Case Note & Summary
The dispute arose from the breakage of an international submarine cable extending from Singapore to France with branches at Bombay, owned by Videsh Sanchar Nigam Ltd. (appellant). On July 21, 1995, the cable was found damaged, and the appellant identified the fault point about 18.3 km from its Prabhadevi office in Greater Bombay. Coast Guard authorities were immediately informed and conducted a helicopter survey. The survey located the vessel M.V. Kapitan Kud, registered in Odessa, anchored near the break point, and no other vessel was found in the vicinity. A cable repair ship reported that the damage was caused by shift anchor. The appellant filed Admiralty Suit No. 46 of 1995 on July 29, 1995, claiming damages of approximately Rs.28 crores, and obtained an ex parte order of arrest of the vessel. The respondent vessel did not apply for release until September 1, 1995. The learned single judge dismissed the release motion, but the Division Bench of the Bombay High Court, by order dated October 13, 1995, modified the single judge's order and directed release of the vessel. The appellant challenged this order before the Supreme Court by special leave.
Headnote
A) Admiralty Law - Arrest of Vessel - Prima Facie Case - Code of Civil Procedure, 1908, Section 140; Bombay High Court Original Side Rules, Rule 954 - The appellant claimed damages of about Rs.28 crores for breakage of an international submarine cable allegedly caused by the respondent vessel's anchor. The Court examined whether the appellant had a reasonably arguable best case, relying on the assessors' report under Section 140 CPC and contemporaneous evidence of the Coast Guard and cable repair ship. Held that the assessors' report was not partial or one-sided and established a high probability that the respondent vessel caused the damage, thus a prima facie case was made out for continued arrest (Paras 1-7). B) Civil Procedure - Interim Injunction - Undertaking for Damages - Code of Civil Procedure, 1908, Order 39 Rule 1; Bombay High Court Original Side Rules, Rule 941 - The Court referred to Mahadeo Savlaram Shelke & Ors. v. Pune Municipal Corporation & Anr. and observed that while granting interim relief, the court should impose conditions for compensation if the plaintiff fails. In admiralty actions, a party applying for arrest must give an undertaking in writing to pay damages in case of prejudice. Held that such undertaking is a necessary safeguard, and the plaintiff's undertaking was implied in the arrest order (Paras 1-7). C) Admiralty Law - Release of Arrested Property - Security Requirements - Bombay High Court Original Side Rules, Rules 952, 954 - Rule 954 provides that a ship arrested under warrant may be released upon the plaintiff's request, payment of the claim amount into court, furnishing security as directed, or any other just ground. The Court noted that the usual step for release is to provide security for the plaintiff's claim, as per Halsbury's Laws of England. Held that since the appellant had a prima facie case, the vessel should not be released without adequate security (Paras 1-7). D) Evidence - Expert Reports - Credibility of Commissioners' Report - Code of Civil Procedure, 1908, Section 140 - The Division Bench appointed two nautical commissioners whose report favoured the vessel, but the appellant alleged that its advocate and solicitor were wrongfully confined and prevented from participating in the inspection. The Court held that the commissioners' report lost credibility due to the absence of the appellant's representatives, while the statutory assessors' report remained reliable. Held that the assessors' report, based on available material including the captain's affidavit and Coast Guard reports, supported the prima facie case (Paras 1-7).
Issue of Consideration
Whether the appellant had made out a prima facie case for the arrest of the respondent vessel in an admiralty suit for damage to a submarine cable, and whether the Division Bench erred in directing release of the vessel.
Final Decision
The Supreme Court set aside the Division Bench order and restored the arrest of the vessel, holding that the appellant had established a prima facie case and the vessel should not be released without adequate security.
Law Points
- Admiralty jurisdiction
- arrest of vessel
- prima facie case
- release on security
- Rule 954 of Admiralty Rules
- Section 140 CPC
- undertaking for damages
- Order 39 Rule 1 CPC
- assessors report
- reasonably arguable best case
