that assets are not removed or taken away beyond the jurisdiction of the Court pending award or before recovery. We therefore feel that the power under Section 445(2) can be exercised in the nature of interim orders to be issued to protect the interest of the claimant which could be by arrest and detention of ship until security is furnished to satisfy the award to be passed by the Court later in final adjudication proceedings. W.A.No.2086/2010 -9- We therefore, do not find any merit in the challenge against the judgment of the learned Single Judge and therefore the Writ Appeal is dismissed. (C.N.RAMACHANDRAN NAIR, JUDGE) (C.K.ABDUL REHIM, JUDGE) jg