TaxTMI 
TaxTMI 
2006 (3) TMI 145
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....bers belonging to Ukraine was spotted by the Officers of the Customs Department in the Indian territorial waters. It was noticed by the Department that the vessel was loaded with steel products on 22-12-1999. 3.On 24-12-1999, interim order arresting the vessel was passed and a receiver was appointed for valuing the cargo and to take possession of it. On the same day, the master of the ship committed suicide. The crew were kept under arrest till 1-1-2000. Due to the suit filed by the underwriters for T.W. Metals Ltd., the vessel was towed to Madras Port. On 14-1-2000, the learned Single Judge of the Madras High Court ordered for sale of ship. The appellant - O. Konavalov, who was the Chief Officer, filed an application No. 633/2000 claiming wages from out of the sale of the ship. The Application was filed under Order XIV Rule 8 of the Original Side Rules read with Section 125 of the Merchant Shipping Act, 1958 praying to direct the receiver to pay wages to crew members out of the proceeds of the sale of the vessel. However, the Coast Guard moved the Division Bench of the High Court by way of OSA No. 42/2000 seeking the stay of the sale of the ship in view of the pending investiga....
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....de to suffer again by denying their legitimate wages. The Court has further observed that since the Custom Authorities have already sold the cargo for a price of Rs.16 Crores and the money is available with them, it is the paramount duty of the Government Agencies to meet the lawful claim of the crew men belonging to a different country. 6.Aggrieved by the above order, respondent Nos. 1 and 2 filed two appeals, namely, O.S.A. Nos. 309 and 350 of 2000 before the Division Bench of the High Court. The Commissioner of Customs, Madras passed an order confiscating the vessel absolutely under Section 115(2) of the Customs Act, 1962. 7.Before the Division Bench, the respondents contended the follow -ing :- (a) The Merchant Shipping Act, 1958 is not applicable to the foreign sea men. (b) The crew members had to file an independent Suit and an application in the pending matter is not maintainable. (c) Since the Government has confiscated the ship the crew men have no lien on the ship. (d) The Petitioner herein who has ....
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....P. Mehrotra, learned Counsel and others for the contesting respondents. 14.Mr. Venkataramani, learned senior counsel for the appellant submitted the following at the time of hearing :- (a) That the action of the State has to be based on reasonableness and it cannot deprive the basic human rights afforded under the Constitution of India more so under Article 21; (b) That the judgment of the Division Bench is contrary to the principles laid down by this Court in M.V. Al Quamar's case and M.V. Elizabeth's case. In these cases, this Court has held that Maritime lien is a right which continues even if the ship is taken legally from an owner by requisition; (c) That the crew are not responsible for confiscation; (d) That in a recent decision of the Queens' Bench in the Admiralty Jurisdiction in the Lloyds Reports in the matter of "RUTA", it has been held that the wage claims have no alternative forms of redressal, but for claiming it from the proceeds of the ship and that it takes priority even to claims for salvage; ....
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....onfiscated the vessel absolutely under Section 115(2) of the Customs Act. The reasons given were: (i) Unauthorised deviation from the route required for cargo discharge; (ii) Entry into Indian territorial waters without intimating appropriate authorities; (iii) Violation of customs legal formalities in receipts of provisions/fuel clandestinely; (iv) Changing the name and colour of vessel during voyage for no valid reasons. The Customs Authorities then auctioned the confiscated ship. (f) That the ship was purchased by M/s. Chaudhary Industries Ship Breakers on tender held on 21-11-2001; (g) That since the ship has been confiscated, the Maritime lien ceases to exist. Quoting the ruling in The Bold Buccleugh - (1852) 7 MOO PC 267 case, it was submitted that Maritime lien ceases to be applicable in a situation where a Government has confiscated the vessel and claims ....
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....iscated for contravening the provisions of Section 30 of the Customs Act, 1962 as unclaimed. It was further submitted that the cargo was sold off by customs through auction and a sum of Rs. 18.75 Crores was realised. Since the vessel was used as a means of transport of the said cargo, it was deemed to have smuggled the cargo into the country and by virtue of the unauthorised entry on to Indian customs water and by not calling on at a specified port and not filing the import manifest the said vessel was absolutely confiscated under Section 115(2) of the Customs Act, 1962 and was sold later through tender sale for Rs. 2.36 Crores to M/s. Chaudhary Industries, Gujarat. It was further submitted that as a result of confiscation, the property in the ship vests absolutely with the Government and that in this view of the matter, no claim as to wages of the seamen can be entertained by the Government of India. 18.We have carefully perused the entire pleadings, all the annexures and judgments passed by the learned single Judge and of the Division Bench of the High Court. 19.The view taken by the Division Bench that consequent upon the confiscation of the ship, the property in the ship ....
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....pt by express provisions to the contrary. The provisions of Section 115 of the Customs Act, 1962 cannot be treated as such provisions to the contrary. The right to wages of seamen as wages of any employee is an integral part of the right to livelihood and is entitled to the protection under Article 21 of the Constitution of India. The right to dignity, which is recognised as guaranteed by Article 21 in so far as it is infringed by withholding of the means of livelihood by any means or process whatsoever would attract Article 21. The provisions of Section 144 of the MSA duly reflect this position. 22.This apart, provisions of Sections 115 and 126 of the Customs Act, 1962 cannot be read to include ex-proprietary power in regard to any property and, in particular, a property which is subject to charges and claims, the power to destroy and deny such charges and claims which are otherwise legal, valid and legitimate. In other words, in the context of Maritime law the exercise and power under Sections 115 and 126 are subject to satisfaction of claims and charges created and recognized by law in all civilized countries. 23.The most unique concept of all in Admiralty law is the Marit....
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..... Admiralty jurisdiction is an essential aspect of judicial88. sovereignty which under the Constitution and the laws is exercised by the High Court as a superior court of record administering justice in relation to persons and things within its jurisdiction. Power to enforce claims against foreign ships is an essential attribute of admiralty jurisdiction and it is assumed over such ships while they are within the jurisdiction of the High Court by arresting and detaining them. Admiralty jurisdiction, despite the peculiarities of its91. origin and growth - rooted as it is in history and nurtured by the growing demands of international trade - is nevertheless a part of the totality of jurisdiction vested in the High Court as a superior court of record, and it is not a distinct and separate jurisdiction as was once the position in England before the unification of courts. The 1890 and 1891 Acts specifically conferred admiralty jurisdiction on the Indian High Courts by reason of their being courts of unlimited jurisdiction. These Acts did not create any separate or distinct jurisdiction, but merely equated the Indian High Courts to the position of the English High Court (united an....
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....ee traceable to Sections 172, 173 and 176 of the Contract Act is capable of satisfaction from property in the hands of the Government obtained even by lawful seizure. In Bank of Bihar v. State of Bihar & Ors. (1971) Supp. S.C.R. 299. It was held as follows : "The pawnee had special property and a lien which was not of ordinary nature on the goods and so long as his claim was not satisfied no other creditor of the pawnor had any right to take away the goods or its price. After the goods had been seized by the Government it was bound to pay the amount due to the plaintiff and the balance could have been made available to satisfy the claim of other creditor of the pawnor. But by a mere act of lawful seizure the Government could not deprive the plaintiff of the amount which was secured by the pledge of the goods to it. As the act of the Government resulted in deprivation of the amount to which the plaintiff was entitled it was bound to reimburse the plaintiff for such amount which the plaintiff in ordinary course would have realized by sale of the goods pledged with it on the pawnor making a default in the payment of debt." 29.Seamen who have a right to wages, which right is enfo....
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....an be given therefore to Section 115 of the Customs Act merely from the dictionary meaning the word absolute as has been done by the Division Bench of the High Court. Since the order passed by the Commissioner of Customs proposed confiscation not on the ground of detection or seizure of any contraband which is sought to be brought into the territorial waters but for reasons of non-compliance with Section 30 of the Customs Act, 1962. The scope of Section 115(2) cannot be extended and be invoked as if this is a case of transport of contraband goods. 32.It is evident that because of the cargo which was being carried by the Ship (namely Steel) was treated as smuggled goods for reasons of non-compliance with Section 30 of the Customs Act, the confiscation of the Ship ensued owing to the confiscation of the goods. Sub-section (2) of Section 115 provide for relief against confiscation if it is established by the owner or the person incharge of the conveyance that the conveyance has been used for the prohibited purpose without their knowledge or connivance. The conclusion drawn by the Commissioner is set out below:- "When the master is in command of the vessel, the Chief Officer o....
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....dered to or injury caused by that property. Maritime lien attaches to the property in the event the cause of action arises and remains attached. Further the court observed that the lien continues even if the ship is taken legally from an owner by requisition). • It was argued by the appellant, quoting Sections 138, 139, 140, 141 and 144, that the right of the seaman to wages is unfettered and no limitation on the entitlement is under the Merchant Shipping Act. Therefore Section 115 of the Customs Act which talks about confiscation will not operate to the contrary. • Another argument that was raised by the appellant in the present appeals is that the right to wages of seamen as wages of any employee is integral to Article 21 of the Constitution, which talks about the right to life and liberty of every individual. Therefore it can be safely concluded that section 144 of the Merchant Shipping Act and Article 21 of the Constitution is tantamount. In this respect the appellants referred to Bank of Bihar v. State of Bihar (supra) case which laid down that the ....
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....6(1) of the Merchant Shipping Act, 1970 provides that, 'A seaman's lien, his remedies for the recovery of his wages....shall not be capable of being renounced by any agreement'. According to English Law, it is customary to regard the following causes of action as conferring a maritime lien, (i) damage resulting from a collision (ii) bottomry (iii) salvage (iv) wages of seamen (v) ship's masters wages and disbursements (vi) fee and expenses incurred by a receiver of wreck A Convention had come into place in 1993 which dealt with Maritime Regulations, however, the Convention does not define maritime liens but only listed them under Article 4 (convention Liens) namely :- • master and crew wages including costs of repatriation and social insurance contributions • claims for loss of life or personal injury in direct connection wi....
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....cally provides for maritime lien to the crew on the vessel. And it is very clear in judicial practice that no statutory rule can ever come in the way of the implementation of any customary practice which has the force of law. The requirement for any customary practice to have force of law is its practice for a long time and the absence of any statutory provision expressly prohibiting the implementation of that particular custom in force, the customary practice of the exercise maritime lien by the crew members satisfies both these requirements. Thus Section 115 of the Customs Act which talks about confiscation will not operate to disentitle the crew of the lien that they can exercise on the vessel for the recovery of their wages which is an established practice in the law of the seas. 40.Also the reliance placed by the Division Bench on 1959 SCR 821 and (1974) 3 SCR 833 decisions in holding that, after order of confiscation of a vessel and goods is passed, it operates against all even if they are not parties to the proceedings, is inappropriate as stated by the counsel for the appellants before the High Court because neither of the above cited cases concern or relate to the asser....
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.... briefs, the king found that one man had a son and other a daughter. He arranged their betrothal to one another and bestowed the trove on them. Alexander, laughing, was asked how he would have ruled on such a case in his own land. I would have executed both of them and confiscated the treasure". So King Katzya set out a meal all of gold. When Alexander objected that he did not eat gold, the King exclaimed, with an imprecation: "Why then do you love it so?" He then asked whether the sun shone and the rain fell in Alexander's country and whether there were livestock there. On hearing that there were, he exclaimed, again with an imprecation, "Why then it is only by the desert of those cattle that you survive. 44.Judicial Review would therefore have to be the ever sustaining appreciation of the 'desert' of all beings in nature and all orders of nature to the possibility of human life and the need to avoid at any cost the high probabilities of not only the extinction of the species but destruction of the rich and wonderful variety of Natures productions. In other words it is more urgent to see judicial review as one of the most immediate means of generating concern for life beyond....