Kinship Services (P) Ltd. vs Fithaly Fernando

C.N. 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 S. 145 of the Merchant Shipping Act, 1958 (hereinafter referred to as

the Act for short) has been filed by the 1st 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 S. 245(2) of the Act. 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 S. 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 defeat the claim of the 1st respondent, he approached this Court by filing W.P.(C) under Art. 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 1st respondent''s claim for

wages. The learned Single Judge following the decision of the Supreme Court in M.V. Elisabeth and Others Vs. Harwan Investment and Trading

Pvt. Ltd., Hanoekar House, Swatontapeth, Vasco-De-Gama, Goa, , 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 W.P.(C) was declined. However, the

learned Single Judge by referring to S. 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.

We have heard learned counsel for the appellant and learned counsel for the first respondent and learned Standing Counsel appearing for the

remaining respondents.

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 S. 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 S. 145(1) of the Act was opposed by the Appellant. The Magistrate Court on application filed by the appellant

under S. 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 W.P.(C)s filed by the 1st respondent and other employees are pending hearing and disposal by this

Court. We do not wish to consider the dispute between the appellant and the 1st respondent with regard to the maintainability of application filed

under S. 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 W.P.(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 S. 145 can proceed to issue restraint orders under S. 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 S. 445(1) &

445(2) of the Act.

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 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.

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 S. 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-s.(2) of S. 445 to order distress and arrest of Ship and her equipment or to order

security to be furnished in lieu of it. While the appellant''s case is that even under sub-s.(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 first 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 S. 145

of the Act. The learned counsel for the 1st respondent has relied on the decision of the Supreme Court in Ashok Kumar Lingala Vs. State of

Karnataka and Others, , 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 1st respondent is that of the Bombay High Court in Marine Management Services (Private) Ltd. v. Anil Kumar

Jaiswal & Ors., wherein the power of the Magistrate Court under S. 145 has been expressed by the Court as below:-

It appears from the wording of S. 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 S. 145 of the Merchant Shipping Act.

The learned counsel for the appellant submitted that S. 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 S. 445 does not limit the power of the Magistrate for

recovery of arrears due from Foreign Ships. On the other hand, in our view, S. 445 has to be read along with the power of the Magistrate under

S. 145 which provides for summary proceeding before the Magistrate Court for settling wage claim of seamen of Shipping Companies. We have

to consider the scope of S. 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 S. 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.

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.