KHAIRUL JABBAR Vs. L C T KOREA HORIZON

JUDGEMENT

(1.) THE plaintiffs in this suit are members of the crew of the defendant No. 1 vessel i. e. L. C. T. Korea Horizon. They have filed this suit for recovery of the arrears of their salary as also certain sums which the plaintiffs paid on maintenance of the vessel. The defendant No. 1 vessel was a vessel of Panama Registry, defendant No. 2 is the owner of that vessel. It may be pointed out here that the vessel was arrested by an order made by this court. Thereafter, the vessel has been sold and the sale proceeds are presently lying in the Court. The plaintiffs are therefore claiming a decree. They also claim that decretal amount shall be paid to them from sale proceeds of the vessel. The monetary decree sought by the plaintiffs is not opposed by the defendant No. 2. The suit is opposed only by defendant No. 4 Union of India.

(2.) IT appears that in the month of April 1989, the defendant No. 1 vessel was seized by the authorities of the Customs Department. This suit appears to have been filed in the month of October 1989. It appears that after filing the suit, an order for arrest of the vessel was secured from the Court. The order is dated 11th October, 1989. It appears that thereafter this Court made an order dated 8th December, 1989 for sale of the defendant No. 1 vessel. It may be pointed out here that when the suit was filed, Union of India was not joined as the defendant in the suit. It appears that the Union of India was joined as defendant subsequently. It further appears that by an order dated 24th January, 1990 by this Court, the proceedings for sale of the vessel were stayed. In the meantime, the Collector of Customs passed an order dated 4th june 1990 confiscating the vessel and imposing a penalty in the amount of rs. 70,70,000/- on the crew members and the master of the vessel. It may be pointed out that in so far as the plaintiffs are concerned, the amount of penalty imposed on them by the order dated 4th June, 1990, is Rs. 70,000. 00. By that order, confiscation of vessel was ordered but the option was given to the owner of the vessel to redeem the vessel by paying a fine of Rs. 15,00,000. 00 it further appears that the matter in relation to the sale of the vessel came before the Court on 14th June, 1991 and the authorities of the Customs department gave their consent for the sale to proceed further. Accordingly proceedings for sale of the vessel were continued and the vessel was sold. The matter came up before the Court on 20th August, 1991 for confirmation of the sale. The Court confirmed the sale of the vessel. The Court further directed that out of the sale proceeds, the Sheriff to pay an amount of Rs. 9,88,681. 00 to the Bombay Port Trust towards their dues, to the Customs authorities an amount of Rs. 15,00,000. 00 towards redemption fine and the b. P. T. and Customs Authorities were directed on receiving the amounts to release the vessel by lifting arrest and seizure. The Court clarified that the b. P. T. and Customs Authorities shall be at liberty to adopt such proceedings as they may be advised for their balance claims. It appears that Notice of motion No. 2047 of 1991 was taken out immediately thereafter by the Customs Authorities i. e. on 18th September, 1991 for payment of Rs. 70,000. 00 from the salary dues payable to the plaintiffs towards personal penalty imposed on them by order dated 4th June, 1990. That Notice of Motion was decided by order dated 3rd April, 1992 and the Court granted that Notice of motion in terms of prayer Clauses (a) and (b ). It further appears that by an order dated 21st July, 1992, the plaintiffs were permitted to delete the Union of India as defendant in the suit and it was in the absence of Union of India the suit on deleting Union of India by order 21st July, 1992 was decreed in favour of the plaintiffs. The order of the Court decreeding the suit was challenged before the Supreme Court. The Supreme Court set aside the decree passed by this Court and also set aside the order passed by the Court deleting union of India as the defendant in the suit. The order of the Supreme Court is dated 1st December, 1992. It further appears that the owner had filed an appeal against the order dated 4th June, 1991 passed by the Collector of customs before the Customs, Excise and Gold Control Appellate Tribunal. That appeal came to be decided by the Tribunal by order dated 26th February, 1996. By that order, the Appellate Authority reduced the fine imposed on the vessel from Rs. 15,00,000. 00 to Rs. 10,00,000. 00 The Appellate Tribunal also reduced the penalty imposed on the two appellants before it to Rs. 5,000/ each. It appears that by the order passed by the Appellate Tribunal, the amount of redemption fine was reduced from Rs. 15,00,000. 00 to Rs. 10,00,000/ the Customs Authorities have deposited the amount of Rs. 5,00,000. 00 in this Court which was paid to them pursuant to the order dated 20th August, 1991 passed by this Court, be the Sheriff from the sale proceeds of the vessel.

(3.) AS observed above, the suit is not opposed by any of the defendants except defendant No. 4 Union of India. The Union of India also does not dispute the entitlement of the plaintiffs to receive the amounts which they have claimed in this suit. The case of the defendant No. 4 Union of India is that before paying the amount of salary and expenses incurred by the plaintiffs on the vessel out of the sale proceeds of the vessel, the defendant No. 4 is entitled to receive the amount of Rs. 70,00,000. 00 i. e. the amount of penalty imposed on the crew members of the vessel by the order dated 4th June, 1991. In the alternative, it is claimed that as the vessel was confiscated before it was sold and as the redemption fine was not paid by the owner of the vessel by payment of redemption fine, the confiscation of the vessel does not come to an end and therefore, the vessel continued to be confiscated and therefore, Union of India would be entitled to receive the entire sale proceeds of the vessel. On behalf of the plaintiffs, in so far as the demand of the defendant No. 4 is concerned, it is submitted that the amount of Rs. 70,00,000. 00 which the defendant No. 4 is claiming from the sale proceeds of the vessel, is the amount of personal penalty imposed on the crew members. Therefore, it will not be liability against the owner of the vessel and the amount of penalty cannot be recovered from the sale proceeds of the vessel which was the property of the owner of the vessel. It is further contended that by the order passed by the collector of Customs, confiscation of the vessel was ordered but an option was given to the owner to redeem the vessel on payment of fine of Rs. 15,00,000. 00 Pursuant to the order passed by this Court, the fine of Rs. 15,00,000. 00 was paid and therefore, the vessel stood released from confiscation. It is submitted that this Court has in term stated that on payment of the amount of fine from the sale proceeds of the vessel, the vessel shall stand released from seizure. Thus, according to the plaintiffs, the defendant No. 4 union of India is not justified either in claiming amount of Rs. 70,00,000. 00 from the sale proceeds or claiming the entire sale proceeds on the ground that the vessel was confiscated.