OWNERS AND PARTIES INTERESTED IN THE VESSEL M.V. POLARIS GALAXY versus BANQUE CANTONALE DE GENEVE on 23 September 2022

OWNERS AND PARTIES INTERESTED IN THE VESSEL M.V.POLARIS GALAXY

v.

BANQUE CANTONALE DE GENEVE

(Civil Appeal Nos. 6897-6898 of 2022)

SEPTEMBER 23, 2022

[INDIRA BANERJEE AND A. S. BOPANNA, JJ.]

Admiralty (Jurisdiction and Settlement of Maritime Claims)Act, 2017 – s.14 – Code of Civil Procedure, 1908 – Or.1 r.10(2) –Commercial Courts Act, 2015 – Whether an appeal lies to theCommercial Appellate Division of the High Court from an order ofthe Commercial Division (Single Bench) of the same High Court foraddition of a party, in an Admiralty Suit governed by the AdmiraltyAct – Held: No – An order for addition of a party u/Or.1 r.10(2) ofthe CPC is not appealable u/s.14 of the Admiralty Act –MaritimeLaws.

Admiralty (Jurisdiction and Settlement of Maritime Claims)Act, 2017 – ss.12, 14 – Code of Civil Procedure, 1908 – Or. 1 r.10(2),Or.43 r.1 – Commercial Courts Act, 2015 – s.13 – Interpretation ofStatutes – Harmonious Construction – Held: s.14 of the AdmiraltyAct provides the fora for an appeal from any judgment, decree,final order or interim order of a Single Judge of the High Courtunder the Admiralty Act to a Division Bench of the High Court –“any interim order” has to be read harmoniously with Or. 43, r. 1 ofthe CPC in view of s.12 of the Admiralty Act r/w s.13 of theCommercial Courts Act – It is not the intent of the overridingprovision of s.14 to nullify s.12 of the Admiralty Act – s.12 of theAdmiralty Act applies to all proceedings in the High Court whetherthey be original proceedings or appellate proceedings – On aharmonious reading of ss.12 and 14 of the Admiralty Act with s.13of the Commercial Courts Act, an intra-court appeal under theAdmiralty Act to the Commercial Division of the High Court wouldlie from any judgment, decree or final order under the AdmiraltyAct or an interim order under the Admiralty Act relatable to theorders specified in Or. 43, r.1 – It could not possibly have been thelegislative intent of the Admiralty Act to make all interim orders

1

A

B

CD

EF

GH

Aappealable – Such a wide interpretation of the expression “interimorder” would mean that any party would be able to delay the trialand final disposal by filing appeals even from inconsequential orderscalling for affidavits and the like – Maritime Laws.Bills of Lading – Concept of – Law governing bills of ladingB– Discussed.

Interpretation of Statutes – Non-Obstante Clause in two ormore statutes – Held: As a general rule, the Special Statutes prevailover General Statutes – If both statutes are general statutes orspecial statutes containing identical or similar non-obstante clauses,Cthe later statute would prevail – However, the rule that a non-obstanteclause in a later statute prevails over the non-obstante clause in anearlier statute is not an absolute rule – The question of whichprovision prevails, would necessarily depend on the object of theenactment and, in particular, the object of giving overriding effectto the enactment or any specific provision thereof – When two orDmore enactments operating in the same field contain a non obstanteclause stating that its provisions will have effect notwithstandinganything inconsistent therewith contained in any other law, theconflict has to be resolved upon consideration of the purpose andpolicy underlying the enactments – Maxims – Generalia SpecialibusENon Derogant.

Commercial Courts Act, 2015 – s.2(1)(c)(iii) – Held: A disputearising out of issues relating to admiralty and maritime law is acommercial dispute as defined in s.2(1)(c)(iii) of the CommercialCourts Act – Maritime Laws.F

Allowing the appeals, the Court

Conclusion

HELD: 1.1 Section 12 of the Admiralty Act applies theprovisions of the CPC to all Admiralty proceedings in the HighCourt. Section 16 of the Commercial Courts Act makes it explicitthat the provisions of CPC, as amended by the Schedule to theGCommercial Courts Act, applies to suits relating to commercialdisputes governed by the Commercial Courts Act. There can beno doubt that the Commercial Division of the High Court has thepower to add a party to an Admiralty suit, on its own, without anyapplication having been made, if it is of the view that the presenceof that party before the Court may be necessary to effectivelyH

and completely adjudicate upon and settle all the questionsinvolved in the suit. The question is whether an order of theCommercial Court or the Commercial Division of the High Court,adding a party to an Admiralty Suit, is appealable under Section13 of the Commercial Courts Act, read with Section 14 of theAdmiralty Act. [Paras 61, 62][27-B-D]

1.2 Both Section 13 of the Commercial Courts Act andSection 14 of the Admiralty Act contain non-obstante clausesgiving the Sections overriding effect. While Section 14 of theAdmiralty Act which begins with a non-obstante clause asobserved, provides that notwithstanding contained in any otherlaw for the time being in force, an appeal shall lie from anyjudgment, decree or final order or interim order under theAdmiralty Act, of a Single Judge of the High Court to a DivisionBench of the High Court, Section 13(2) of the Commercial CourtsAct says notwithstanding anything contained in any other law forthe time being in force, or the Letters Patent of the High Court,no appeal shall lie from any order or decree of a CommercialDivision or Commercial Court otherwise than in accordance withthe provisions of the Commercial Courts Act. The provisorestricts an appeal under the Commercial Courts Act, to suchorders as are specifically enumerated in Order 43 of the CPC.[Para 67][29-F-H][30-A-B]

1.3 A clause with the words “notwithstanding anythingcontained in any other law for the time being in force” is generallyappended at the beginning of a section with a view to give theenacting part of the section overriding effect in case of conflictwith any other law. Ordinarily, when two or more statutes containstatutory provisions which start with the clause “notwithstandinganything contained in any other law for the time being in force”and those statutes contain conflicting provisions, a question thatcould arise is, which statute would prevail. As a general rule, theSpecial Statutes prevail over General Statutes. If both statutesare general statutes or special statutes containing identical orsimilar non-obstante clauses, the later statute would prevail. Therule that a non-obstante clause in a later statute prevails overthe non-obstante clause in an earlier statute is not an absoluterule. The question of which provision prevails, would necessarily C

D

E

F

GH

Adepend on the object of the enactment and, in particular, the objectof giving overriding effect to the enactment or any specificprovision thereof. When two or more enactments operating inthe same field contain a non obstante clause stating that itsprovisions will have effect notwithstanding anything inconsistenttherewith contained in any other law, the conflict has to beBresolved upon consideration of the purpose and policy underlyingthe enactments. [Paras 68-70][30-B-F]

M V Elizabeth v. Harwan Investment and Trading Pvt.Ltd. (1993) 2 Supp SCC 433 – referred to.

C2.1 A dispute arising out of issues relating to admiralty andmaritime law is a commercial dispute as defined in Section 2(1)(c)(iii) of the Commercial Courts Act. It is clear from a reading ofthe Admiralty Act and the Commercial Courts Act, that orderspassed under the Admiralty Act pertaining to the exercise of inrem jurisdiction by the High Court are the only orders which areDappealable under section 14 of the Admiralty Act, whereas orderspassed in the trial of a suit and on applications made under theprovisions of the Code of Civil Procedure, 1908 are not ordersunder the Admiralty Act but orders under the CPC which wouldbe appealable only if they fall under Order 43 of the CPC asEprovided in Section 13 of the Commercial Courts Act. Both theAdmiralty Act and Commercial Courts Act are Special Acts. Evenassuming that the Commercial Courts Act provisions areconsidered to be general provisions relating to appeals, whilstthe provisions in the Admiralty Act are considered to be specialprovision for appeal, then too the maxim Generalia SpecialibusFNon Derogant, which is ordinarily attracted where there is aconflict between a special and a general statute, would not apply.[Paras 73, 78-80][31-E-F; 33-E-G; 34-B-C]

Ashoka Marketing Ltd. v. Punjab National Bank (1990)4 SCC 406 : [1990] 3 SCR 649 – followed.GKandla Corporation v. OCI Corp. (2018) 14 SCC 715: [2018] 1 SCR 915 – relied on.

CTO v. Binani Cements 2014 SCC Online SC 140 –referred to.

H

2.2 If such an order under the Code of Civil Procedurewhich does not fall under Order XLIII of CPC is held to beappealable, then the entire purpose of the Commercial CourtsAct would be defeated, and every single order passed in a courseof a trial of an admiralty suit would be appealable under section14 of the Act. Such orders would be large in number includingorders in relation to discovery, inspection, case managementhearing, admissibility of evidence, framing of issues,interrogatories, etc. This would make a mockery of the intendedpurpose of Parliament in enacting the Commercial Courts Act,which is to expedite trials in commercial suits of a specified value,and restrict the number of interlocutory appeals. An order foraddition of a party under Order 1 Rule 10(2) of the CPC is notappealable under section 14 of the Admiralty Act. Gulf Petrochemis a party to the dispute and the suit transaction and the Contractof Carriage (Bill of Lading) and hence is a necessary party. GulfPetrochem is also a proper party whose presence is necessaryfor complete and final decision on questions in the suit. Thepleadings in Paragraphs 10 to 12 of the Plaint [Page 264] whichare extracted in the Impugned Judgement at Page 11-13demonstrate that Gulf Petrochem is a proper and necessary partyeven though the Respondent may choose not to claim any reliefsagainst them in the present Suit. [Paras 81-83][35-G-H; 36-A-E]

Anil Kumar Singh v. Shivnath Mishra (1995) 3 SCC147 : [1994] 5 Suppl. SCR 135 – relied on.

2.3 Section 14 of the Admiralty Act provides the fora for anappeal from any judgment, decree, final order or interim order ofa Single Judge of the High Court under the Admiralty Act to aDivision Bench of the High Court. The expression “any interimorder” has to be read harmoniously with Order 43, Rule 1 of theCode of Civil Procedure in view of Section 12 of the AdmiraltyAct read with Section 13 of the Commercial Courts Act. It is notthe intent of the overriding provision of Section 14 to nullifySection 12 of the Admiralty Act. Section 12 of the Admiralty Actapplies to all proceedings in the High Court whether they beoriginal proceedings or appellate proceedings. On a harmoniousreading of Sections 12 and 14 of the Admiralty Act with Section AB

C

DE

F

G

H

AB

C

DE

F

G

H

A13 of the Commercial Courts Act, an intra-court appeal underthe Admiralty Act to the Commercial Division of the High Courtwould lie from any judgment, decree or final order under theAdmiralty Act or an interim order under the Admiralty Actrelatable to the orders specified in Order 43, Rule 1. [Paras 84-86][36-F-H; 37-A-B]B

2.4 It could not possibly have been the legislative intent ofthe Admiralty Act to make all interim orders appealable. Such awide interpretation of the expression “interim order” would meanthat any party would be able to delay the trial and final disposal byfiling appeals even from inconsequential orders calling forCaffidavits and the like. We, therefore, hold that an appeal doesnot lie to the Commercial Appellate Division of the High Courtfrom an order of the Commercial Division (Single Bench) of thesame High Court for addition of a party in an admiralty suitgoverned by the Admiralty Act. Even otherwise, the DivisionDBench erred in law in allowing the appeal from the order of theCommercial Division (Single Judge) adding Gulf Petroleum asparty defendant to the suit. [Paras 88, 89][37-D-F]

Cho Yang Shipping Co. Ltd. v. Coral (UK) Ltd. (1997)2 Lloyd’s Rep 641 – referred to.EMagic Frames v. Radiance Media P Ltd 2019 SCCOnline Mad 38929 – held inapplicable.

GFrom the Judgment and Order dated 28.10.2021 of the High Courtof Judicature at Madras in OSA (CAD) No. 88 of 2021 and CMP No.16921 of 2021.

K. V. Vishwanathan, Prashant S. Pratap, Sr. Advs., AmitavaMajumdar, Arvind Kumar Gupta, Pabita Dutta, Rishi Bhardwaj, AmartyaSaran, A. Sumant Gupta, Advs. for the Appellant.

Zarir Bharucha, Aditya Verma, Bimal Rajasekhar,Chandrashekhar Haridh, Ms. Priyamvada Mishra, Rigved Prasad, Advs.for the Respondent.

The Judgment of the Court was delivered by INDIRA BANERJEE, J.

Leave granted.

2. These appeals are against a judgment and order dated28[th] October 2021 passed by the Commercial Appellate Division of theHigh Court of Judicature at Madras allowing Commercial Appeal beingO.S.A (CAD) No.88 of 2021 filed by the Respondent, and setting asidean order dated 24[th] September 2021 passed by the Commercial Division(Single Bench) of the High Court, adding Gulf Petroleum FZC asdefendant in the Admiralty Suit filed by the Respondent, Banque NationaleDe Geneve being CS (Commercial Division) No.96 of 2021.

3. The Appellant, M/s Galaxy Marine Services Limited is theregistered owner of the Vessel, M. V. Polaris Galaxy, a sea-going oiltanker, flying the flag of Liberia, which is hereinafter referred to as, “theVessel”.

4. M/s Polaris Marine Services, acting as Commercial Managersof M/s Galaxy Marine Services, entered into a charterparty agreementwith Profitable Wealth Inc., a company registered in the British VirginIslands and operated by Wirana Shipping Corporation Private Limited, awell-known maritime company based in Singapore, for charter of thevessel to Profitable Wealth Inc. Profitable Wealth Inc. in turn sub-chartered the vessel to Gulf Petroleum FZC for carriage of cargo ofMarine Fuel Oil.

5. On 6[th] May 2020, Gulf Petroleum FZC entered into a contractfor purchase of 27-28,000 Metric Tons (MT) of Marine Fuel from IndianOil Corporation Limited (IOC) which was to be loaded at the KandlaPort, for discharge at Fujairah.

6. Gulf Petroleum FZC requested the Respondent, BanqueCantonale de Geneve, hereinafter referred to as the Respondent Bank, A

B

C

DE

F

G

H

Ato finance the purchase of the said 27-28,000 MT of Marine Fuel Oilfrom IOC. Gulf Petroleum FZC informed the Respondent that the MarineFuel Oil had been sold to Aramaco for delivery at Fujairah, on opencredit.

7. By a letter dated 11[th] May 2020, the Respondent Bank requestedBGulf Petroleum FZC to provide a copy of the Sale Contract betweenGulf Petroleum FZC and Aramco and also sought certain clarifications.On the same day i.e., 11[th] May 2020, Gulf Petroleum FZC and Aramcoentered into a Sale Contract for delivery of Marine Fuel Oil at Fujairahbetween 23-30 May 2020, against credit of 60 days from the date ofinvoice.C

8. On 12[th] May 2020, a copy of the Sale Contract between GulfPetroleum FZC and Aramco was forwarded to the Respondent Bank.Thereafter, the Respondent Bank agreed to finance the transaction. TheRespondent Bank issued a Letter of Credit in favour of IOC for USD6,050,000.00. The Letter of Credit provided that if original Bills of LadingDwere not available, then payment under the Letter of Credit would haveto be made against a Letter of Indemnity.

9. On 15[th] May 2020, Gulf Petroleum FZC requested theRespondent Bank to amend the Letter of Credit by changing the Port ofDischarge from Fujairah to Singapore. The Respondent Bank soughtEcertain clarifications on the proposed amendment.

10. On 15[th] May 2020, Gulf Petroleum FZC and Aramco made anaddendum to their Sale Contract changing the Port of Discharge fromFujairah to Singapore. On 17[th] May 2020, Gulf Petroleum FZC forwardeda copy of the addendum to the Sale Contract, to the Respondent Bank.FOn 18[th] May 2020, the Respondent Bank amended the Letter of Creditby changing the Port of Discharge from Fujairah to Singapore.

11. On 21[st] May 2020, the Master of the Vessel issued a Bill ofLading No.21052020/01, in respect of cargo of marine fuel. In terms ofthe Bill of Lading the consignee was the Respondent Bank, the ‘NotifyGParty’ was Gulf Petrochem FZC and the Port of Discharge wasSingapore. On the said date Gulf Petroleum FZC instructed the Masterof Vessel that the cargo should to be discharged to Chevron SingaporePrivate Limited (hereinafter referred to as “Chevron”) at the HorizonTerminal at Singapore.

H

12. On 24[th] May 2020, Profitable Wealth Inc. gave a Letter ofIndemnity to Polaris Marine Services. Gulf Petroleum FZC, in turn gavea counter-indemnity to Profitable Wealth Inc.

13. IOC issued an invoice dated 27[th] May 2020 for USD5,985,084.28 to Gulf Petroleum FZC. In terms of the Sale Contractbetween IOC and Gulf Petroleum FZC, the Respondent Bank honouredthe Letter of Credit and paid IOC the amount due in terms of the invoice.

14. On 31[st] May 2020, the Vessel arrived at the Port of Dischargeat Singapore and tendered its Notice of Readiness as per the instructionsof Gulf Petroleum FZC. By an email dated 2[nd] June 2020, Gulf PetroleumFZC requested the Vessel to tender Notice of Readiness to Chevronbeing receivers of the cargo. Thereafter, between 9[th] June 2020 and10[th] June 2020 the cargo was discharged at Horizon Terminal, Singapore.

15. On 11[th] June 2020, Gulf Petroleum FZC issued an invoice ofUSD 6,707,357.38 to Aramco under a Sale Contract with Aramco. Thedue date of the invoice was 10[th] August 2020 i.e. 60 days from the dateof discharge as agreed in terms of the Sale Contract.

16. On 15[th] June 2020, Gulf Petroleum FZC provided theRespondent Bank with a copy of the invoice issued by Gulf PetroleumFZC to Aramco. On 20[th] July 2020, GP Global Group being the parent/holding company of the Gulf Petroleum FZC issued a media statementwith regard to financial restructuring of Gulf Petroleum FZC on accountof financial difficulties.

17. Thereafter, news reports surfaced that GP Global Group haduncovered a massive fraud within Gulf Petroleum FZC. Gulf PetroleumFZC and its employees were by various ways and means defraudingand cheating various parties, including the Appellant

18. The Respondent Bank sent a letter to the Master of the Vesselmarking a copy to P&I Club and the registered owners stating that nopayment had been received by the Respondent Bank on the due datewhich is 60 days after delivery of the cargo. The cargo should thereforenot be discharged without the consent of the Respondent Bank. However,by this time the cargo had already been discharged and delivered on thebasis of instructions given by Gulf Petroleum FZC to Chevron.

19. In October 2020, there were news reports that anothercompany, Gulf Petrol Supplies LLC had filed criminal proceedings against AB

C

D

E

F

G

H

AGulf Petroleum FZC making allegations of fraud in relation to contractsfor refined product cargoes, including fuel oil. It was alleged that GulfPetroleum FZC had fabricated several contracts for supply of petroleumproducts to Gulf Petrol Supplies LLC and had issued fraudulent/fakeinvoices.

B20. On 8[th] March 2021, the Respondent Bank instituted theAdmiralty Suit being C.S. (Commercial Division) No. 96 of 2021 beforethe Commercial Division of the Madras High Court.

21. In the plaint filed in the said Admiralty suit, the RespondentBank pleaded the following:- C

“7. The Plaintiff submits that its claim in the present suit arisesunder a Bill of Lading and is for mis-delivery of cargo. Theclaim is a maritime claim under section 4(1)(f) of the Admiralty(Jurisdiction and Settlement of Maritime Claims) Act, 2017(hereinafter referred to as the said Act). The claim is againstDthe owners of the Defendant vessel. The Defendant vessel iswithin the territorial jurisdiction of this Hon’ble Court. Inthe circumstances the Plaintiff is entitled to file the presentSuit in rem against the Defendant vessel and entitled to anorder of arrest of the Defendant vessel in respect of itsmaritime claim.

E

8. The Plaintiff is the lawful holder of the original Bill ofLading no. 21052020/01 dated 21[st] May 2020 issued by theowner of the Defendant vessel for carriage of 27,132.411MTs of marine fuel from Kandla to Singapore.

F9. The central issue in the present suit is that the owner of theDefendant vessel has unlawfully and in breach of itsobligations misdelivered cargo belonging to the Plaintiff tosomeone else, without production of the original bill of lading.The Defendant vessel and or its owner is therefore, liable tothe Plaintiff for the tort of conversion. The Plaintiff is entitledGto be compensated for its loss. The liability of the Defendantvessel is established once the Plaintiff demonstrates that itcontinues to be the lawful holder of the original bill of ladingand that the Defendant vessel has unlawfully delivered thecargo to someone else. However, it may be useful to providesome background.

H

10. On 8[th] May 2020, one Gulf Petrochem FZC (“GP”)approached the Plaintiff seeking financing for a transactionof purchase of fuel from Indian Oil Corporation Ltd.(“IOCL”) and onward sale of marine fuel to Aramco TradingFujairah FZE (“Aramco”). The proposed transaction was asfollows :

a. GP would buy marine fuel from IOCL at USD 220.5880per MT.

b. GP would sell on the marine fuel to Armco at USD 246.726per MT

c. The load port for the cargo would be Kandla and thedischarge port would be Fujairah

d. The Plaintiff would finance the purchase of the fuel byGP from IOCL by way of letter of credit so as to enableGP to procure the cargo and sell it onward to Aramco.The purchase price for the onward sale would be remittedby Aramco into GP’s bank account maintained with thePlaintiff.

11. The payment terms under the sale by GP to Aramco wereto be on open credit given that Aramco was an Oil Major.In other words, the Plaintiff would rely on the name ofAramco as having never defaulted as security for paymentdue from them. The relevant payment terms expressed inthe contract stated:

“THE PAYMENT SHOULD BE MADE WITHIN 60 (SIXTY)CALENDAR DAYS FROM THE DATE OF INVOICE(INVOICE DATE = DAY 0) AGAINST PRESENTATION OFTHE SELLER’S INVOICE AND COQ [Certificate ofQuality].”

12. The understanding between the parties in relation to thisaspect of security, was as follows:

a. It was agreed that the original Bill of Ladingrepresenting the cargo would be issued by theshipowner to the order of the Plaintiff. The title/property in the cargo of fuel financed and paid for bythe Plaintiff would vest with the Plaintiff A

B

C

D

E

F

G

H

A

B

C

D

E

G

H

b. Independent of the obligation to pay from Aramco, thePlaintiff would remain the lawful holder of the originalBill of Lading and would be entitled to delivery of thecargo thereunder., the security for the Plaintiff’s claimwas the cargo, i.e., the fuel itself. However, until thePlaintiff received confirmation of the onward sale ofAramco, the title/property in the cargo of fuel wouldvest with the Plaintiff by virtue of being the lawfulholder of the original Bill of Lading.

11. Further emails were exchanged between GP and thePlaintiff on the above proposed transaction. GP had, on8 May 2020, provided to the Plaintiff the contract betweenit (as buyer) and IOCL (as seller). On 12 May 2020, onthe basis of the above understanding, the Plaintiff openedthe Letter of Credit in IOCL’s favour. There were someamendments to the contract between GP and Aramco, asregards the discharge port – it was changed from Fujairahto Singapore. This was conveyed by GP to the Plaintiff on17 May 2020. The corresponding amendment in the letterof credit was carried out by the Plaintiff on 18 May 2020.

***

13. The relevant documents such as the bill of lading,commercial invoice etc. were negotiated by IOCL underthe letter of credit opened by the Plaintiff. The Plaintiffaccordingly made payment to IOCL as per the financialagreement with GP. The bill of lading was to the order ofthe Plaintiff. By reason of the bill of lading being madeout to order and being the lawful holder of the bill oflading, the Plaintiff acquired rights of suit against theDefendant vessel in respect of the goods, pending furtheronward endorsement.

14. The Plaintiff was concerned, when, even as 10 August2020 (i.e., the deadline for Aramco to make payment forthe Cargo) was fast approaching, there was no updateabout any such payment nor was there any news of thestatus of the Cargo. This is in spite of the fact that, byvirtue of being in possession of the original bill of lading,

it would have rights of suit against the Defendant vesselif any mischief had been engaged in respect of the Cargo.

***

17. It now appears that the Defendant vessel has deliveredthe Cargo to Aramco or an unknown third party, on orabout 10 August 2020, without insisting on production ofthe original bill of lading. An invoice was raised on 11June 2020, by GP on Aramco for the amount of USD6,705,357.38 (approx INR 49,07,04,087.89 (Forty-NineCrore, Seven Lakh, Four Thousand and Eighty Seven only)(CALCULATED AT 1 USD=73 INR). The Plaintiff learntabout this subsequently when in the course of a fraudinvestigation against GP.”

22. On 9[th] March 2021, the Commercial Division of Madras HighCourt (Single Bench) passed an ex parte order of arrest of the Vessel.Thereafter, on 26[th] March 2021, the Respondent Bank filed an ApplicationNo.1494 of 2021 in the said Admiralty suit, for summary judgment underOrder XIV Rule 8 and Order XIIIA of the Civil Procedure Code 1908,as amended by the Commercial Courts Act 2015 (hereinafter referredto as “Commercial Courts Act”).

23. Pursuant to orders passed by the Commercial Division (SingleBench) of the Madras High Court, on an application made by theAppellant, the Appellant furnished a Bank Guarantee to secure the claimof the Respondent Bank. Thereafter, on 6[th] July 2021, the CommercialDivision of the High Court passed an order vacating the order of arrestof the vessel and allowing the Vessel to sail out.

24. On 16[th] July 2021, the Appellant filed its response to the interimapplication being Application No.1494 of 2021, filed by the RespondentBank for summary judgment under Order XIV Rule 8 and Order XIIAof the Code of Civil Procedure as amended by the Commercial CourtsAct. In its response/Counter-Affidavit, the Appellant pleaded:- “(k) The Plaintiff’s customer Gulf Petrochem who is allegedto have cheated and defrauded the Plaintiff and providedthe Plaintiff with false and fraudulent documents on the basisof which credit was granted by the Plaintiff, is a necessaryand/or proper party whose presence is necessary to effectivelyadjudicate the issues that arise in the suit. Whether the A

BC

D

E

F

G

H

14SUPREME COURT REPORTS

Plaintiff has been paid any amounts by Gulf Petrochem is anissue that can only be gone into at trial and requires thepresence of Gulf Petrochem...”

A

25. On 13[th] August 2021, the Respondent Bank filed its RejoinderAffidavit to the aforementioned Application No.1494 of 2021 for summaryBjudgment. After hearing the respective parties and after considering thedocuments on record, the Commercial Division of the High Court (SingleBench) passed an order dated 24[th] September 2021 directing theRespondent Bank to take necessary steps to implead Gulf PetroleumFZC as a necessary and proper party to the suit.

C26. The Single Bench observed and held:- “6. In the written statement and the common counter filed bythe Vessel owner/the sole defendant, it is specifically statedthat on the instructions, the goods were delivered at SingaporePort based on the delivery order issued by the customer ofDthe plaintiff. In such circumstances, the original Bill of Ladingis not required. Acting upon the e-mail communication dated21.05.2020 by the Gulf Petrochem, the customer of theplaintiff, the defendant delivered the cargo at Singapore. Theplaintiff is the financier to GP and the defendant is the carrierfor GP. The plaintiff is not the owner of the cargo. Hence theEsuit has to be dismissed for non-joinder and mis joinder ofthe party. If at all the plaintiff have any money claim, it has toproceed against its customer Gulf Petrochem (GP) for breachof contract and not a suit for maritime claim. The suit againstthe carrier as if it is a maritime claim is abuse of law.

D

7. Heard. Records perused.

D

7. Heard. Records perused.

8. In the suit transaction, the Gulf Petrochem (GP), who isthe customer of the plaintiff, is the key player on whoseinstructions, the goods have been delivered at Singapore bythe defendant. IOCL has sold marine fuel to GP based on theLC issued by the plaintiff for USD 6,050,000. GP has engagedthe defendant to transport cargo. As per the Bill of Lading,the cargo is supposed to be delivered at Singapore. Thedefendant has discharged the cargo at Singapore Port basedon the letter of indemnity dated 24.05.2020 given by ProfitableWealth INC, Singapore. In the documentary credit opening G

H

(LC) dated 12.05.2020 originated from the plaintiff there is aclause which indicates cargo can be delivered on obtainingindemnity in case of temporary non availability of originalBill of Lading.

9. From the documents and the facts pleaded, this Court is ofthe view that Gulf Petrochem (GP) who is the customer of theplaintiff, is the proper and necessary party in the suit. Unlessthe plaintiff impleads GP as a party, the suit cannot beadjudicated to render proper justice.”

27. The Respondent Bank filed an appeal being OSA (CAD) No.88of 2021, against the said order dated 24[th] September 2021, in theCommercial Appellate Division of the High Court (Division Bench), underSection 13(1) of the Commercial Courts Act 2015. By the judgment andorder dated 28[th] October 2021 impugned in this appeal, the CommercialAppellate Division of the High Court (Division Bench) allowed the appealand set aside the judgment and order of the Single Bench (CommercialDivision), imposing costs of Rs.1,50,000/- on the Appellant. Thepreliminary objection raised by the Appellant, to the maintainability ofthe appeal, was rejected.

28. After recording the submissions of the parties, the DivisionBench, observed and held:

“12. Indeed, the order impugned is spread over eightparagraphs. The first five are the preliminary paragraphs. Atthe sixth paragraph, it is recorded that the sole defendantdelivered the goods at Singapore based on a delivery orderapparently issued by the customer of the plaintiff and thedefendant apparently acted on the basis of an e-mail of May21, 2020 issued by Gulf Petrochem. The trial court recordedthe defendant’s contention that the plaintiff had financed thetransaction and that the plaintiff was not the owner of thecargo and since the owner of the cargo was Gulf Petrochemwhich had not been impleaded, the suit was liable to bedismissed.

13. Upon noting such contention, the trial court concludedas follows in the only paragraph in support of the order:

“8. In the suit transaction, the Gulf Petrochem (GP), who isthe customer of the plaintiff, is the key player on whose A

BCDE

F

G

H

A

B

C

D

E

F

G

H

instruction, the goods have been delivered at Singapore bythe defendant. IOCL has sold marine fuel to GP based on theLC issued by the plaintiff for USD 6,050,000. GP has engagedthe defendant to transport the cargo. As per the Bill of Lading,the cargo is supposed to be delivered at Singapore. Thedefendant has discharged the cargo at Singapore Port basedon the letter of indemnity dated 24.05.2020 given by ProfitableWealth Inc. Singapore. In the documentary credit opening (LC)dated 12.05.2020 originated from the plaintiff there is aclause which indicates cargo can be delivered on obtainingindemnity in case of temporary non availability of originalBill of Lading.”

***

***

18. The matter falls within a very short compass. The primarydocument is not disputed. The plaintiff is the named consigneein the bill of lading and it is also accepted by the defendant,in particular, that ordinarily it would be the consignee whowould be entitled to obtain delivery of the goods covered bya bill of lading. In this case, it may also be noticed that GulfPetrochem is the notify party mentioned in the bill of lading.In international trade, documents are of immense value andcourts must proceed on the basis of the letter of the documentswithout seeking to ascertain the nature of the underlying orany incidental transaction. If it is imperative that a carriernotifies the party indicated as the notify party, what it impliesis that notice of the arrival of the vessel or the notice ofreadiness to discharge cargo must be given to such partywhereupon such party would produce the bill of lading andobtain the discharge of the cargo. It is also possible that theconsignee may authorise the carrier to release the cargo infavour of the notify party or to any other as the consignee isentitled to assign its right to obtain delivery under the bill oflading to any party of the consignee’s choice.

19. What is of paramount importance is that it is the consigneeand the consignee alone which can issue instructions orauthorise the delivery of the goods covered by the bill of ladingto any third party. The carrier is not obliged to act as per the

directions or instructions of any third party as the bill of lading,in a sense, is the document of title pertaining to the cargoand it is elementary that it is only the owner of the goods whohas the right to alienate the goods or transfer the same.

20. Implicit in the letter of May 24, 2020 issued by ProfitableWealth Inc. was that such entity required the carrier to dosomething unusual or out of the ordinary, and, as such,exposing the carrier to a risk in course of such deviation. Asa consequence, to induce the carrier to deviate from the usualpractice, Profitable Wealth Inc. indemnified the carrierharmless against any claim that may be made against thecarrier for the carrier acting according to the instructions ofProfitable Wealth Inc. The plaintiff had nothing to do withProfitable Wealth Inc. or any instructions that profitableWealth Inc. or Gulf Petrochem or even the Maharaja ofGaipajama may have issued to the carrier. These instructions,whether issued by Gulf Petrochem or Profitable Wealth Inc.,were not backed by any authority of the plaintiff. In suchcircumstances, what the arrangement between the defendantand the third parties may have been may not be of anyrelevance in the suit and in the context of the plaintiff’s claimherein.

21. As to the averments in paragraphs 10 to 12 of the plaint,it is sometimes better not to say too much. However, theaverments may be seen as part of a narrative leading up tothe claim of the plaintiff and the plaintiff’s cause of actionagainst the defendant. In the scheme of the action and theparticular claim of the plaintiff as the consignee in the bill oflading against the defendant carrier, the transactions betweenthe plaintiff and Gulf petrochem or those between GulfPetrochem and Indian Oil Corporation or even that betweenGulf Petrochem and Aramco are of no relevance. Till suchtime that the plaintiff’s name appeared as the consignee inthe bill of lading, the defendant was obliged only to the plaintiffto deliver the goods to the plaintiff or to the order of theplaintiff and the defendant, in acting on the basis ofinstructions issued by others may not have affected the rightof the plaintiff or the plaintiff’s claim under the bill of lading.

A

BCD

E

F

G

H

A

BCD

E

F

G

H

A22. In such circumstances, Gulf Petrochem Inc., which mayhave been financed by the plaintiff qua the subject transactionis neither a necessary nor a proper party to the plaintiff’ssimple claim against the carrier of the goods for the breachof the contract of carriage and in the carrier’s failure todeliver the goods to the plaintiff or to the order of the plaintiff.BIt is not unusual in the industry for goods to be released atthe request of a stranger, but that is precisely why the strangerindemnifies the carrier. It is more likely than not that the entitythat induced the defendant to discharge the goods inSingapore may be beyond the defendant’s reach; but that mayCnot be an excuse to resist the plaintiff’s claim. It is equallypossible that the plaintiff may have acquiesced in the deliveryinstructions issued by Profitable Wealth Inc., but when theplaintiff has not, it is only the indemnity furnished by the entitythat the defendant can chase.

A

23. The observations made herein must be understood to bein the context of what was required to be considered andshould not unduly weigh with the trial court in course of theexpeditious disposal of the application for summary judgmentthat the plaintiff has filed.

D

E24. The order impugned dated September 24, 2021 is set aside.The trial court is requested to take up the application forsummary judgment and disposal of the same in accordancewith law as expeditiously as the business of the trial courtpermits. OSA (CAD) No.88 of 2021 is allowed as above. Thedefendant will pay costs assessed at Rs.1,50,000/- CMPFNo.16921 of 2021 is closed.”

E

29. There is no doubt that in international trade, documents are ofimmense value and that Courts must proceed on the basis of thedocuments as held by the Division Bench. It is, however, difficult toaccept that the Court is not required to ascertain the nature of theGunderlying transaction. The Division Bench rightly noted that when acarrier notifies the party indicated as the ‘notify party’, what it implies isthat notice of the arrival of the vessel or notice of readiness to dischargecargo must be given to such party, whereupon such party would producethe Bill of Lading and obtain the discharge of the cargo.

H

30. The law governing bills of lading is a combination of mandatoryinternational rules and rules of common law, while charterparties aregoverned entirely by the common law.

31. The International Convention for the Unification of CertainRules of Law relating to Bills of Lading framed in 1924, and known asthe Hague Rules, govern the liability of carriers in respect of cargo,covered by bills of lading. The Hague Rules, which are mandatory, imposecertain non-derogable obligations on the shipowner, but in return, conferan extensive list of immunities, a defence of limitation of liability and ashort time limit for the bringing of claims.

32. In 1968, the Hague-Visby Rules introduced a modified versionof the Hague Rules, including amendments. The Hague-Visby Rulesare enacted into English law by the Carriage of Goods by Sea Act, 1971.The Hague/Hague Visby Rules were widely adopted internationally.

33. In 1978, the United Nations conducted a Convention on theCarriage of Goods by Sea. The Rules which emerged in the convention,which are known as Hamburg Rules, came into force in 1992. However,the rules were not accepted by major trading nations of the world.

34. There was an attempt to replace the Hague/Hague-Visbysettlement, by for the adoption in 2008 of the United Nations Conventionon Contracts for the International Carriage of Goods Wholly or Partlyby Sea, which is known as the Rotterdam Rules. Rotterdam Rules havealso not been uniformly implemented.

35. In modern English law, Bills of Lading are governed by theHague-Visby Rules with respect to the matters addressed by the Rulesand otherwise by rules of common law.

36. A Bill of Lading is a type of transport document that may beused in respect of the carriage of goods by sea or on behalf of owner, orless commonly the charterer of the carrying ship. Bills of Lading arecommonly used when a vessel is employed as a general ship, being putup for a particular voyage to carry the goods of any person.

37. A Bill of Lading serves as a receipt for the goods entrusted tothe carrier in respect of both the quantity and the condition of the goodsreceived.

38. A Bill of Lading serves also as evidence of the terms of thecontract of affreightment. As between the immediate parties to that A

B

C

D

E

F

G

H

Acontract, namely the carrier and the shipper, the evidence provided bythe bill is not conclusive and may be supplemented or even overriddenby extraneous evidence. Once the bill has been transferred however,the bill provides conclusive evidence as between the carrier and thenew holder, as to the terms of the contract of affreightment. In thissense the bill may be said to “contain” the contract.B

39. Finally, the Hague-Visby Rules, to which effect is given inEnglish law by the Carriage of Goods by Sea Act 1971, apply as a matterof law to contracts of carriage “covered by a bill of lading or any similardocument of title”. That a contract of affreightment contemplates theissuing of a Bill of Lading serves, therefore, to attract the application ofCthe Hague-Visby Rules.

40. Carver on Bills of Lading (2005) says, a bill of lading is adocument issued by or on behalf of a carrier of goods by sea to theperson, (usually known as the shipper) with whom he has contracted forthe carriage of goods.D

41. Scrutton on Charterparties and Bills of Lading (1984) saysthat “the Bill of Lading is not the contract, for that has been made beforethe Bill of Lading was signed and delivered, but it is excellent evidenceof the terms of contract and in the hands of an endorsee, is the onlyevidence.”E

42. Three common characteristics of a Bill of Lading are (i) itconstitutes a receipt for the goods shipped or received by the carrier; (b)it constitutes a document of title for such goods; and (iii) it contains orevidences the contract of carriage by sea relating to the goods.

F43. There is no universally accepted definition of bill of lading. Toquote Sir Richard Aikens “Bills of Lading” (2006), “Like an elephant, aBill of Lading is generally easier to recognize than to define”.

44. The Preamble to the Bills of Lading Act does not define a Billof Lading but mentions Bill of Lading. The Preamble reads “whereas bythe custom of merchants a Bill of Lading of goods being transferable byGendorsement of property in the goods may thereby pass to the endoresee,but nevertheless all rights in respect of the contract contained in the Billof Lading continue in the original shipper or owner, and it is expedientthat such rights should pass with the property; it frequently happens thatthe goods in respect of which Bill of Lading purport to be signed haveHnot been laden on board, and it is proper that such Bills of Lading in the

hands of a bona fide holder for value should not be questioned by theMaster or other person signing the same on the ground of the goods nothaving been laden as aforesaid; it is enacted as follows”:- Though thereis no definition of the Bill of Lading but the concept of it is clear.

45. Delivery of goods covered by a Bill of Lading are ordinarily tobe made on presentation of the bill. The Carrier may be liable to theperson lawfully in possession of such a Bill, if he wrongly delivers thegoods to anyone else. Whether the delivery of the goods to anyone otherthan the holder of the Bill of Lading, is wrongful or not, would depend onthe facts and circumstances of the case.

46. As observed in Cho Yang Shipping Co. Ltd. v. Coral (UK)Ltd.[1], the Bill of Lading is not a contract but it is excellent evidence ofthe terms of the contracts. It is open to the shipper to adduce oral evidenceto show the true terms of the contract.

47. As observed by the Division Bench, in the judgment and orderimpugned in this appeal, it is also possible that the consignee may authorisethe carrier to release the cargo in favour of the notify party or to anyother party. Whether the consignee authorised release of the cargo infavour of the notify party or any other party, can effectively be adjudicatedin the presence of Gulf Petrochem, shown as the notify party in the Billof Lading.

48. Even assuming that the consignee alone can issue instructionsor authorise delivery of the goods covered by the Bill of Lading, to anythird party, as observed by the Division Bench, the question of whetherthe consignee had issued any instructions authorising delivery of thegoods covered by the Bill of Lading to Chevron can also be effectivelyadjudged in the presence of the notify party.

49. On a reading of averments made in the plaint and, in particular,paragraphs 10 to 12 to which reference has been made in the impugnedjudgment and order, it cannot be said that Gulf Petrochem, the owner ofthe cargo financed by the Respondent Bank, and the notify party whohad admittedly been communicating with the Respondent Bank as alsothe carrier and others, was a complete stranger to the proceedings.

50. The consignee named in the Bill of Lading, need not necessarilybe the owner of the cargo. Whether the Respondent Bank had anything 1 (1997) 2 Lloyd’s Rep 641

A

B

C

D

E

F

G

H

Ato do with any instruction that Gulf Petrochem might have given is to bedecided in the suit. It is perhaps preposterous to equate the instructionsthat might be given by Gulf Petrochem, to instructions that might begiven by the fictitious Maharaja of Gaipajama.

51. Having noted the averments made in paragraph 10 to 12 ofBthe plaint and commented “better not to say too much” it is difficult tounderstand how the Division Bench could have imposed costs ofRs.1,50,000/- on the Appellant, who had not even made any formalapplication for addition of Gulf Petrochem as party.

52. In our view, the Division Bench erred in holding that GulfCPetrochem was neither a necessary nor a proper party to the admiraltysuit. Gulf Petrochem was a proper party, whose presence, as observedabove, was necessary for effective adjudication of the issue in the suit.

53. An important question of law involved in these appeals is,whether an appeal lies to the Commercial Appellate Division of the HighDCourt from an order of the Commercial Division (Single Bench) of thesame High Court for addition of a party, in an Admiralty Suit governedby the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act,2017, hereinafter referred to as “the Admiralty Act”.

54. If it is held that, an order in an Admiralty Suit, for addition ofEparty, passed by the Commercial Division of the High Court, is appealableto the Commercial Appellate Division, the question which would followis, whether the Commercial Appellate Division of the High Court (DivisionBench) should have allowed the appeal and set aside the order of theCommercial Division (Single Bench) adding Gulf Petroleum FZC asdefendant in the suit?F55. The relevant provisions of the Admiralty Act, which governsthe above suit are as follows:

“3. Admiralty jurisdictions— (1) Subject to the provisions ofSections 4 and 5, the jurisdiction in respect of all maritimeclaims under this Act shall vest in the respective High CourtsGand be exercisable over the waters up to and including theterritorial waters of their respective jurisdictions inaccordance with the provisions contained in this Act:

Provided that the Central Government may, by notification,extend the jurisdiction of the High Court up to the limit as H

defined in Section 2 of the Territorial Waters, ContinentalShelf, Exclusive Economic Zone and Other Maritime ZonesAct, 1976(80 of 1976).

4. Maritime claim.- (1) The High Court may exercisejurisdiction to hear and determine any question on a maritimeclaim, against any vessel, arising out of any—

***

(g) agreement relating to the carriage of goods or passengerson board a vessel, whether contained in a charter party orotherwise;

5. Arrest of vessel in rem. -(1) The High Court may orderarrest of any vessel which is within its jurisdiction for thepurpose of providing security against a maritime claim whichis the subject of an admiralty proceeding, where the courthas reason to believe that—

(a) the person who owned the vessel at the time when themaritime claim arose is liable for the claim and is the ownerof the vessel when the arrest is effected; or (b) the demise charterer of the vessel at the time when themaritime claim arose is liable for the claim and is the demisecharterer or the owner of the vessel when the arrest iseffected; or ***

(2) The High Court may also order arrest of any other vesselfor the purpose of providing security against a maritime claim,in lieu of the vessel against which a maritime claim has beenmade under this Act, subject to the provisions of sub-section (1):

Provided that no vessel shall be arrested under this sub-sectionin respect of a maritime claim under clause (a) of sub-section (1) of section 4.

6. Admiralty jurisdiction in personam.- Subject to Section 7,the High Court may exercise admiralty jurisdiction by action inpersonam in respect of any maritime claim referred to inclauses (a) to (w) of sub-section (1) of section 4.

xxxxx

A

B

C

D

E

F

G

H

12. Application of Code of Civil Procedure.- The provisionsof the Code of Civil Procedure, 1908 (5 of 1908) shall applyin all the proceedings before the High Court in so far as theyare not inconsistent with or contrary to the provisions of thisAct or the rules made thereunder.

A

xxxxx

B

14. Appeal.- Notwithstanding anything contained in any otherlaw for the time being in force, an appeal shall lie from anyjudgment, decree or final order or interim order of a singleJudge of the High Court under this Act to a Division BenchCof the High Court.”

56. In view of Section 12 of the Admiralty Act, referred to above,the provisions of the Code of Civil Procedure 1908, hereinafter referredto as CPC shall apply to all proceedings before the High Court, underthe Admiralty Act, insofar as they are not inconsistent with, or contraryDto the provisions of the Admiralty Act or any rule made thereunder.

57. Order 1 Rule 10(2) of the CPC provides:

“Court may strike out or add parties.—The Court may at anystage of the proceedings, either upon or without theapplication of either party, and on such terms as may appearEto the Court to be just, order that the name of any partyimproperly joined, whether as plaintiff or defendant, be struckout, and that the name of any person who ought to have beenjoined, whether as plaintiff or defendant, or whose presencebefore the Court may be necessary in order to enable theFCourt effectually and completely to adjudicate upon and settleall the questions involved in the suit, be added.”

E

58. There being no inconsistency between Order 1 Rule 10(2)and any provision of the Admiralty Act, Order 1 Rule 10(2) of the CPCwould be applicable to suits and/or proceedings governed by the AdmiraltyAct. Order 1 Rule 10 (2) enables the Court to add any person as party atany stage of the proceedings, on its own, irrespective of whether thereis any application before it, if the Court deems it necessary to do so, toenable the Court to effectively and completely adjudicate and settle allquestions involved in the suit. One of the objects of Order I Rule 10(2) isto avoid multiplicity of proceedings.

G

H

59. The Commercial Courts Act, 2015, has, as per its preamblebeen enacted to provide for the constitution of Commercial Courts,Commercial Appellate Courts, and for Commercial Division andCommercial Appellate Division in the High Courts, for adjudicatingcommercial disputes of specified value and matters connected therewithor incidental thereto.

60. ‘Commercial dispute’ has been defined in Section 2(c) of theCommercial Courts Act to include issues relating to admiralty andmaritime laws. Sections 7, 13, 14, 16 and 21 of the Commercial CourtsAct, relevant to the issues involved in this Appeal, are set out hereinbelow:

“7. Jurisdiction of Commercial Divisions of High Courts.—All suits and applications relating to commercial disputes ofa Specified Value filed in a High Court having ordinaryoriginal civil jurisdiction shall be heard and disposed of bythe Commercial Division of that High Court:

Provided that all suits and applications relating to commercialdisputes, stipulated by an Act to lie in a court not inferior toa District Court, and filed or pending on the original side ofthe High Court, shall be heard and disposed of by theCommercial Division of the High Court:

Provided further that all suits and applications transferredto the High Court by virtue of sub-section (4) of Section 22of the Designs Act, 2000 (16 of 2000) or Section 104 of thePatents Act, 1970 (39 of 1970) shall be heard and disposedof by the Commercial Division of the High Court in all theareas over which the High Court exercises ordinary originalcivil jurisdiction.

13. Appeals from decrees of Commercial Courts andCommercial Divisions.—20[(1) Any person aggrieved by thejudgment or order of a Commercial Court below the level ofa District Judge may appeal to the Commercial AppellateCourt within a period of sixty days from the date of judgmentor order.

(1-A) Any person aggrieved by the judgment or order of aCommercial Court at the level of District Judge exercisingoriginal civil jurisdiction or, as the case may be, CommercialDivision of a High Court may appeal to the Commercial A

B

C

D

EF

G

H

A

B

C

D

E

F

G

H

[2022] 10 S.C.R.

Appellate Division of that High Court within a period of sixtydays from the date of the judgment or order:

Provided that an appeal shall lie from such orders passed bya Commercial Division or a Commercial Court that arespecifically enumerated under Order XLIII of the Code ofCivil Procedure, 1908 (5 of 1908) as amended by this Actand Section 37 of the Arbitration and Conciliation Act, 1996(26 of 1996).]

(2) Notwithstanding anything contained in any other law forthe time being in force or Letters Patent of a High Court, noappeal shall lie from any order or decree of a CommercialDivision or Commercial Court otherwise than in accordancewith the provisions of this Act.

14. Expeditious disposal of appeals.—The CommercialAppellate Court and the Commercial Appellate Division shallendeavour to dispose of appeals filed before it within a periodof six months from the date of filing of such appeal.

xxxxx

16. Amendments to the Code of Civil Procedure, 1908 in itsapplication to commercial disputes.—(1) The provisions ofthe Code of Civil Procedure, 1908 (5 of 1908) shall, in theirapplication to any suit in respect of a commercial dispute of aSpecified Value, stand amended in the manner as specified inthe Schedule.

(2) The Commercial Division and Commercial Court shallfollow the provisions of the Code of Civil Procedure, 1908 (5of 1908), as amended by this Act, in the trial of a suit inrespect of a commercial dispute of a specified value.

(3) Where any provision of any Rule of the jurisdictional HighCourt or any amendment to the Code of Civil Procedure, 1908(5 of 1908), by the State Government is in conflict with theprovisions of the Code of Civil Procedure, 1908 (5 of 1908),as amended by this Act, the provisions of the Code of CivilProcedure as amended by this Act shall prevail.

21. Act to have overriding effect.—Save as otherwise provided,the provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other lawfor the time being in force or in any instrument having effectby virtue of any law for the time being in force other than thisAct.”

61. As observed above, Section 12 of the Admiralty Act appliesthe provisions of the CPC to all Admiralty proceedings in the High Court.Section 16 of the Commercial Courts Act makes it explicit that theprovisions of CPC, as amended by the Schedule to the CommercialCourts Act, applies to suits relating to commercial disputes governed bythe Commercial Courts Act.

62. There can be no doubt that the Commercial Division of theHigh Court has the power to add a party to an Admiralty suit, on its own,without any application having been made, if it is of the view that thepresence of that party before the Court may be necessary to effectivelyand completely adjudicate upon and settle all the questions involved inthe suit. The question is whether an order of the Commercial Court orthe Commercial Division of the High Court, adding a party to an AdmiraltySuit, is appealable under Section 13 of the Commercial Courts Act, readwith Section 14 of the Admiralty Act.

63. Proviso 2 of Section 13(1A) of the Commercial Courts Actrestricts intra Court appeals from the Commercial Division of a HighCourt to its Commercial Appellate Division, only to those orders of theCommercial Division, which are specifically enumerated under Order43 of the Code of Civil Procedure 1908 as amended by the CommercialCourts Act and Section 37 of the Arbitration and Conciliation Act 1996.

64. The Commercial Courts Act does not amend Order 43 Rule 1of the CPC which provides:

“1. Appeals from orders.—An appeal shall lie from thefollowing orders under the provisions of Section 104,namely:—

(a) an order under Rule 10 of Order VII returning a plaintto be presented to the proper Court except where theprocedure specified in Rule 10-A of Order VII has beenfollowed; (b)* * *

A

B

CD

E

F

G

H

A(c)an order under Rule 9 of Order IX rejecting anapplication (in a case open to appeal) for an order toset aside the dismissal of a suit; (d)an order under Rule 13 of Order IX rejecting anapplication (in a case open to appeal) for an order toBset aside a decree passed ex parte; (e)* * *

(f) an order under Rule 21 of Order XI;

(g) * * *

C

(h) * * *

(i) an order under Rule 34 of Order XXI on an objectionto the draft of a document or of an endorsement; (j)an order under Rule 72 or Rule 92 of Order XXI settingaside or refusing to set aside a sale; D

(ja) an order rejecting an application made under sub-rule(1) of Rule 106 of Order XXI, provided that an order onthe original application, that is to say, the applicationreferred to in sub-rule (1) of Rule 105 of that Order isappealable; E

(k) an order under Rule 9 of Order XXII refusing to setaside the abatement or dismissal of a suit;

(l) an order under Rule 10 of Order XXII giving or refusingto give leave;(m)* * *

F

(n) an order under Rule 2 of Order XXV rejecting anapplication (in a case open to appeal) for an order toset aside the dismissal of a suit; (na) an order under Rule 5 or Rule 7 of Order XXXIIIGrejecting an application for permission to sue as anindigent person; (o)* * *

(p) orders in interpleader-suit under Rule 3, Rule 4 or RuleH6 of Order XXXV; (q)an order under Rule 2, Rule 3 or Rule 6 of OrderAXXXVIII; (r)an order under Rule 1, Rule 2, [Rule 2-A], Rule 4 orRule 10 of Order XXXIX; (s)an order under Rule 1 or Rule 4 of Order XL; B

(t) an order of refusal under Rule 19 of Order XLI toreadmit, or under Rule 21 of Order XLI to rehear, anappeal; (u)an order under Rule 23 [or Rule 23-A] of Order XLIremanding a case, where an appeal would lie from theCdecree of the Appellate Court;

(v) [* * *]

(w) an order under Rule 4 of Order XLVII granting anapplication for review.”

D

65. Sub-section (2) of Section 13 begins with a non obstante clausegiving the said Section overriding over all other laws including the LettersPatent of the High Court. Sub-section (2) of Section 13 of the CommercialCourts Act says that no appeal shall lie from any order of a CommercialDivision or Commercial Court otherwise than in accordance with theprovisions of the Commercial Courts Act.

E

66. On the other hand, Section 14 of the Admiralty Act, whichalso starts with a non-obstante clause saying that notwithstanding anyother law for the time being in force, an appeal shall lie from any judgment,decree or final order or interim order of a Single Bench of the HighCourt under the Admiralty Act, to a Division Bench of the High Court.

F

67. Both Section 13 of the Commercial Courts Act and Section14 of the Admiralty Act contain non-obstante clauses giving the Sectionsoverriding effect. While Section 14 of the Admiralty Act which beginswith a non-obstante clause as observed, provides that notwithstandingcontained in any other law for the time being in force, an appeal shall liefrom any judgment, decree or final order or interim order under theAdmiralty Act, of a Single Judge of the High Court to a Division Benchof the High Court, Section 13(2) of the Commercial Courts Act saysnotwithstanding anything contained in any other law for the time being inforce, or the Letters Patent of the High Court, no appeal shall lie from G

H

Aany order or decree of a Commercial Division or Commercial Courtotherwise than in accordance with the provisions of the CommercialCourts Act. As stated above, the proviso restricts an appeal under theCommercial Courts Act, to such orders as are specifically enumeratedin Order 43 of the CPC.

B68. A clause with the words “notwithstanding anything containedin any other law for the time being in force” is generally appended at thebeginning of a section with a view to give the enacting part of the sectionoverriding effect in case of conflict with any other law. Ordinarily, whentwo or more statutes contain statutory provisions which start with theclause “notwithstanding anything contained in any other law for the timeCbeing in force” and those statutes contain conflicting provisions, a questionthat could arise is, which statute would prevail. As a general rule, theSpecial Statutes prevail over General Statutes. If both statutes are generalstatutes or special statutes containing identical or similar non-obstanteclauses, the later statute would prevail.

D

69. The rule that a non-obstante clause in a later statute prevailsover the non-obstante clause in an earlier statute is not an absolute rule.The question of which provision prevails, would necessarily depend onthe object of the enactment and, in particular, the object of givingoverriding effect to the enactment or any specific provision thereof.

E

70. When two or more enactments operating in the same fieldcontain a non obstante clause stating that its provisions will have effectnotwithstanding anything inconsistent therewith contained in any otherlaw, the conflict has to be resolved upon consideration of the purposeand policy underlying the enactments. Mr. Vishwanathan, learned SeniorFCounsel appearing for the Appellant, argued that Section 14 provides forappeals from an interim order of a Single Judge of a High Court underthe Admiralty Act which means an interim order in relation to an actionin rem. Once the owner of the Vessel enters appearance and submits tothe jurisdiction and provides security for release of the Vessel, theAdmiralty Action proceeds to trial as an action in personam as in anyGother suit. This view finds support from the judgment of this court inMV Elizabeth v. Harwan Investment and Trading Pvt. Ltd.[2]

71. The Statement of Objects and Reasons of the CommercialCourts Bill, 2015 indicates that the Commercial Courts Bill followed H2 1993 Supp (2) SCC 433

from “(a) proposal to provide for speedy disposal of high value commercialdisputes”, which “involves complex facts and question(s) of law”. TheStatement notes that “early resolution of commercial disputes shall createa positive image to the investor world about the independent andresponsive Indian legal system”. The Statement says that “the proposedBill shall accelerate economic growth, improve the international imageof the Indian Justice delivery system, and the faith of the investor worldin the legal culture of the nation”.

72. The Statement of Objects and Reasons for the Admiralty(Jurisdiction and Settlement of Maritime Claims) Bill, 2016 says that theBill “consolidates the existing British era laws on civil matters of Admiraltyjurisdiction of courts, Admiralty proceedings on Maritime claims, arrestof vessels and related issues, in line with modern trends in the maritimesector and in uniformity with prevalent international practices”. TheAdmiralty Bill “provides for adjudication of identified maritime claimsand, to ensure security against maritime claims, arrest of vessels in certaincircumstances”. The Bill also ‘provides for inter se priority on maritimelien.” The Statement of Objects and Reasons reiterates that CPC shallbe applicable in respect of aspects on which provisions are not laid downin the Bill.” The Bill also “deals with admiralty jurisdiction in personamand the order of priority of maritime claims.”

73. A dispute arising out of issues relating to admiralty and maritimelaw is a commercial dispute as defined in Section 2(1) (c)(iii) of theCommercial Courts Act. Section 13 of the Commercial Courts Act, whichrestricts the scope of appeals, has been interpreted by this Court inKandla Corporation v. OCI Corp.[3], to mean that orders that are notspecifically enumerated under Order XLIII of the CPC would, not beappealable.

74. This Court held:

“14.The proviso goes on to state that an appeal shall lie fromsuch orders passed by the Commercial Division of the HighCourt that are specifically enumerated under Order XLIII ofthe Code of Civil Procedure Code, 1908, section 37 of theArbitration Act. It will at once be noticed that orders that arenot specifically enumerated under Order XLIII of the CPCwould, therefore, not be appealable, and appeals that are A

BC

D

EF

G

H

[2022] 10 S.C.R.

Amentioned in Section 37 of the Arbitration Act alone areappeals that can be made to the Commercial AppellateDivision of a High Court.”

75. Mr. Vishwanathan submitted that, considering the scope ofthe Commercial Courts Act, the Madras High Court has issuedBNotification No. 48 of 2018 in exercise of the powers conferred undersection 18 of the Act, which is a practice note in relation to theCommercial Appellate Division. The Notification states “If the decisionof the Commercial Court and Commercial Division is an ‘order’, it shouldbe an order which has been specifically enumerated as an appealableorder under Order XLIII of the CPC [proviso to Section 13 of the Act 4Cof 2016]. Other than the above, even if there is an appeal provisionunder the Letters Patent of a High Court or under any law, no appealwill lie against an order or decree of a Commercial Division or CommercialCourt [Section 13(2) of Act 4 of 2016).” Incidentally the notificationwas issued by one of us, (Indira Banerjee, J.) as Chief Justice of theDMadras High Court, at the material time.

76. In Magic Frames v. Radiance Media P Ltd.[4], relied uponby Mr. Vishwanathan, the Madras High Court held that an Original SideAppeal under Section 13(1A) was not maintainable against a SingleJudge’s order, dismissing an application filed by the defendants MagicEFrames for summary judgment, seeking dismissal of the commercial suitfiled by the plaintiff, Radiance Media. The relevant paragraphs of thejudgment are reproduced herein below:- “24. Further, as per Notification No.48 of 2018 of this Court,in exercise of the power conferred under Section 18 of theFCommercial Courts, Commercial Division and CommercialAppellate Division of High Courts Act, 2015 (Act 4 of 2016),the Hon. The Chief Justice is pleased to issue the PracticeNote therein and in relation to Commercial Appellate Division,it is stated as follows:

GII. Commercial Appellate Division:Jurisdiction of Commercial Appellate Division:

1) Jurisdiction of Commercial Appellate Division is set out inthree provisions of Act 4 of 2016, i.e. section 9(2), section 13and Section 15(5).H4 2019 SCC Online Mad 38929

2) In suits relating to a Commercial Dispute (where the valueof the suit when filed is not of specified value’) in the even ofcounter claim/s by defendants/s of ‘Specified Value’) in theevent of counter claim/s by defendant/s of Specified value,such a suit shall be transferred to Commercial court or thecommercial division, as the case may be (Section 9(1) of Act4 of 2016). If such a suit is not transferred, on an applicationby any of the parties to the suit, Commercial Appellate Divisionmay withdraw such suits from the regular.

25. Therefore, from the above Notification, it is clear that theamendment to section 13(1) of the Commercial Courts Act,has no impact on the right of appeal, which was clarified inthe practice directions to be limited under Order 43 of theCPC, and section 37 of the Arbitration and Conciliation Act,1996, if it had any impact, the practice directions would havealso been amended which the Court has not done till date.”

77. The judgment in Magic Frames (supra), in the context ofdismissal of an application for summary judgment, is not attracted in thiscase, even though the finding that an order dismissing an application forsummary judgment is not appealable, is correct. However, a Notificationgiving Practice Directions can neither restrict nor expand the scope of astatutory enactment.

78. It is clear from a reading of the Admiralty Act and theCommercial Courts Act, that orders passed under the Admiralty Actpertaining to the exercise of in rem jurisdiction by the High Court are theonly orders which are appealable under section 14 of the Admiralty Act,whereas orders passed in the trial of a suit and on applications madeunder the provisions of the Code of Civil Procedure, 1908 are not ordersunder the Admiralty Act but orders under the CPC which would beappealable only if they fall under Order 43 of the CPC as provided inSection 13 of the Commercial Courts Act.

79. Both the Admiralty Act and Commercial Courts Act are SpecialActs. In Ashoka Marketing Ltd. v. Punjab National Bank[5], aConstitution Bench of this Court, after considering the law on the subjectof conflicting non-obstante clauses and inconsistency between theprovisions of the two statutes, observed in paragraph 61 that “The principle A

B

D

F

G

H

Awhich emerges from these decisions is that in the case of inconsistencybetween the provisions of the two enactments, both of which can beregarded as special in nature, the conflict has to be resolved by referenceto the purpose and policy underlying the two enactments and the clearintendment conveyed by the language of the relevant provisionstherein.…”B

80. Even assuming that the Commercial Courts Act provisionsare considered to be general provisions relating to appeals, whilst theprovisions in the Admiralty Act are considered to be special provisionfor appeal, then too the maxim Generalia Specialibus Non Derogant,which is ordinarily attracted where there is a conflict between a specialCand a general statute, would not apply. “If it appears from a considerationof the general enactment, in the light of admissible circumstances, thatParliament’s true intention was to establish thereby a rule of a universalapplication, then the special provision must give way to the general”. InCTO vs. Binani Cements[6], this Court held:-D

“34. It is well established that when a General Law and aspecial law dealing with some aspect dealt with by the generallaw are in question, the rule adopted and applied is one ofharmonious construction whereby the general law, to the extentdealt with by the special law, is impliedly repealed. ThisEprinciple finds its origins in the latin maxim of generaliaspecialibus non derogant, i.e., general law yields to speciallaw should they operate in the same field on same subject.(Vepa P. Sarathi, Interpretation of Statutes, 5th Ed., EasternBook Company; N. S. Bindra’s Interpretation of Statutes, 8thEd., The Law Book Company; Craies on Statute Law,FS.G.G.Edkar, 7th Ed., Sweet & Maxwell; Justice G.P. Singh,Principles of Statutory Interpretation, 13th Ed., LexisNexis;Craies on Legislation, Daniel Greenberg, 9th Ed., ThomsonSweet & Maxwell, Maxwell on Interpretation of Statutes, 12thEd., Lexis Nexis)G35. Generally, the principle has found vast application incases of there being two statutes: general or specific with thelatter treating the common subject matter more specifically orminutely than the former. Corpus Juris Secundum, 82 C.J.S.Statutes § 482 states that when construing a general and a H6 2014 SCC Online SC 140

H6 2014 SCC Online SC 140

specific statute pertaining to the same topic, it is necessary toconsider the statutes as consistent with one another and suchstatutes therefore should be harmonized, if possible, with theobjective of giving effect to a consistent legislative policy.On the other hand, where a general statute and a specificstatute relating to the same subject matter cannot be reconciled,the special or specific statute ordinarily will control. Theprovision more specifically directed to the matter at issueprevails as an exception to or qualification of the provisionwhich is more general in nature, provided that the specific orspecial statute clearly includes the matter in controversy.(Edmond v. U.S., 520 U.S. 651, Warden v. Marrero, 417 U.S.653)

36. The maxim generalia specialibus non derogant is dealtwith in Volume 44 (1) of the 4th ed. of Halsbury’s Laws ofEngland at paragraph 1300 as follows:

“The principle descends clearly from decisions of the Houseof Lords in Seward v. Owner of “The Vera Cruz”, (1884) 10App Gas 59 and the Privy Council in Barker v Edger, (1898)AC 748 and has been affirmed and put into effect on manyoccasions .... If Parliament has considered all thecircumstances of, and made special provision for, a particularcase, the· presumption is that a subsequent enactment of apurely general character would not have been intended tointerfere with that provision; and therefore, if such anenactment, although inconsistent in substance, is capable ofreasonable and sensible application without extending to thecase in question, it is prima facie to be construed as not soextending. The special provision stands as an exceptionalproviso upon the general. If, however, it appears from aconsideration of the general enactment in the light ofadmissible circumstances that Parliament’s true intention wasto establish thereby a rule of universal application, then thespecial provision must give way to the general.”

81. If such an order under the Code of Civil Procedure whichdoes not fall under Order XLIII of CPC is held to be appealable, thenthe entire purpose of the Commercial Courts Act would be defeated,and every single order passed in a course of a trial of an admiralty suit ABC

D

EFG

H

Awould be appealable under section 14 of the Act. Such orders would belarge in number including orders in relation to discovery, inspection, casemanagement hearing, admissibility of evidence, framing of issues,interrogatories, etc. This would make a mockery of the intended purposeof Parliament in enacting the Commercial Courts Act, which is to expeditetrials in commercial suits of a specified value, and restrict the number ofBinterlocutory appeals.

82. This Court is of the view that an order for addition of a partyunder Order 1 Rule 10(2) of the CPC is not appealable under section 14of the Admiralty Act. Gulf Petrochem is a party to the dispute and thesuit transaction and the Contract of Carriage (Bill of Lading) and henceCis a necessary party. Gulf Petrochem is also a proper party whosepresence is necessary for complete and final decision on questions inthe suit. In Anil Kumar Singh vs. Shivnath Mishra[7], this Court held:

“10. A person may be added as a party defendant to the suitthough no relief may be claimed against him/her providedDhis/her presence is necessary for a complete and final decisionon the question involved in the suit. Such a person is only aproper party as distinguished from a necessary party .... “

83. The pleadings in Paragraphs 10 to 12 of the Plaint [Page 264]which are extracted in the Impugned Judgement at Page 11-13Edemonstrate that Gulf Petrochem is a proper and necessary party eventhough the Respondent may choose not to claim any reliefs against themin the present Suit.

84. Section 14 of the Admiralty Act, as argued byMr. Vishwanathan, provides the fora for an appeal from any judgment,Fdecree, final order or interim order of a Single Judge of the High Courtunder the Admiralty Act to a Division Bench of the High Court. Theexpression “any interim order” has to be read harmoniously with Order43, Rule 1 of the Code of Civil Procedure in view of Section 12 of theAdmiralty Act read with Section 13 of the Commercial Courts Actreferred to above.G

85. It is not the intent of the overriding provision of Section 14 tonullify Section 12 of the Admiralty Act. Section 12 of the Admiralty Actapplies to all proceedings in the High Court whether they be originalproceedings or appellate proceedings.H7 (1995) 3 SCC 147

86. On a harmonious reading of Sections 12 and 14 of the AdmiraltyAct with Section 13 of the Commercial Courts Act, an intra-court appealunder the Admiralty Act to the Commercial Division of the High Courtwould lie from any judgment, decree or final order under the AdmiraltyAct or an interim order under the Admiralty Act relatable to the ordersspecified in Order 43, Rule 1.

87. We are unable to accept Mr. Barucha’s argument that Section14 read with Section 12 of the Admiralty Act, 2017 demonstrateslegislative intent to permit appeals from any interim order passed by theSingle Judge of a High Court exercising admiralty jurisdiction to a DivisionBench of that High Court without any restriction or limitation. Thejudgments of the High Courts referred to by Mr. Barucha rendered inthe facts and circumstances of those cases, in respect of orders underthe Admiralty Act has specifically been made appealable under Section14 of the Admiralty Act. The mere dismissal of a special leave petitiondoes not operate as a precedent of the Supreme Court.

88. It could not possibly have been the legislative intent of theAdmiralty Act to make all interim orders appealable. Such a wideinterpretation of the expression “interim order” would mean that anyparty would be able to delay the trial and final disposal by filing appealseven from inconsequential orders calling for affidavits and the like. We,therefore, hold that an appeal does not lie to the Commercial AppellateDivision of the High Court from an order of the Commercial Division(Single Bench) of the same High Court for addition of a party in anadmiralty suit governed by the Admiralty Act.

89. Even otherwise, we are of the view that the Division Bencherred in law in allowing the appeal from the order of the CommercialDivision (Single Judge) adding Gulf Petroleum as party defendant to thesuit.

90. For the reasons discussed above, the appeals are allowed.The impugned judgment and order of the Division Bench is set aside.

Divya Pandey(Assisted by : Roopanshi Virang, LCRA)

Appeals allowed.

A

B

C

D

E

F

G

H