Synergy Shipping Pvt Ltd (Synergy) was nominated as the cargo handling agent for the MV Royal Pisces when it arrived at Visakhapatnam Port in August 2008, then owned by SKS Logistics, Mumbai. Synergy rendered various services, including supplies of necessaries, bunkers, and fresh water; and claimed also to have paid pilotage, port dues, berth hire, and customs, immigration, and port health officer's charges on the owner's behalf. It raised three invoices totalling INR 1,935,002. The then owner made three payments totalling INR 1,750,000, none of which was appropriated to particular items, leaving INR 185,002 unpaid. The vessel was subsequently renamed the MV Anushree Fame and was sold to its present owners in September 2009.

Invoking the admiralty jurisdiction of the High Court of Madras, Synergy sued the owners and parties interested in the vessel for INR 273,802 with interest, and for arrest and sale. On 27 August 2010, the Court granted an ex parte order of arrest while the vessel was berthed at Tuticorin. The defendant immediately offered to deposit the suit claim into Court, and the vessel was released on 31 August 2010. The defendant then applied for rejection of the plaint and for a refund of the deposit, contending that the supply of necessaries gives rise to a mere maritime claim and not a maritime lien; that only five heads of claim (damage done by a ship, salvage, seamen's wages, the master's wages and disbursements, and bottomry) constitute maritime liens; and that, under art 3(1)(a) of the Arrest Convention 1999, a ship may be arrested for a maritime claim only where the person liable owned the ship when the claim arose and still owns it when the arrest is effected, which was not the case here.

Held: Applications for rejection of the plaint and for refund of the security dismissed. The deposit is to be kept in fixed deposit for a period of one year, the defendant is directed to file a written statement, and the trial is expedited. It is open to the defendant to take recourse to Order VIII-A CPC to bring in the previous owner.

On an application for rejection of the plaint, the Court has to go only by the plaint averments and not by any defence that the defendant may be entitled to. The supply of necessaries to a vessel constitutes a mere maritime claim and does not give rise to a maritime lien: Interaccess Marine Bunkering Ltd v KM Allauddin 2009 (3) CTC 611. If the entire claim fell under the category of maritime claim, the only remedy would be a suit for the recovery of money against the owner, and 'when admittedly the ownership of the vessel had changed and if the entire claim would fall under the category of maritime claim, an admiralty suit would be barred by law'.

However, the plaint proceeds on the footing that port charges and pilotage dues were also paid by the plaintiff, and 'under Article 4 of the International Convention of Maritime Liens and Mortgages, 1993, claims for port, canal and other waterway dues and pilotage dues constitute a maritime lien'. The plaintiff has come up with a mixture of maritime claim and maritime lien; whether that is factually correct can be found out only after taking evidence, and the plaint therefore cannot be rejected at this threshold stage.

As to the refund of the deposit, the defendant's deposit of the suit claim was an act of prudence to mitigate the losses of continued arrest and detention, and did not amount to waiver, acquiescence, or estoppel: Sha Mulchand & Co Ltd v Jawahar Mills Ltd AIR 1953 SC 98. On the merits, the owner's payments were not made towards any particular items, and the law relating to appropriation permits the plaintiff to appropriate them towards any claims and to retain the claims that may constitute a maritime lien. If the claim is in respect of services falling under the category of maritime lien, 'the claim of the plaintiff would follow the vessel, irrespective of the change of the ownership', and the money deposited constitutes the security furnished for the vessel's release.

The defendant relied on arts 1.1 and 3.1.a of the Arrest Convention 1999 to contend that all the plaintiff's claims constituted only maritime claims: ie, art 1.1 relating to goods, materials, provisions, bunkers, and services supplied to the ship for its operation, management, or maintenance; and art 3.1.a confining arrest to ships still owned by the person liable. But the plaintiff's claims include dues to the port and pilotage fees, which 'constitute a maritime lien, if proved. Therefore, the Convention does not go to the rescue of the defendant.' Since a few items in the invoices may constitute a maritime lien, subject to the evidence at trial, the liability of the defendant either to be arrested or to furnish security cannot be questioned, and the refund of the amount, which has now replaced the vessel, cannot be granted.