VIDESH SANCHAR NIGAM LTD.versusM. V. KAPITAN KUD AND ORS.

A                     VIDESH SANCHAR NIGAM LTD.
                                   v.
                      M. V. KAPITAN KUD AND ORS.

                              NOVEMBER 10, 1995
B
                 [K. RAMASWAMY AND B.N. KIRPAL, JJ.]

           Merchant Shipping Act, 195~Section 9(1)-Rules on Admiralty Juris-


                                                                                   -
    diction framed by Bombay High Court-Rules 941 and 954-Admiralty jwis-
    diction-Admiralty suit-Claim of 28 crores-Damage to International
C   Cabl~Rep01t of Cable repairing ship that damage done due to anchor-
    ing-Strong evidence that respondent vessel was within vicinity of damaged
    cabl~Ship is a foreign ship-Strong triable case to exercise admiralty jwis-
    diction-Order releasing vessel on deposit of 10 crores-Ship shall remain
    aTTested until conditions specified to be complied with.
D
          On July 21, 1995, the International Cable which extended on sea-
    route from Singapore to France having branches at Bombay experienced
    a break and the fault was got identified by the appellant plaintiff at a
    distance of about 18.3 Kms. from its office at Bombay. The appellant
    requisitioned the services of Coast Guard Authorities. The report of the
E   Cable repairing ship showed that damage was done due to anchoring. It
    was reported that a vessel was found anchored there. The Coast Guard
    also found that no other vessel was found in the vicinity. The Coast Guard
    contacted the vessel and confirmed the position/mark coordinates as
    determined by the helicopter from the vessel itself. The appellant laid the
F   Admiralty Suit against the respondent vessel claiming damages of about
    Rs. 28 crores. The appellants had taken Notice of Motion for arrest of the
    vessel and the vessel was arrested and detained. The vessel made an
    application for its release from arrest after more than a month. Trial
    Judge having Admiralty Jurisdiction dismissed the Motion and released
    the vessel. In appeal, the Division Bench directed the assessors notified by
G   the Government of India exercising its power u/s 9(1) of Merchant Ship-
    ping Act, 1958, to give their estimate of the anchoring position and probab-
    ly involvement of the first respondent in the breakage of the cable. The
    assessors on the basis of the material available and the affidavit filed by
    the Captain of the vessel, accepting the statement of the Captain, opined
H   that the distance between the position of 3rd July and 29th July ap-
                                          76
              VIDESH SANCHAR NIGAM LTD. v. M.V. KAPITAN KUD                       77

      proximately was 7.50 nautical miles, that the reason for the shifting was A
      strong winds then blowing from Southward and the vessel anchored was
      not able to hold the ship in her position and the vessel was either con·
      tinuoosly or intermittently drifting in northerly direction; that the vessel
      should have dropped anchor, in the designated anchorage which was about
      5 miles clear and northward from the subject communication cable; that B
      the possibility of the vessel having shifted her position after mishap
      completely could not be ruled out; that merchant vessels do not customari-
      ly anchor in the vicinity of the prohibited positions, that Coast Guard

...   authorities were not able to locate any other vessel within 3 nautical miles
      of the respondent-vessel. They concluded that the subject cable had been
      damaged by the anchor of an ocean going vessel being the 1st Respondent C
      vessel was very high. When the correctness of the report was disputed the
      Division Bench appointed two Commissioners who were nautical advisors
      to assess the anchoring position and probably involvement of the respon-
      dent vessel. Neither the advocate nor the solicitors were present at the time
      of inspection of the vessel. The Commissioner's report being in favour of D
      the vessel, the Division Bench after considering the material held that the
      claim of the appellant was vexatious but triable and no adverse inference
      was drawn for the inordinate delay of more than a month in providing
      access to the log book of the ship etc. There being strong evidence to show
      that at the relevant time the respondent vessel was within the Ticinity of
      the damaged cable, the Division Bench declined to interfere on the ground E
      thatthe Captain of the vessel filed an undertaking that the vessel belonged
      to the Black Sea Shipping Company which was wholly owned by the
      Ukrainian Government and that in the event of the suit being decreed they
      would honour the decree, was accepted by the Court. This appeal by special
      leave had been filed against the order passed by the Division Bench of the F
      High Court.

            The appellant contended that the Commissioner appointed by the
      Division Bench were advisors of nautical matter but prim a f acie the
      credibility of the report lost its efficacy when the advocate and the solicitor
      were not permitted to be present at the time of the inspection. According         G
      to the appellant they were wrongfully confined in the cabin of the ship.

            Allowing the appeal, this Court

            HELD : 1.1. Rules on Admiralty Jurisdiction in Part Ill were framed         H
    78                     SUPREME COURT REPORTS [1995] SUPP. 5 S.C.R.

A by Bombay High Court to regulate the procedure and practice thereof on
    the original side of the Bombay High Court. Equally, Original Side Rule
    941 provides that party applying under this rule in a suit in rem for arrest
    of the property shall give an undertaking in writing or through advocate
    to pay such sum by way of damages as the Court may award as compen-
    sation in the event of a party affected sustaining prejudice by such order.
B   Rule 954 of Admiralty Rules provides that subject to the provisions of Rule
    952 (caveat property not to be released unless notice is given to the
    caveator), property arrested under a warrant may be ordered to be
    released - (i) at the request of the plaintiff, before an appearance in person
    or a vakalatnama is filed by the defendant; or (ii) on the defendant paying
c   into Court the amount claimed in the suit; or (iii) on the defendant giving
    such security for the amount claimed in the suit as the Court may direct;
    or (iv) on any other ground that the Court may deem just. Thus a ship
    arrested under warrant may be released on fulfillment of any of the
    conditions mentioned hereinbefore. This could be done on the plaintiff
D   showing plima facie best case .

        . The usual step following an acknowledgment of service in action in
 . rem is for the owner of the prope,rty arrested to procure its release by giving
   security for the plaintiff's claim. This may be done either by paying the
   amountvof the plaintiff's claim into Court, or by providing bail in a suffi-
E cient amount, or by furnishing a guarantee acceptable to the plaintiff. The
   third method is nowadays the most common in practice. Amount should be
   sufficient to cover the plaintiff's claim, together with interest and costs on
   the basis of his reasonably arguable best case. [83-E-F; 84-A-D]

F          Halsbury's Laws of England Volume I (I), Fourth Edition, referred
    to.

           1.2. In the instant case, the damage to the International Cable of the
    appellant was not in dispute. The report of the Cable repairing ship
    showed that damage was done due to anchoring. The report of the survey
G   conducted by helicopter which had flown over the vessel immediately after
    the notice of breakage of the cable found the respondent vessel in the
    vicinity. It found no other vessel in the vicinity. The map showing that
    inner approach to Bombay Port depths in .meters would indicate the
    designated anchorage area. The Survey conducted by the helicopter
H   showed that cable break had occurred three nautical miles of the respon-
            VIDESHSANCHARNIGAMLTD.v. M.V.KAPITANKUD                          79

    dent-vessel. The survey conducted by the helicopter was contemporaneous A
    to the proximately to the date of occurrence. As for the plan, the original
    position of anchoring on July 3, 1995 at 1850 hours was at point 1.
-   Immediately thereafter at 1230 hours the vessel had anchored at point 2.
    It had moved to point 3 by 1030 hours on July 6, 1995. It moved towards
    point 4 on 12th July, 1995. Thereafter, it was found at point 5 between 13th B
    and 29th July, 1995. The crucial disputed area was at point 6 where the
    vessel was alleged to have been anchored. According to the appellant-plain-
    tiff, she was anchored at point 6 on July 21, 1995 as per as report of the
    helicopter of the Coast Ground Authorities. The cable was found damaged
    in the early hours of the said day. Till September 1, 1995 the Captain of
    the vessel had not given access to the log book etc. and other relevant C
    record maintained by the vessel. The surveyors had stated that it was not
    in dispute that during the monsoon season in July the blow of strong winds
    was very high in the West Coast. The report of the repairing ship showed
    that damage to the cable was done due to anchoring of a commercial vessel.
                                                               [84-E-H; 85-A-C] D
          1.3. There was the report of the surveyors, the Government officials
    appointed by the Government of India by statutory notification. They were
    enjoined to assist the Court under Section 140 of C.P.C. They had given
    reasons in their report. Prima f acie the reasons given by them could not be
    said to be partial or one-sided. They had stated at more than one place that   E
    they had no. access to the log book and other records since they were not
    placed before them. They relied on the affidavit filed by the Captain of the
    ship. They also relief on the helicopter's report, Coast Guard authorities
    report and also repairing vessel's report. The respondent-vessel was the
    one highly probable for the breakage of the cable. They also opined that no
    other vessel was found in the vicinity of the helicopter. (85-E-G]             F

          Schwan & Co. (Grain) Ltd. v. St. Elefterio Ex A1ion (owner), (1957)
    Probate Division 179; The Moscftanthy, (1971) Lloyds Law Report 37; M. V.
    Elisabeth & Ors. Etc. v. Harwan Investment & Trading Pvt. Ltd., [1993] Supp
    2 SCC 433 and Asiatic Steam Navigation Co. Ltd. v. Sub-Lt. Arabinda            G
    Chakravarti, (1959] Supp. 1 SCR 979, relied on.

            1.4. There was a strong triable case, the ship was a foreign ship and
    if it left the shores of Indian territorial waters it was. difficult to get hold
    of it and it might not return to the jurisdiction of Indian Courts. The claim
    thereby, even if successful, would remain unexecutable or land in trouble H
    80                     SUPREME COURT REPORTS [1995] SUPP. 5 S.C.R.

A   in private international law in its enforcement. Under these circumstances,
    the vessel was to be released on the certain conditions, viz., (i) the respon-
    dent shall deposit a sum of Rs. 10 crores; (ii) the Ukrainian Government
    shall give an undertaking through its accredited authority, more par-
    ticularly may be its Ambassador attached to its Embassy in India in
    writing duly undertaking that in the event of the suit being decreed they
B   would comply with the decree without reference to the execution; (iii) the




c
    undertaking should be for balance amount of Rs. 18 crores and towards
    costs and other expenses roughly put at Rs. 25 crores. It would be open to
    them to comply with these directions at any time. No time limit was fixed
    because it would be open to them to cPmply with it at any time and until
    then the ship shall remain arrested and shall not leave the shores oflndian
                                                                                     -
    territorial waters. On deposit of Rs. 10 crores and on furnishing of
    undertaking to the satisfaction of the Division Bench of the High Court,
    the High Court would give appropriate direction for releasing the vessel
                                                                                     .'
    in accordance with law. [88-A-D]
D           CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10003 of
    1995.

         From the Judgment and Order dated 13.10.95 of the Bombay High
    Court in A. No. 727 of 1995.
E        F.S. Nariman, Venkatesh Dhond, Gaurav Banerjee, Shlikant Hathi,
    Raian Karanja Wala, · Subhash Sharma and Ms. Ruby Ahuja for the·
    Appellant.

         Harish N. Salve, M.K. Mukherjee, R.N. Valawalkar, N.K.Kantawala
    and Bharat Sangal for the Respondent Nos. 1-2.
F
            The Judgment of the Court was delivered by

            K. RAMASWAMY, J. Leave granted.

            This appeal by special leave arises from the order dated October 13,
G 1995 passed by the Division Bench of the Bombay High Court iJ'!. Appeal
    No. 727 of 1995 in Notice of Motion in Admiralty Suit No. 46 of 1995. By
    the impugned order, the Division Bench modified the ord~r of the learned
    single Judge and directed release of commercial ship M/s. M.V. Kapita
    Kud. The facts not in dispute are that on July 21, 1995 at around 6.00 a.m.
H   the In.ternatiopal Cable which extends on sea-route from Singapo!'.'e to
 VIDESHSANCHARNIGAMLTD.v. M.V. KAPITANKUD [KRAMASWAMY,J.) 81

France having branches at Bombay, experienced a break and the fault was A
got identified by the appellant-plaintiff at a distance of about 18.3 kms.
from its office at Prabhadevi in Greater Bombay whereat its cable station
is situated. According to the appellant, due to break of the cable, overseas
telecommunication was disrupted. They requisitioned the services of Coast
Guard authorities to identify whether any ship had anchored in the vicinity B
of the break-point. The appellant in that behalf wrote a letter to the Coast
Guard authorities on July 21, 1995 itself and requested "to survey the area
and identify if any vessel has anchored there". The co-ordinates of the
break point were indicated as 18 deg. 59.4'N and 72 deg 41.0'E. On July
22, 1995, Deputy Commandant of the Coast Guard Region (West) had
stated thus : "A helicopter reported that a vessel named "Kapita Kud" C
registered ODESSA was found anchored in position 310 PRONGS - 0.9
miles, in 18 deg 58.5'North and 72 deg 40.7'East".

       The repairing vessel which repaired the faulted cable found thus:
 "Cable fault caused by Shift anchor". The Coast Guard further found that D
 no other vessel was found in the vicinity. It contacted the vessel on radio
 and confirmed the position/mark co-ordinates as determined by the
helicopter from the vessel itself. On July 29, 1995, the appellant laid the
.A.dmiralty Suit No. 46 of 1995 against the respondent-vessel claiming
damages of about Rs. 28 crores the break-up whereof has been stated in
Exh. 'C' of the plaint reproduced at page 94 of Additional Documents filed E
as Volume I at the exchange rate of Rs. 32 per US Dollar. The appellants
had taken Notice of Motion for arrest of the vessel by order dated July 29,
 1995, the vessel was arrested and detained by the Sheriff of Bombay. It is
 also not in dispute that the Captain of the vessel had not made any contact
with the appellants for more than one month and for the first time on p
September 1, 1995 the vessel made an application for its release from arrest
by way of Notice of Motion. The learned Trial Judge having Admiralty
Jurisdiction dismissed the.Motion and released the vessel.

       Section 140 of Civil Procedure Code 1908, (for short, 'the Code')
provides that in any Admiralty or Vice-Admiralty cause of salvage ...... the G
court, whether it be exercising its original or its appellate jurisdiction may,
in its jurisdiction on request by either party summon to its assistance two
competent assessors in the manner stated thereunder and such assessors
shall attend and assist the court accordingly. The Government of India
exercising its power under Section 9 (1) of Merchant Shipping Act, 1958 H
    82                    SUPREME COURT REPORTS [1995) SUPP. 5 S.C.R.

A   (44 of 1958) has notified the officers specified in the Schedule, to be
    assessors for the purposes of the said Act. For the Port of Bombay, the
    officers are Nautical Surveyor, Engineer and Ship Surveyor and Ship
    Surveyor attached to the Mercantile Marine Department, Bombay District
    or to the Directorate General of Shipping, Bombay. The Division Bench
    by its order dated September 26, 1995 directed the assessors to give their
B   estimate of the anchoring position and probable involvement of the first-
    respondent in the breakage of the cable and gave five directions 1n that
    behalf. When the notice was issued, though initially the Captain of the
    vessel and first respondent responded, later they declined to participate in
    the proceedings before the· assessors. On the basis of the material available
C   and the affidavit filed by the Captain of the vessel, the assessors accepting
    the statement of the Captain opined that the distance between the position
    of 3rd July and 29th July approximately was 7.50 nautical miles. The reason
    for the shifting was strong winds then blowing from Southward. The vessel
    anchored was not able to hold the ship in her position and the vessel was
D   either continuously or intermittently drifting in northerly direction. The
    vessel should have dropped anchor in the designated anchorage which was
    about 5 miles clear and northward from the subject communication cable.
    The possibility of the vessel having shifted her position after mishap
    completely could not be ruled out. Merchant vessels do not customarily
    anchor in the vicinity of the prohibited positions. Coast Guard authorities
E   were not able to locate any other vessel within 3 nautical miles of the
    respondent-vessel. They concluded that "based on the foregoing it is quite
    clear that the subject cable has been damaged by the anchor of an ocean
    going ship. The probability of that ocean going vessel being the 1st Respon-
    dent vessel, as stated above, is very high".
F
           When the correctness of the report was disputed the Division Bench
    appointed two Commissioners who were nautical advisors, one in service
    and the other having retired from Government of India service. In this
    behalfj one circumstance that becomes relevant to notice and could not be
    disputed is that after appointment of the Commissioners the proceedings
G   of the Commissioners do indicate that neither the advocate nor the
    solicitors were present at the time of inspection of the vessel. It would be
    relevant to note that when the report of the surveyors was submitted and
    when two Commissioners were appointed to assess the anchoring position
    and probable involvement of the respondent-vessel, it would be highly
H   unlikely that the counsel or the solicitors of the appellant would abstain

                                                                                    .,
  VIDESH SANCHAR NIGAM LTD. v. M.V. KAPITAN KUD (K. RAMASWAMY, J.) 83


from participating in the proceedings before the Commissioners. On the A
other hand, having had the copy of the report of the surveyors, it would
be, likely and highly probable in ordinary human conduct that they would
present and press their case before the Commissioners. The case set up by
the appellant is that when they went into the vessels, both, the advocate
and the solicitor were wrongfully confined in the cabin of the vessel and
                                                                            B
they were thereby prevented to participate in the inspection and the report
of the Commissioners was one-sided. It would appear to be probable
though the objection came to be sent by Fax belatedly. The delay by itself
is not material in view of the highly probable circumstance referred to
earlier. The Commissioners' report is in favour of the vessel.
                                                                                c
      The Division Bench after considering the material held that "it
cannot be said that the claim of the appellant/original plaintiff is vexatious.
It cannot be said that the matter does not wartant and trial." The Division
Bench was not inclined to draw any adverse inference for the inordinate
delay of more than a month in providing access to the log book of the ship D
etc.

       The crucial question is whether the appellant has made out prima
facie case. Rules on Admiralty Jurisdiction in Part III were framed by
Bombay High Court to regulate the procedure and practice thereof on the
original side of the Bombay High Court. Equally, Original Side Rule 941         E
is relevant in this regard which provides that party applying under this rule
in a suit in rem for arrest of the property shall give an undertaking in
writing or through advocate to pay such sum by way of damages as the
court may award as compensation in the event of a party affected sustaining
prejudice by such order. In Mahadeo Savlaram She/ke & Ors. v. Pune              F
Municipal Corporation & Anr., (1995] 3 SCC 33, even in case of Civil Court,
exercising its power under Order 39 Rule 1, this Court held that while
granting interim injunction, the Civil Court or Appellate Court is enjoined
to impose as a condition that in the event of the plaintiff failing to prove
the case set up and if damages are caused to the defendant due to the
injunction granted by the court, the court would first ascertain whether the    G
plaintiff would adequately be compensated by damages if injunction is not
granted. Equally the court should also impose condition for payment of
 damages caused to the defendant in the same proceeding without relegat-
ing the parties for a separate suit. The plaintiff should give such an
undertaking as a part of the order itself. Rule 954 of Admiralty Rules          H
    84                    SUPREME COURT REPORTS (1995) SUPP. 5 S.C.R.

A   provides that subject to the provisions of Rule 952 (caveat property not to
    be released unless notice is given to the caveator), property arrested under
    a warrant may be ordered to be released - (i) at the request of the plaintiff,
    before an appearance in person or a vakalatnama is filed by the defendant;
    or (ii) on the defendant paying into Court the amount claimed in the suit;
    or (iii) on the defendant giving such security for the amount claimed in the
B
    suit as the Court may direct; or (iv) on any other ground that the Cou~t
    may deem just. Thus a ship arrested under warrant may be released on
    fulfilment of any of the conditions mentioned hereinbefore. This could be
    done on the plaintiff showing p1inia f acie best case.

C          Halsbury's Laws of England, Volume I (I), Fourth Edition at page
    436 on Admiralty Jurisdiction, Para 386 states that "the usual step following
    an acknowledgment of service in an action in rem is for. the owner of the
    property arrested to procure its release by giving security for the plaintiffs
    claim. This may be done either by paying the amount of the plaintiffs claim
D   into court, or by providing bail in a sufficient amount, or by furnishing a
    guarantee acceptable to the plaintiff. The third method is nowadays the
    most common in practice. Para 389 provides that "amount should be
    sufficient to cover the plaintiffs claim, together with interest and costs on
    the basis of his reasonably arguable best case."

E        The question, therefore, is whether the appellant has reasonably
  arguable best case in an admiralty action. As stated earlier, the damage to
  the International Cable of the appellant is not in dispute. The report of the
  Cable repairing ship shows that damage was done due to anchoring. The
  report of the survey conducted by helicopter which had flown over the
F vessel  immediately after the notice of breakage of the cable found the
  vessel in the vicinity. It found no other vessel in the vicinity. The question
  is whether the vessel was anchored in the prohibited area. The map
  showing that inner approach to Bombay Port depths in meters would
  indicate the designated anchorage area. The survey conducted by the
G helicopter shows that cable break had occurred three nautical miles of the
  respondent-vessel. The bottle-green colour marked in the map is the area
  surveyed by the helicopter. The survey conducted by the helicopter is
  contemporaneous to the proximately to the date of occurrence. It is seen
  that as for the plan, the original position of anchoring on July 3, 1995 at
  1350 hours was at point 1. Immediately thereafter at 1230 hours the vessel
H had anchored at point 2. It had moved to point 3 by 1030 hours on July 6,
 VIDESHSANCHARNIGAMLID.v.M.V.KAPITANKUD[KRAMASWAMY,J.] 85

1995. It moved towards point 4 on 12th July, 1995. Thereafter, it was found A
at point 5 between 13th and 29th July, 1995. The crucial disputed area is
at point 6 where the vessel was alleged to have been anchored. According
to the appellant-plaintiff, she was anchored at point 6 on July 21, 1995 as
per as report of the helicopter of the Coast Guard authorities. The cable
was found damaged in the early hours of the said day. It is seen that till
                                                                            B
September 1, 1995 the· Captain of the vessel had not given access to the
log book etc and other relevant record maintained by the vessel. The
surveyors have stated that it was not in dispute that during the monsoon
season in July the blow of strong winds is very high in the West Coast.
The report of the repairing ship shows that damage to the cable was done
due to anchoring of a commercial vessel.                                     c
        The question, therefore, is whether the respondent-vessel was one
probably involved in causing the damage to the cable. It is true as con-
tended by Shri Harish N. Salve, learned senior advocate that the Commis-
sioners appointed by the Division Bench are advisors of nautical matters D
but p1ima facie the credibility of the report lost its efficacy when the
advocate and the solicitor were not permitted to be present at the time of
the inspection. According to the appellant they were wrongfully confined
in the cabin of the ship. Therefore, much of the stream of the report lost
its vitality. We have the report of the surveyors, the Government officials
appointed by the Government of India by statutory notification. They are E
enjoined to assist the court under Section 140 of C.P.C. They have given
reasons in their report to which we have been taken through. Plima facie
we are satisfied that the reasons given by them cannot be said to be partial
or one-sided. They have stated at more than one place that they had no
access to the log book and other records since they were not placed before F
them. They relied on the affidavit filed by the Captain of the ship. They
also relied on the helicopter's report, Coast Guard authorities' report also
repairing vessel's report. The respondent-vessel was the one highly prob-
able for the breakage of the cable. They also opined that no other vessel
was found in the vicinity of the helicopter.
                                                                             G
      In M. V. Elisabeth & Ors. ~tc. v. Harwan Investment & Trading Pvt.
Ltd., Goa, [1993] Supp. 2 SCC 433 this Court held thus :

        "Maritime law is as much a part of the general legal system as any
        other branch of the law. It is within the competence of the ap-      H
    86                    SUPREME COURT REPORTS [1995] SUPP. 5 S.C.R.

A            propriate Indian Courts to deal, in accordance with the general
             principles of maritime law and the applicable provisions of
             statutory law, with all p'.'ff.ons and things found within their juris-
             diction. The power of the court is plenary and unlimited unless it
             is expressly or by necessary implication curtailed. Absent such
             curtailment of jurisdiction, all remedies which are available to the
B            courts to administer justice are available to a claimant against a
             foreign ship and its owner found within the jurisdiction of the High
             Court concerned. This power of the court to render justice must
             necessarily include the power to make interlocutory orders for
             arrest and attachment before judgment. Power to enforce claims
c            against foreign ships is an essential attribute of admiralty jurisdic-
             tion and it is assumed over such ships while they are within the
             jurisdiction of the High Court by arresting and detaining them.
             This jurisdiction can be assumed by the High Court concerned,
             whether or not the defendant resides or carries on business, or the
             cause of action arose wholly or in part, within the local limits of
D
             its jurisdiction. Once a foreign ship is arrested within the local
             limits of the jurisdiction of the High Court, and the owner of the
             ship has entered appearance and furnished security to the satis-
             faction of the High Court for the release of the ship, the proceed-
             ings continue as a personal action."
E
          In The'Asiatic Steam Navigation Co. Ltd. v. Sub-Lt. Arabinda Chak-
    ravmti, [1959] Supp. 1 SCR 979 this Court held that the function of the
    nautical assessors is to advise the Court upon nautical matters. Their advice
    is admissible in admiralty courts on all issues of facts about the seamanship.
p   The decision, however, rests entirely with the courts even on purely nautical
    matters. The court is !lot bound to follow the advice of the assessors but
    on questions of nautical science and skill greater attention must obviously
    be paid to the opinion of the assessors since they are the only source of
    information on those points and some reason should be given for disregard-
    ing them.
G
           In SchwalZ & Co. (Grain) Ltd. v. St. Elefterio EX A1ion (Owners),
     [1957] Probate Division 179, Willmer, J. consider.ing the scope of prima
    f acie case held at page 185 that "it has not b~en suggested that the
     proceedings are frivolous or vexatious, so as to call for the exercise of the
H    court's inherent jurisdiction to halt such proceedings in limine. The
 VIDESH SANCHAR NIGAM LID. v. M.V. KAPITAN KUD [K. RAMASWAMY, J.] 87


defendants' argument is founded on the proposition that section 3 (4) of A
the Act of 1956 introduced a new restriction on the right to proceed in rem
and that a plaintiff cannot arrest a ship under that sub-section unless he
can prove - and prove at the outset - that he has a cause of action
sustainable in law. In my judgment that proposition rests upon a miscon-
ception of the purpose and meaning of section 3(4)". It was held that the
                                                                                  B
scope of the Act was to enlarge the jurisdiction of admiralty court but not
to restrict its jurisdiction. At page 187 it was held that "it is possible (these
things have been known to happen) that a higher court might take a
different view; but in the meantime the ship, which is a foreign ship, has
been freed from arrest, has gone, and may never return to this country. It
might be that in those circumstances the plaintiffs would have lost their c
right for ever to entertain proceedings in rem in this country. The remedy
for the defendants is to release their ship is to be put in appeal. The action
will then be tried at the appropriate time when all the facts have been
ascertained due consideration will be given to the arguments at law which
the defendants desire to advance. Accordingly the motion for release of D
the ship was dismissed.

       In The Moschanthy ((1971) 1 Lloyd's Law Reports 37 at 42] where
the question was whether the admiralty action was vexatious, following the
ratio of Willmer, J. in St. Elefte1io (supra) it was held that action could not
be successful. It was held that courts should only stay the action on the E
ground when the hopelessness of the plaintiff's claim is beyond doubt. If
it is not beyond doubt but on the contrary the plaintiff has arguable, even
though difficult, case even in law the action would be allowed to proceed
to trial. The application for stay was accordingly rejected.
                                                                                 F
       The admiralty action is an action in rem. The Division Bench found
that the claim was not vexatious but is triable. There is strong evidence to
show that at the relevant time the respondent-vessel was within the \~cinity
of the damaged cable. The Division Bench declined to interfere on the
ground that the Captain of the vessel filed an undertaking that the vessel
belonged to the Black Sea Shipping Company which is wholly owned by G
the Ukrainian Government. The undertaking given by the Captain of the
vessel that in the event of the suit being decreed they would honour the
decree, was accepted by the Court and it directed the release of the vessel.
We think that neither the approach of the Division Bench of the High
Court nor the finding of the learned Trial Judge on the admiralty jurisdic-. H
    88                    SUPREME COURT REPORTS [1995] SUPP. 5 S.C.R.

A tion that no prim a f acie case is made out, is right. It is seen that there is
    strong triable case for the reasons stated earlier. The ship is a foreign ship
    and if it leaves the shores of Indian territorial waters it is difficult to get
    hold of it and it may not return to the jurisdiction of Indian courts. The
    claim thereby, even if successful, would remain unexecutable or land in
    troubie in private international law in its enforcement. Under these cir-
B   cumstances, we are of the firm opinion that the vessel may be released on
    the certain conditions, viz., (i) the respondent shall deposit a sum of Rs.
    10 crores; (ii) the Ukrainian Government shall give an undertaking through
    its accredited authority, more particularly may be its Ambassador attached
    to its Embassy in India in writing duly undertaking that in the event of the
c   suit being decreed they would comply with the decree without reference
    to the execution; (iii) the undertaking should be for balance amount of Rs.
    18 crores and towards costs and other expenses roughly put at Rs. 25
    crores. It would be open to them to comply with these directions at any
    time. We are not fixing any time limit because it would be open to them
D   to comply with it at any time and until then the ship shall remain arrested
    and shall not leave the shores of the Indian territorial waters. On deposit
    of Rs. 10 crores and on furnishing of undertakings to the satisfaction of the
    Division Bench of the High Court, as stated above, the High Court would
    give appropriate direction for releasing the vessel in accordance with law.

E         Accordingly, the appeal is allowed. The notice of motion is made
    absolute subject to the above conditions. In the circumstances, the parties
    are directed to bear their own costs.

    R.A.                                                         Appeal allowed.