# M.V. ELISABETH AND ORS.· v. HARWAN INVESTMENT AND TRADING PVT. LTD., HANOEKAR HOUSE, SWATONTAPETH, VASCO-DE-GAMA, GOA - **Citation:** [1992] 1 S.C.R. 1003 - **Court:** Supreme Court of India - **Decided:** 1992-02-26 - **Bench:** Dr. T.K. Thommen, R.M. Saha! - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-v-elisabeth-and-ors-v-harwan-investment-and-trading-pvt-ltd-hanoekar-house-11406 - **Pages:** 69 ## Headnote Constinition of India, 1950: A B Anicles 215, 225 and 226-Admiralty jurisdiction of High Coun;~ C Claims agai11st foreign vessel--Cargo going out of I11dia-Action i11 rem-Inherent jurisdiction--Whether exte11ds to claim relating i11ward and outward cargo-Whether extends to such foreign vessel a11d the amst thereof Anic/e 372: Reconunendations of Law Con1111ission relating to coniprehensive Law 011 couns of admiralty-No subseque/11 legislation passed-Co11tinue to be govemed by legislations e11acted for colonies by British Par/iame11t -{}rgellt 11eed for legislative action-Stressed. Andhra State Act, 1953: Sections 30, 5rAdmiralty jurisdictio11 of the High Cout1-Concept a11d continua11ce of-Whether the admiralty jurisdiction exte11ds to a foreign vessel i11 respect of claim relati11g to carriage of goods from Indian pan to foreign pan. Merchant Shipping Act, 1958 : Sections 3(15), 443 and 444-Detention of foreign vessel--'Damage'-- What is-Whether confined to physical damage or wide enough to include all niaritinze clainis. Admiralty Coun Act, 1861: Admiralty jurisdiction-Applicability in India-Powers of admiralty couns--Whether frozen as on the date of the passing of the Act-Subsequent changes in law-Effect of-Need for updating a11d enacting new legislation D E F G keeping in view the rights of citizens of f!ldian Sovereign Republic. H 1003 1004 SUPREME COURT REPORTS [1992) 1 S.C.R. A Words & Phrases : 'Damage' occuning in Section 443 of the Merchant Shipping Act, 1958-Meaning of The appellant vessel, which was lying in the port of Marmagao, left B the port without issuing bills of lading or other documents as required by the Respondent company for the goods shipped by it. On reaching the port of destination, despite the_ direction of the respondent company not to deliver the goods by reason of the buyer's failure to pay the agreed price, the appellants handed over the goods to the consignee. Since the appel· C lants acted in breach of duty thereby committing conversion of the goods entrusted to them, the respondent instituted a suit against the appellants invoking the admiralty jurisdiction of the Andhra Pradesh High Court by means of an action in rem. The vessel was arrested when it entered the port of Vishakapatnam, ·and later released on the owner's furnishing security by way of Bank guardntee. D E In the proceedings before the High Court, the appellant raised a preliminary objection as to jurisdiction stating that the suit against a foreign ship owned by a foreign company not having a place of residence or business in India, could not proceed on the admiralty side of the High Court by an action in rem in respect of a cause of action by reason of a tort or a breach of obligation arising from the carriage of goods from an Indian port to a foreign port. This objection was overruled by a Single Judge of the High Court and later confirmed by a Division Bench, against which the present appeal has been preferred. F Finally the suit was decreed by a Single Judge and the appeal therefrom is the subject matter of the other matter before this Court, viz., the Transfer Petition. On behalf of the appellants it was contended that the power of the High Court on the admiralty side was confined to the provisions of the G Admiralty Court Act, 1861 made applicable to India by the Colonial Courts of Admiralty Act, 1890 read with the Colonial Courts of Admiralty (India) Act, 1891 declaring certain Courts of unlimited civil jurisdiction as Colonial Courts of Admiralty, but it remained frozen as on the date of Admiralty Court Act, 1861; that the wide powers assumed by the British H Courts under the subsequent statutes of that country did not enlarge the " '--{ ELISABETH v. HARWAN INVESTMENT 1005 admiralty jurisdiction of the High Court in India; that section 6 of the A Admiralty Court Act, 1861, the only provision relating to cargo, confined itself to inward cargo only, and therefore the case did not fall under the ambit of section 6 of the Act ## Text _Characters 0–39,957 of 172,014. This is a partial read: ask again with offset=39957 for what follows._ --\ - , , y M.V. ELISABETH AND ORS.· v. HARWAN INVESTMENT AND TRADING PVT. LTD., HANOEKAR HOUSE, SWATONTAPETH, VASCO-DE-GAMA, GOA FEBRUARY 26, 1992 [DR. T.K. THOMMEN AND R.M. SAHA!, JJ.J Constinition of India, 1950: A B Anicles 215, 225 and 226-Admiralty jurisdiction of High Coun;~ C Claims agai11st foreign vessel--Cargo going out of I11dia-Action i11 rem-Inherent jurisdiction--Whether exte11ds to claim relating i11ward and outward cargo-Whether extends to such foreign vessel a11d the amst thereof Anic/e 372: Reconunendations of Law Con1111ission relating to coniprehensive Law 011 couns of admiralty-No subseque/11 legislation passed-Co11tinue to be govemed by legislations e11acted for colonies by British Par/iame11t -{}rgellt 11eed for legislative action-Stressed. Andhra State Act, 1953: Sections 30, 5rAdmiralty jurisdictio11 of the High Cout1-Concept a11d continua11ce of-Whether the admiralty jurisdiction exte11ds to a foreign vessel i11 respect of claim relati11g to carriage of goods from Indian pan to foreign pan. Merchant Shipping Act, 1958 : Sections 3(15), 443 and 444-Detention of foreign vessel--'Damage'-- What is-Whether confined to physical damage or wide enough to include all niaritinze clainis. Admiralty Coun Act, 1861: Admiralty jurisdiction-Applicability in India-Powers of admiralty couns--Whether frozen as on the date of the passing of the Act-Subsequent changes in law-Effect of-Need for updating a11d enacting new legislation D E F G keeping in view the rights of citizens of f!ldian Sovereign Republic. H 1003 1004 SUPREME COURT REPORTS [1992) 1 S.C.R. A Words & Phrases : 'Damage' occuning in Section 443 of the Merchant Shipping Act, 1958-Meaning of The appellant vessel, which was lying in the port of Marmagao, left B the port without issuing bills of lading or other documents as required by the Respondent company for the goods shipped by it. On reaching the port of destination, despite the_ direction of the respondent company not to deliver the goods by reason of the buyer's failure to pay the agreed price, the appellants handed over the goods to the consignee. Since the appel· C lants acted in breach of duty thereby committing conversion of the goods entrusted to them, the respondent instituted a suit against the appellants invoking the admiralty jurisdiction of the Andhra Pradesh High Court by means of an action in rem. The vessel was arrested when it entered the port of Vishakapatnam, ·and later released on the owner's furnishing security by way of Bank guardntee. D E In the proceedings before the High Court, the appellant raised a preliminary objection as to jurisdiction stating that the suit against a foreign ship owned by a foreign company not having a place of residence or business in India, could not proceed on the admiralty side of the High Court by an action in rem in respect of a cause of action by reason of a tort or a breach of obligation arising from the carriage of goods from an Indian port to a foreign port. This objection was overruled by a Single Judge of the High Court and later confirmed by a Division Bench, against which the present appeal has been preferred. F Finally the suit was decreed by a Single Judge and the appeal therefrom is the subject matter of the other matter before this Court, viz., the Transfer Petition. On behalf of the appellants it was contended that the power of the High Court on the admiralty side was confined to the provisions of the G Admiralty Court Act, 1861 made applicable to India by the Colonial Courts of Admiralty Act, 1890 read with the Colonial Courts of Admiralty (India) Act, 1891 declaring certain Courts of unlimited civil jurisdiction as Colonial Courts of Admiralty, but it remained frozen as on the date of Admiralty Court Act, 1861; that the wide powers assumed by the British H Courts under the subsequent statutes of that country did not enlarge the " '--{ ELISABETH v. HARWAN INVESTMENT 1005 admiralty jurisdiction of the High Court in India; that section 6 of the A Admiralty Court Act, 1861, the only provision relating to cargo, confined itself to inward cargo only, and therefore the case did not fall under the ambit of section 6 of the Act; and that the arrest of the vessel in purported exercise of admiralty jurisdiction ill rem concerning a claim relating to outward cargo, was null and void. B On behalf of the respondents it was contended that every person has a right to approach the Court of the land for appropriate remedy in respect of claims against a foreign ship and its owne~, and to deny him that right and to compel him to pursue remedy in a foreign country according to an unfamiliar system of law and practice in strange and C uncertain conditions and consequently incurring high expenses with all the uncertainties of such a pursuit, was unjust and uncalled for; that all major systems of law the world over recognise the competence of the coastal State to assume jurisdiction over a foreign ship entering its waters in respect of certain well recognised claims, irrespective of where the cause of action D arose or where the defendant has his place of residence or business; that the reason for such wide jurisdiction being the non-availability of the foreign owner within the local jurisdiction, and the stay of the foreign ship in the waters of the coastal State being necessarily brief, jurisdiction over the ship has to be exercised by its arrest and detention by means of an action ill rem; that the High Court being a court of record with unlimited E jurisdiction, it 'fas never intended by the British Parliament that the admiralty power conferred on certain High Courts should remain frozen as on the date of the passing of the Admiralty Court Act, 1861 and that the subsequent changes in the law of Great Britain should not widen the jurisdiction of the Indian High Courts; and that the colo.nial statutes Y should not be so construed as to stand in the way of the Indian High Courts exercising unlimited jurisdiction except where the jurisdiction is barred expressly or by necessary implication. F Dismissing the appeal and returning the Transferred Case to the High Court, this Court, HELD : (By the court) : The High Court of Andhra Pradesh undoubtedly possesses jurisdic· lion over claims relating to inward and outward cargo. Therefore the High -,. G Court rightly assumed jurisdiction by the arrest of the appellant vessel H 1006 SUPREME COURT REPORTS [1992] 1 S.C.R. A while it was lying in the port of Vishakhapatnam. I (Per nwmmen, !) : I. The Andhra Pradesh High Court is the successor to the Madras High Court in respect of the territories transferred from Madras and B included in the State of Andhra which was formed by the Andhra State Act, 1953. In the port ofVishakhapatnam the Andhra Pradesh High Court has thus the same jurisdiction as was vested in the Madras High Court prior to the trdnsfer of that territory. [10210; 1022A] C 2.1. The fact that the High Court continues to enjoy the same jurisdiction as it had immediately before the commencement of the Constitution, as stated in Article 225 of the Constitution does not mean that a matter which is covered by the Admiralty Court Act, 1861 cannot be otherwise dealt with by the High Court, subject to its own Rules, in exercise of its manifold jurisdiction, which unless barred, is unlimited. To the D extent not barred expressly or by necessary implication, the judicial sovereignity of this country is manifested in the jurisdiction vested in the High Courts as superior courts. [1024E, F]. E F 2.2. It is true that the Colonial statutes continue to remain in force by reason of Article 372 of the Constitution of India, but that does not stultify the growth of law or blinker its vision or fetter its arms. Legislation has always marched behind time, but it is the duty of the Court to expound and fashion the' law for the present and the future to meet the ends of justice. [1026B, CJ Kama/akar Mahadev Bhagat v. Scindia Steam Navigation Co. Ltd., AIR 1961 Bombay 186; Mrs. Sahida Ismail v. Petko R. Sa/vejkov & Ors., AIR 1973 Bombay 18; Jayaswa/ Slzipping Company v. S.S.Leelavati, AIR 1954 Calcutta 415; Rzmgta Sons Pvt. Ltd. & Anr. v. S.S. Edison Mariner & Anr., 1961 - 62 (66) Calcutta Weekly Notes 1983; Smt. Reena Padlzi v. Jagdlzir, G AIR 1982 Orissa 57; National Co. Ltd. v. Asia Mariner, 72 CWN 635, overruled. 3. What the Colonial Courts of Admiralty Act, 1890 did was not to incorporate any part!cular English Statute into Indian law for the purpose of conferring admiralty jurisdiction, but to assimilate the competent H Courts in India to the position of the English High Court in the exercise ' ,. ELISABETH v. HARWAN INVESTMENT 1007 of admiralty jurisdiction. It would, therefore, appear that any expansion A of Admiralty jurisdiction of the High Court in England ·was intended likewise to expand the jurisdiction of the Colonial Courts of Admiralty. This should have been regarded as the position with respect to a Colonial Court of unlimited jurisdiction. [1027H; 1028A, BJ The Yuri Marn v. The Woron, [1927) AC 906, referred to. 4. It was because of the unlimited civil jurisdiction that was already vested in the Jfigh Courts that they were declared to be Colonial Courts of Admiralty having the same jurisdiction in extent and quality as was vested in the High Court of England by virtue of any statute or custom. The High Courts were declared to be competent to regulate their procedure and prac- . !ice in exercise of admiralty jurisdiction in accordance with the Rules made in that behalf. There is, therefore, neither reason nor logic in imposing a fetter on the jurisdiction of these High Courts by limiting it to the provisions B c of an imperial statute of 1861 and freezing any further growth of jurisdiction. This is all the more true because the Admiralty Court Act, 1861 was in D substance repealed in England a longtime ago. [1029F-H] Halsburv's Laws of England, 4th Ed. Vol. I (!), para 307; Halsbury's Stat11tes of England, Vol. 1, para 9, referred to. 5. The wide jurisdiction vested in the English Courts is derived from E ancient principles of Maritime Law developed by custom and practice as well as from subsequent statutes many of which have been incorporated in the provisions of International Conventions unifying the laws practised in several maritime countries. [1032E-F] The Geetano and Maria, (1862) 7 PD; The Gas Float Whitton, N.2 (1896), referred to. A History of English Law, Vol. 1, 5 and 8; Rescoe's Admiralty Practice, 5th Ed.; Marsden : Select Pleas. of the Court of Admiralty, Vol. I & II; Law F and Custom of the Sea, Vol. I & II; Benedict on Admiralty, 6th Ed. (1940) G Vol. I; Gilmore and Black; Law of Admiralty, (1957); A History of English Law, W.S.Holdsworth, Vol. I, pp. 558-59, referred to. 6. The provision contained in section 6 of the Admiralty Court Act, 1861 limiting the jurisdiction of the Admiralty Court to claims respecting , inward cargo was discarded by the Administration of Justice Act, 1920 H 1008 SUPREME COURT REPORTS [1992] 1 S.C.R. A which extended the jurisdiction of the High Court to (a) any claim arising 'r' out or an agreement relating to the use or hire of a ship; (b) any claim relating to the carriage of goods in any ship, and (c) any claim in tort In respect of goods carried in any ship. The Act thus applied to both inward B and outward cargoes. [1034B, CJ 7. The vital significance and the distinguishing feature of an admiralty action in rem is that this jurisdiction can be assumed by the coastal authorities in respect of any maritime claim by arrest of the ship, irrespective of the nationality of the ship or that of its owners, or the place of business or domicile or residence or its owners .or the place where the C cause of action arose wholly or in part. [1038E-F] The Fehmam, (1958) I All E.R. 333, referred to . . lialsb11ry, op. cit. 4th Ed. Vol. I (l)para 309; D.C. Jackson, Enforcement of Maritime Claims, (1985); Gilmore and Black, The Law of AdmiralD ty, p. l; T71e Law of America/I Admiralty, 6th Ed. Vol. I p.3; Rescoe's Admiralty Practice, 5th Ed. p. 29, referred to. 8. It is within the competence or the appropriate Indian Courts to deal, In accordance with the general principles or maritime law and the applicable provisions of statutory law, with all persons and things found E within their jurisdiction. The power of the court Is plenary and unlimited unless it Is expressly or by necessary implication curtailed. All remedies which are available to the courts to administer justice are available to a claimant against a foreign ship and its owner found within the jurisdiction of the concerned High Court. This power of the court to render justice r must necessarily include the power to make interlocutory orders for arrest and attachment before judgment. [1046B-D] T7te Bold Buccleaugh, [1851) 7 Moo. PC 267; T71e Jade, (1976) I All. E.R. 921, 923; Cunie v. M.Knigl1t, (1897) AC 97; Bardot & Anr. v. T71e America/I Ship or Vessel Augusta, 1873 (x) Bombay High Court Reports, G 110, referred to. H Enforcement of Maritime Claims, 1985 p. 9; Halsbury's Laws of England, 4th Ed. Vol. I p. 375; Halsbury's Laws of E11gland, Vol. I, para 307; referred to. 9. The High Courts in India are superior courts of record. They have r ELISABETH v. HAR WAN INVESTMENT 1009 original and appellate jurisdiction. They have inherent and plenary powers. A Unless expressly or impliedly barred, and subject to the appellate or discretionary jurisdiction of this Court, the High Courts have unlimited jurisdiction, including the jurisdiction to determine their own powers. [1046D-E] Naresh Shridhar Mirajkar & Ors. v. State of Maharashtra & Anr., (1966] 3 SCR 744, relied on. Raja Soap Factory and Ors. v. S.P. Shantharaj and Ors., [1965] 2 SCR 800, distinguished. B Halsbury's Laws of England, 4th Ed. Vol. 10, para 713, referred to. C 10. In the instant case, the Andhra Pradesh High Court, as a successor to the Madras High Court, is vested with all the appellate and original jurisdiction, including admiralty jurisdiction to order the arrest and detention of a ship. [1047 A-BJ 11. In equating the admiralty jurisdiction of the Indian High Court to that of the English High Court, the Colonial Court of Admiralty Act, 1890 significantly refers to the admiralty jurisdiction of the High Court in Engl.and 'whether existing by virtue of any statute or otherwise'. This is D an enabling statute, and not a statute of limitation of power. It aids, and E does not fetter, the growth of jurisdiction. There is no reason why the words 'statute or otherwise' should be so construed as to exclude the various sources from which the admiralty jurisdiction in England developed. Apart from statutes, the powers of that Court were derived from custom and practice and the principles developed by common law and equity as well as by the generally recognised principles of civil law F developed and practised in Europe. There is no reason why those prin· ciples should also not be drawn upon to enrich and strengthen the ,jurisprudence of this country, even if' the jurisdiction or our courts were to be, by compulsions of history, considered to be curtailed and dovetailed to the colonial past - a proposition which is neither correct nor consistent G with our status as a sovereign republic. It is time to take a fresh look at the old precedents. [10470-H; 1048A] Delhi Judicial Service Association, Tis Hazari Court, Delhi v. State of Gujarat & Ors. JT 1991 (3) SC 617; S.P. Gupta v. Union of India, (1982) 2 SCR 365, relied on. H A B 1010 SUPREME COURT REPORTS (1992] l S.C.R. 12. It is well recognised in international law that a merchant ship, though generally governed by the laws of the flag State, subjects itself to the jurisdiction of a foreign State as it enters its waters. The Geneva Convention on the Territorial Sea and the Contiguous Zone, 1958 and the Law of the Sea Convention, 1982 affirm that the sovereignty of a State extends over its internal and territorial waters. (10480) The Schooner Exchange v. M. Faddon & Ors., (1812) 11 U.S. (7 Cranch) 114, 143, referred to. Nagendra Singh, /ntemationa/ Maritime Law Conrentions, British C Shipping Laws; Benedict, Tile Law of American Admiralty, 6th Ed. pp. 121 & 122, referred to. D 13. Coastal States are entitled to assume jurisdiction in respect of maritime claims against foreign merchant ships lying in their waters. These ships are liable to be arrested and detained for the enforcement of maritime claims. The courts of the country in which a foreign ship has been arrested may determine the cases according to merits, provided they are empowered to do so by the domestic law of the country or in any of the cases recognised by the International Convention relating to the Arrest of Seagoing Ships, Brussels, 1952. The maritime claims in respect of which E the power of arrest is recognised in law include claims relating to damage caused by any ship either in collision or otherwise; claims relating to carriage of goods in any ship whether by charterparty or otherwise, loss of or damage to goods etc. These principles of international law, as generally recognised by nations, leave no doubt that, subject to the local F laws regulating the competence of courts, all foreign ships lying within the waters of a State, including waters in ports, harbours, roadsteads and the territorial w-.iters, subject themselves to the jurisdiction of the local authorities in respect of maritime claims and they are liable to be arrested for the enforcement of such claims. [1049C-F] G 14. In the absence of any statute in India comparable to the English statutes on admiralty jurisdiction, there is no reason why the words 'damage caused by a ship' appearing in section 443 of the Merchant Shipping Act, 1958 should be so narrowly construed as to limit them to physical damage and exclude any other damage arising by reason of the H operation of the vessel in connection with the l'llrriage of goods. The -. ELISABETH v. IIARWAN INVESTMENT 1011 expression is wide enough to include all maritime questions or claims. If A goods or other property are lost or damaged, whether by physical contact or otherwise, by rellson of unauthorised acts or negligent conduct on the part of the shipowner or his agents or servants, wherever the cause of action has arisen, or wherever the ship is registered, or wherever the owner has his residence or domicile or place of business, such a ship, at the request of the person aggrieved, is liable to be detained when found within Indian jurisdiction by recourse to sections 443 and 444 of the Merchant Shipping Act, 1958 read with the appropriate rules of practice and procedure of the High Court. These procedural provisions are but tools for enforcement of substantive rights which are rooted in general principles of law, apart from statutes, and for the enforcement of which a party aggrieved has a right to invoke the inherent jurisdiction of a superior court. [1054G; 1055A-D] Victoria, 1887 12 PD l(}S; The Vera Cntz, (1884) 9 PD 96; Cume v. M. Kniglrt, (1897) AC 97; 77ie Jade, (1976) 1 All. E.R. 9?0, referred to. Ha/sbll!y's Laws of E11g/a11d, 4th Ed. Vol. 1(1), para 319 N. 12, referred to. 15. The Merchant Shipping Act empowers the concerned High Court to arrest a ship in respect of a substantive right. A right conferred by the Indian Carriage of' Goods by Sea Act, 1925 in respect ofoutwardcargo is one of those rights which can be enforced by arrest and detention or the foreign ship in order to found jurisdiction over the vessel and its owners, Just as it can be done in respect of inward cargo by reason of the substantive rights conferred by the Admiralty Court Act, 1861 read with the Colonial Courts or Admiralty Act, 1890, and other rules of law. The same principle must hold good for carriage under a charterparty. These and other laws, such as the B c D E F law or contract, tort, crime, mortgage, marine insurance, customs, port operations, etc. and the Civil and Criminal Procedure Codes as well as the relevant rules Vested with admiralty jurisdiction to order the arrest or the vessel in respect of a cause of action relating to outward cargo because section 6 of the Admiralty Court Act, 1861 (read with the Colonial Courts of Admiralty Act, 1890) conferring admiralty jurisdiction on Indian High Courts confined it to 'claims for damage to cargo imported'. In the instant case, the appellant-vessel was G lying in the port of Vishakapatnam when she was arrested in respect of a cause of action relating to cargo. The High Court, therefore, rightly assumed jurisdiction by the arrest of the vessel while it was lying in the port of Vishakapatnam, as the High Court possesses jurisdiction over claims relating to Inward and outward cargo. [10618-EJ H 1014 SUPREME COURT REPORTS [1992] 1 S.C.R. A (PER SAHA!. J. CONCURRING); B 1.1. The Law of Admiralty progressed gradually from ordinary courts, to courts or Admiralty and ultimately to High Court commencing in commercial expedience, equity and justice and ending with statutory enactments covering entire field from collision on ships to cargo even. All this was existing when the 1890 Act was enacted. But the statutes or 1840 and 1861 were not exhaustive and English courts could take cognizance for various \\Tongs either in tort or contract. Therefore when colonial courts were conferred jurisdiction it was not restricted or confined to r statutes, as the power was being conferred on High Courts which were, ;c C then and even now, not only courts of unlimited civil jurisdiction but higher courts possessed or every jurisdiction which was not expressly or impliedly conferred on other courts. The word 'otherwise' literally means in a different way. Effect or its use in the 1890 Act in law, was to confer not only statutory jurisdiction possessed or by English courts D but all that which was being exercised or was capable of being exercised either under custom and practice or for sake or equity and justice. The deliberate expansion of power and jurisdiction after existence of two statutes for nearly thirty years was founded on experience and necessity or arming the courts for every dispute that could arise relating to Admiralty jurisdiction, as the law on Admiralty was a growing law. Its E development could not be stiffied by its very nature. It was with this. intention that the Parliament used the word, 'otherwise' in 1890 Act. No word in a statute has to be construed as surplusage. Nor it can be rendered ineffective or purposeless. Courts are required to carry out the legislative intent fully and completely. The two legislations of 1840 and 1861 took care of those actions which appeared to be settled till then. But they did F not close the door for the· growth of law. They were enacted to 'improve the Admiralty practice' as the jurisdiction which were conferred by the statutes were already being exercised. Action in persona111 or rein were not unknown. It was provided statutory base only. Statutes till 1920 in England were not creation of ne'v rights but recognition of what was existing by G practice or custom. Thus, the jurisdiction to entertain a claim for tort or breach of contract by owner or master of ship while carrying cargo outside the port could be exercised or was capable of being exercised in 1890 by the High Court of England if occasion·arose. [1066E-H; 1067A-F) 1.2. The rationale of extending jurisdiction in Admiralty over cargo H carried into the port has been the existence of a right in owner or consignee • • r ELISABETH v. HARWAN INVESTMENT 1015 , arising out or contract or agreement entered into between him and the A master or owner or the ship. It was the enforcement or the right which was sareguarded by providing a remedy to arrest a ship ff the goods were carried into any port. Same rationale applies to redress the owner or bill of lading if the master of the ship in breach of agreement entered into any port committed tort by acting against it in course of outward journey. Such breach would have been actionable and a suit could be filed in the court B where agreement was entered. Basis of Maritime Law has been necessity to provide remedy for wrong done on high seas. Inclusion or expansion of jurisdiction was in relation to any cause which could have been cognisable under ordinary law. Bottomrey, salvage, seaman wages or towage are all causes for which action could be brought in court of law but their enforceC men! was rendered illusory with disappearance of the person beyond territorial waters. To overcome this dilliculty jurisdiction was created making it actionable against person and finally the res itself. What was basic was the existence of cause of action, arising out of tort or contract in relation to the master or owner of the ship. Applying this test, the cause of action arose D in Indian territory and if the owner of the ship would have remained in this country a suit for breach of contract could have been filed. Therefore the owner of bill of lading was not precluded from approaching the Admiralty Court for redress when the foreign ship which was guilty ·Of violations appeared in Indian waters. On this construction the colonial courts could exercise the jurisdiction in respect of cargo going outside the port in exercise E of jurisdiction under the Act of 1890 not on statutes but as the High Court of England could exercise such power. [1067F-H; 1068A-D) Yuri Mani; 1927 Appeal cases 906, distinguished. State of Madras v. CC.Menon & Ors., [1955) I SCR 280, referred to. The Bold Buccleugh. (1851] 7 Moo. P.C. 267: The Hailey, L.R. 2 PC 193; The Ironsides, 167 English Reports 205; T11e St. Cloud, 167 English Reports 269; Tlze Nonvay, 167 English Reports 347; The Hercules, 2 Dod. 371; Tlie Jade, [1976] I All Eng. Reports 921, referred to. Halsbury's Laws of England, 4th Ed., Vol. I: Maritime Liens by D.R. Thomas; Maritime Law by Christopher Hill; Carter History of English Courts, referred to. F G 2. Without entering into any comparative study of jurisdiction of High H 1016 SUPREME COURT REPORTS [1992] 1 S.C.R. A court of England and the High Courts in our country, the one basic diff~rence that exists today is that the English Courts derive their creation, constitution and jurisdiction from Administration of Justice Act or Supreme Court Act but the High Courts in our country are established under the Constitution. Under it, Article 225 preserved the jurisdiction, B c including inherent jurisdiction, which existed on the date the Constitution came into force and Article 226 enlarged it by making it not only a custodian of fundamental rights ofa citizen but as repository of power to reach its arms to do justice. A citizen carrying on business which is fundamental right cannot be rendered helpless on premise that the jurisdiction of High Courts stood frozen either under statute of England or any custom or practice prevailing there or the High Court of England cannot exercise the jurisdiction. A citizen of an independent republic cannot be left high and dry. The construction of law has to be in consonance with sovereignty of a state. The apprehension that assumption of such jurisdiction would be on general attributes of sovereignty is not well founded. This coupled with expansive D jurisdiction that the High Courts enjoyed in relation to Admiralty under the 1890 Act preserved under Article 225 of the Constitution provided justification for direction to arrest the ship, for the tortious act done by master or owner of the ship in respect of goods carried outside the port even if there was no specific provision like Section 6 ol' the 1861 Act. Entertaining a claim arising out of breach of contract in relation to cargo taken out of any Indian E port pertains to jurisdiction. It must arise out of Statute. But the power to direct arrest of a ship in exercise of .the jursidiction is one relating to competency. The High .Courts in India being courts of unlimited jurisdiction, repository of all judicial powers under the Constitution except what is excluded are competent to issue directions for arrest of foreign ship in F exercise of statutory jurisdiction or even otherwise to effectuate the exercise of jurisdiction. [l069F-H; 1070A-F) 3. In the instant case, since the jurisdiction to entertain a suit on tort or contract in relation to cargo going out of the country in a ship is found to exist under 1890 Act, the High Court of Andhra Pradesh was G competent to direct arrest of the foreign ship when it appeared in Indian waters. [1070F-G] 4. In respect of Colonial Courts of Admiralty Act the Law Commission recommended that the necessary substantive provisions of the H English Statute may be incorporated into the Act so as to make it the .. ELISABETH"· HAR WAN INVESTMENT [THOMMEN, J.] 1017 comprehensive Indian law relating to courts of admiralty. Neither the law A was made up-to- date and brought in line with international conventions on maritime law passed in 1952 etc. nor even the salient features of English law as amended by Administration of Justice Act, 1920, and 1956 were adopted. And rights and interests of citizen of the independent sovereign state continue lo be governed by legislations enacted for colonies by the British Parliament. Various provisions in the 1890 Act have been rendered not only a_nomalous but even derogatory to the sovereignty of the State. It is hoped that the unfortunate state of affairs shall be brought to end at the earliest. [1062E-G] B CIVIL APPELLATE JURISDICTION: Civil Appeal No. 896of1992.. C WITH T.C. No. 27 of 1987, From the Judgment and Order dated 26.4.1985 of the Andhra Pradesh High Court in 0.S. Appeal No. 2 of 1984. D Raju Ramachandran and Jagan Mohan Rao for the Appellants. G.L. Sanghi, S.K. Mehta, Dhruv Mehta, Aman Vachher and Arvind Verma for the Respondents. The Judgment of the Court was delivered by TH OMMEN, J. We grant leave in SLP(C) No. 10542 of 1985 which arises from the order of the Division Bench of the Andhra Pradesh High Court affirming the finding of the learned Single Judge that the respondent's suit against the appellants was maintainable and that the High Court was competent to try the same in exercise of its admiralty jurisdicr lion. The Transferred Case No. 27 of 1987 is the appeal filed by defendants 1 and 2 against the judgment of the learned Single Judge of the Andhra Pradesh High Court decreeing the suit. The case stood transferred to this Court pursuant to this Court's Order dated 25.11.1986. By our Order dated August 28, 1991 we allowed Civil Appeal No. 3392 of 1991 filed by the 3rd defendant against the order of the High Court dismissing its petition for condonation of delay in presenting O.S.A.S.R. No. 39789 of 1988 in the High Court. We held that the appeal filed by the 3rd defendant had to be heard on the merits particularly on the question E F G r of law regarding the liability of the agent. H A B c D E F 1018 SUPREME COURT REPORTS [1992] 1 S.C.R. We shall now deal with the appeal arising from SLP ( C) No. 10542 of 1985 where the only question is whether the learned Judges of the l:ligh Court have rightly held that the respondent's suit was maintainable in respect'of a cause of action alleged to have arisen on or after 1.2.1984 when the vessel, M.V. Elisabeth, was lying in the Port of Marmagao;·on 8.2.1984 when the vessel left the Port without issuing bills of lading or other documents for the goods shipped as required by the plaintiff-shipper; and, subsequently when the goods were discharged and handed over to the consignee at the p~rt of destination at Ras-Al-Khaimah, United Arab Emirates during the period from 13.2.84 to 19.2.84, notwithstanding the direction of the plaintiff not to deliver the goods by reason of the buyer's failure to pay the agreed price. The 1st defendant, M. V. Elisabeth, is a vessel of foreign nationality and it is owned by the 2nd defendant which is a foreign company carrying on business in Greece, and the 3rd defendant is stated to be the local agent of the 2nd defendant at Goa. The Plaintiff is a private limited company having its registered office in Goa. The case of the plaintiff is that the defendants acted in "breach of duty" by leaving the port of Marmagao on 8.2.84 and delivering the goods to the consignee in. breach of the plaintiffs directions to the contrary, thereby committing conversion of the goods entrusted with them. The suit was instituted in Andhra Pradesh High Court invoking its admiralty jurisdiction by means of an action in reni. The vessel was arrested when it entered the Port of Vishakhapatnam on 13.4.84 after returning from foreign ports. On the owner of the vessel entering appearance and providing security by furnishing a Bank Guarantee under protest in the sum of Rs. 14,25,000 the vessel was released from detention. The defendants moved an application in the High Court raising a -1 preliminary objection to the jurisdiction of that Court. They contended • that the plaintiffs suit against a foreign ship owned by a foreign company not having a place of residence or business in India was not liable to be ~ proceeded against on the admiralty side of the High Court by an action in G rem in respect of a cause of action alleged to have arisen by reason of a tort or a breach of obligation arising from the carriage of goods from a port in India to a foreign port. They did not, however, contend that the alleged cause of action not having arisen in Andhra Pradesh. the suit ought not to have been filed in Andhra Pradesh. Their sole contention on the question H of jurisdiction was as regards the lack of admiralty jurisdiction of any court ·1 ) ELISABETH v. HAR WAN INVESTMENT [THOMMEN, J.) 1019 in' Andhra Pradesh or any other State in India to proceed in rem against. A the ship on th.e alleged cause of action concerning carriage of goods from an Indian port to a foreign port. The preliminary objection was overruled by the learned Single Ju.dge and his order was confirmed by the learned Judges of the Division Bench by their order which is challenged in S.L.P.(C) No.10542 of 1985. The suit was finally decreed by I he learned . B Single Judge and appeal therefrom is the subject-matter of the case· transferred to this Court. The crucial question for our consideration is, thcrcfo.rc, the dispul.c about jurisdiction. If that question were to be answered in favour of the defendants, it would be unnecessary to express any \1cw on the merits of · C ·the Tmnsferred Case, for the.· suit itself would then stand dismissed. Mr. Raju Ramachandran, appearing for the appellants (defendants), raises a fundamental objection as to the assumption of admiralty jurisdiction over a ·foreign ship in respect of a claim ·arising in connection with the D carriage of,goods from an Indian port to a .p\lTt outside lnd.ia. The High . Court, h_c says, oidered the arrest ci( the vCssel in purported_ exercise of its jurisdiction Qn. the admiralty. side.