STATE OF UKRAINE Vs. MD SHAFIQUE KHAN

JUDGEMENT

(1.) While considering the application for stay, on consent of the parties, the appeal itself was taken up for hearing since the issue raised in the appeal involved a point of law which was capable of being decided on the materials already on record.

(2.) The appellant in the instant appeal is the State of Ukraine and claims to be the owner of a vessel by the name of "M.V. Toyvo Antikaynen" registered at Odessa in the State of Ukraine. According to the case as made out, the said vessel is registered in the name of the Black Sea Shipping Company which was at all material times the operating agent of the vessel and is an instrumentality of the State of Ukraine. The said vessel arrived at the Port of Calcutta on 5th May, 1997, for discharging cargo and was berthed at Khidirpur Docks in Calcutta. At the relevant point of time the appellant had entered into a time charter with one Asia Express Shipping Agency and the said charter was subsisting when the vessel was berthed at Calcutta. The Diamond Shipping Company is the agent of the Asia Express Shipping Agency. While the ship was berthed in Calcutta Dock some time in the middle of 1997, three business organizations, namely, Spence & Company, Bombay Marine Company and Elitarius Limited, caused the said vessel to be arrested in the Port of Calcutta. According to the appellant, in each of the suits which the said parties had filed, applications were made on behalf of the appellant herein under Order 7 Rule 11 of the Code of Civil Procedure to take the plaint off the file, inter alia, on the ground that the said vessel was owned by the State of Ukraine and that the suit had been filed without obtaining sanction of the Central Government to prosecute a Foreign State and/or to maintain an action against the vessel of the said State under section 86 of the Code of Civil Procedure. The said plea of sovereign immunity was rejected by this Court and against the order of the Division Bench rejecting such plea the appellant moved the Hon'ble Supreme Court which did not, however, grant any stay against the order of the Division Bench of this Court.

(3.) Meanwhile, various parties had instituted proceedings against the said vessel in this Court and in each suit applications were filed on behalf of the appellant under Order 7 Rule 11 of the Code of Civil Procedure. One such suit was A.S. No. 15 of 1997 (Diamond Shipping Company Ltd. vs. Owners and parties interested in the vessel "M.V. Toyvo Antikaynen"). In the said suit, after dismissing the application under Order 7 Rule 11 of the Code of Civil Procedure on 27th March, 1998, by a further order dated 3rd April, 1998, the learned Trial 'Judge appointed Joint Special Officers to make an inventory of the vessel. Pursuant to such inspection, a report was filed by the Joint Special Officers stating that the vessel was not sea-worthy, and, ultimately, by an order dated 21st August, 1998, this Court confirmed sale of the vessel in favour of Lala Shyamlal Jain Ship-Breaking Company on 21st August, 1998. The crew of the vessel had also filed a suit in respect of their dues and were directed to be paid out from the moneys lying in the hands of the Joint Special Officers by diverse ' orders passed from time to time. The Calcutta Port Trust Authorities and other claimants were also directed to be paid by this Court. However, on 24th November, 1998, having regard to the pendency of the appeal before the Hon'ble Supreme Court, this Court directed that no further sums were to be disbursed from the amounts held by the Joint Special Officers.