LAW FOR ALL

Corporate laws - admiralty suit = what is a maritime claim and what is a maritime lien- All cases of maritime lien are based on maritime claims but all maritime claims do not give rise to a maritime lien on the ship. Normally a lien in the general law is a rather limited right over some one else’s property. It is a right to retain possession of that property usually to receive a claim. But a maritime lien differs from other liens in one very important respect. Liens generally require possession of the ‘res’ before they can come into effect. As an example an innkeeper has a lien over his guest’s luggage against the payment of the bill, but if the guest is smart enough to remove his luggage, the innkeeper is left without a lien. But a maritime lien does not require prior possession for its creation. In a fit and proper case a claimant on the strength of his maritime lien can secure the arrest of a ship which then comes under the possession of the court and she cannot be moved without the court’s order.= This would show, on the respondent’s own admission made in the plaint dated 9.5.2000, that monies were not yet received under the Letter of Credit even on 9.5.2000 and that, therefore, an injunction should be granted restraining defendant no.1 from receiving this money and against the Bank of Baroda – plaintiff’s bank – from making any such payment to defendant no.1. Thus, it is clear that the High Court was not correct in its view that it was proved by respondent no.1 that sale had taken place in April, 2000 by Fairsteel Corporation to respondent no.1 by which respondent no.1 became the owner of the vessel. It is clear, therefore, that respondent no. 1 has failed to prove that there was a change of ownership of the vessel in its favour on the date of arrest i.e. on 2.5.2000. This being the case, we set aside the judgment of the High Court and restore the decree of the trial court which reads as under:- “In the result, the suit succeeds. There would be a decree as against the vessel M.V. Nikolaos-S of US$ 94,611.25 equivalent to Rs.42,57,500.00 in Indian currency. The plaintiff would be entitled to recover the said sum from the cash security furnished to the Registrar, High Court, Original Side together with accrued interest thereon. The Registrar, Original Side, High Court, however, is entitled to deduct necessary commission applicable thereto.”