Admiralty jurisdiction survives general debt-recovery law, and part of the maritime cause of action can found territorial jurisdiction.

The Bombay HC held that the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 did not oust admiralty jurisdiction in a bank's action in rem against a vessel and its owners, because the Act's general bar did not expressly exclude the special maritime remedy preserved under Article 225 and supported by the constitutional allocation of admiralty power. It also held that territorial jurisdiction existed where part of the maritime cause of action arose within Bombay, since the mortgage, guarantee, advance, and repayment arrangements were made there. The preliminary objections were therefore rejected and the Court proceeded with the admiralty suit.

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Issues: (i) Whether the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 ousted the High Court's admiralty jurisdiction in a suit by a bank against a vessel and its owners; (ii) Whether the High Court had territorial jurisdiction to entertain the suit though the vessel was registered and lying outside Maharashtra.

Issue (i): Whether the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 ousted the High Court's admiralty jurisdiction in a suit by a bank against a vessel and its owners.

Analysis: The statutory scheme of the admiralty jurisdiction and the Merchant Shipping Act, 1956 showed that a mortgagee of a ship may recover dues through the High Court and that an action in rem lies against the vessel itself. The definition of "debt" under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 was held not to comprehend a vessel treated as a person in admiralty law. The bar of jurisdiction and overriding clause in that Act were held to be general provisions and not an express exclusion of the special admiralty remedy preserved by Article 225 of the Constitution of India and supported by the legislative competence under Entry 95 of List I of the Seventh Schedule to the Constitution of India. The admiralty remedy was also treated as more efficacious and not displaced by the debt recovery forum.

Conclusion: The High Court's admiralty jurisdiction was not ousted, and the objection under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 failed.

Issue (ii): Whether the High Court had territorial jurisdiction to entertain the suit though the vessel was registered and lying outside Maharashtra.

Analysis: Section 3(15) of the Merchant Shipping Act, 1956 treated the High Court within whose appellate jurisdiction the port of registry is situated, or where the cause of action wholly or in part arises, as the relevant High Court in relation to the vessel. The mortgage and guarantee arrangements were entered into at Bombay, the loan was advanced there, and repayment was also stipulated there, so a part of the cause of action arose within Bombay.

Conclusion: The High Court had territorial jurisdiction to entertain the suit.

Final Conclusion: The preliminary objections were rejected and the Court affirmed its jurisdiction to proceed with the admiralty suit.

Ratio Decidendi: A general debt-recovery statute does not oust a pre-existing and special admiralty jurisdiction to entertain an action in rem against a vessel, and territorial jurisdiction is attracted where part of the maritime cause of action arises within the High Court's limits.

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