Holding

The Calcutta High Court has jurisdiction to try the suit; the forum‑selection clause does not oust its jurisdiction, the plaint discloses a cause of action, and the defendants have not made out a case for a stay of proceedings.

Summary

Mayar (HK) Ltd. and other plaintiffs filed an admiralty suit in the Calcutta High Court alleging that the carrier, Trustrade Enterprises PTE Ltd., failed to deliver 456 timber logs that were to be shipped on the deck of the vessel M.V. Fortune Express from Malaysia to Calcutta. The defendants argued that the Bill of Lading contained a forum‑selection clause (Clause 3) conferring exclusive jurisdiction on the Singapore courts and that Clause 9 excluded liability for loss of deck cargo, seeking a permanent stay of the suit under Order VII Rule 11 of the CPC. The Division Bench of the High Court granted the stay, holding that the forum‑selection clause barred the Calcutta Court and that the plaintiffs had suppressed material facts. On appeal, the Supreme Court held that the plaint disclosed a cause of action, that the High Court could not reject the suit under Order VII Rule 11, and that the defendants had not made out a case for a stay of proceedings. Consequently, the Supreme Court set aside the stay order, allowed the appeal, and ordered the suit to proceed in the Calcutta High Court.

Issues considered

The plaintiff’s suit discloses a cause of action under the Charter Party and Bills of Lading.
Whether the forum‑selection clause in the Bill of Lading ousts the jurisdiction of the Calcutta High Court in favour of Singapore courts.
Whether Clause 9 of the Bill of Lading excludes liability for loss of deck cargo.
Whether the defendants could obtain a permanent stay of the suit under Order VII Rule 11, Section 10, or the inherent power of the court.
Whether the plaintiffs suppressed material facts, warranting dismissal or stay of the suit.

Legislation cited

Carriage of Goods by Sea Act, 1925s. 2, s. Article III (6)
Code of Civil Procedure, 1908s. Order VII Rule 11, s. Order VI Rule 2, s. Section 10

Subjects

Admiralty suitJurisdictionForum selection clauseOrder VII Rule 11Stay of proceedingsDeck cargoIndian Carriage of Goods by Sea ActBill of LadingSuppression of material factsLimitation period

Judgment

A MA YAR (H.K.) LTD. AND ORS.
v.
OWNERS & PARTIES, VESSEL M.V. FORTUNE EXPRESS AND ORS.

JANUARY 30, 2006

B [RUMA PAL AND P.P. NAOLEKAR, JJ.]

(
Admiralty Suit·-lndian Carriage of Goods by Sea Act, 1925--Section
2 and Schedule to the Act-~ivil Procedure Code 1908-0rder VII Rule //,
Order V Rule 2. Section JO-Power of High Court to grant stay--Charter
C Party Agreement between plaintiff and defendant company---Defendant
agreeing to carry on board the vessel a quantity of limber logs from various
ports of Malaysia to Calcutta Port--Out of 642 logs, 5 78 Jogs lying on deck
of the vessel and described as deck cargo in BOL-At Calcutta Port short
landing of 456 logs lying on deck-Plaintifffiling admiralty suit in the High
D Court at Ca/cul/a alleging breach of Charter Party Agreement by failing and
neglecting to carry on board the vessel the agreed quuntity of logs--Single
Judge directing arrest of the vessel--Subsequent direction to release vessel
on PNB submilling /el/er of intent for furnishing the hank guarantee-
Defendants filing application under Order VII, Rule 11 for dismissal of suit
in Iimine alleging that Calcul/a Court has no jurisdiclion to entertain the
E suit and that the suit does not disclose any cause of action-Single Judge
dismissing the application--Division Bench granting permanent stay of the
suit and held that under the forum selection clause the Singapore Court
alone has jurisdiction to entertain the suit-Allowing the appeal, held that
since the defendant had not made out a case for stay of proceedings of the
F Admiralty Suit, the High Court erred in passing an order ofpermanent stay-
However, High Court was justified in holding thG: the powers under Order
VII. Rule 11 could not be exercised for rejection of suit.

Admiralty Suit--Civil Procedure Code-Order VII. Rule 11 and Section
10--rejection of plaint-Scope of power--Court has to read the entire plaint
G as a whole to find out whether it discloses a cause of action-··Plainl cannot
be rejected on the basis of allegalions made by the defendant- -As avermenls
made in the plaint do disclose the cause of action, the High Court \fas rig/11
in holding that powers under Order VII, Rule 11 could not be exercised for
rejection of suil.

H 860
MAY AR (HK) LTD.•·. OWNERS & PARTIES, VESSEL M.V. FORTUNE EXPRESS 86 J

Admiralty Suit-Civil Procedure Code 1908, Order VII, Rule //- A
Calcutta High Court (Original Side) Rule, admiralty rules 3, 4, 6, 27-
Jurisdiction-Admiralty Suit claiming damages for short delivery of cargo-
Defendant taking the plea of exclusion ofjurisdiction under Forum selection
clause in the agreement between the parties-No reference to the said clause
in the plaintiff's pleading-Whether it is a case of suppression of material
facts-Held, it cannot be considered a case of suppression and the question B
of jurisdiction ought to be adjudicated on the basis of the material placed
\ on record at the trial.

Civil Procedure Code, Order VI, Rule 2-Admiralty Suit-Pleadings-
Materia/ facts-Material facts are the facts on which a party relies for his C
claim or defence-Plaintiff has to plead the facts on which he relies to prove
his case and it is for defendant to plead the facts on which his defence
stands-Plaintiff not required to plead facts on which defendant's defence
stands.

Exclusion Clause-Civil Procedure Code 1908, Order VI, Rule 2- ffi
When the Court has to decide question ofjurisdiction pursuant to an ouster
clause it is necessary to construe ii properly to see whether there is ouster
ofjurisdiction of other Courts-When the clause is clear, unambiguous and
specified, accepted notions of contract would bind the parties-Unless the
absence of ad idem can be shown, other courts should avoid exercising
jurisdiction. F
Civil Procedure Code 1908, Order VI, Rule 2-Admiralty Suit-Stay of
suit on the ground ofabuse of the process-Held defendant would be required
to show very strong case in his favour-The power could be exercised by the
court only if the defendant is able to show that the impugned action is F
frivolous, vexatious or is taken simply to harass the defendant or where there
is no cause of action in law or in equity.

Indian carriage of Goods by Sea Act, 1925-Article Ill clause (6),
Section 2-Limitation-Forum non convenience-Transportation of goods
by sea in ships from Malaysia to Calcutta port-Short landing of goods at G
Calcutta Port-Filing of Admiralty Suit in the High Court at Calcutta-
Defendant 's plea for stay of proceedings on the ground of Forum non
', convenience-Plaintiff's plea that if plaint now require to be filed in
Singapore, it would be barred by /imitation-Held, as the goods were not
carried from any port in India, provisions of the Act will have no application
for the purposes of limitation-However, there is no substance on record to H
862 SUPREME COURT REPORTS (2006 J I S.C.R.

A show that there is other Farum having jurisdiction in which the case may be
tried more suitably for the interest of all the parties and for ends ofjustice.

Plaintiff is a company incorporated in Hong Kong and engaged in the
business of export and import of timber logs. Defendant is a company
incorporated in Singai>ore and carrying on shipping business. Defendant
B agreed to carry on board a quantity of timber logs from different ports of
Malaysia to Calcutta port for sale to various buyers in West Bengal, India.
As per stowage plan of the vessel, out of 642 logs, the subject matter of bills
of lading, which were loaded on board the vessel, 578 logs were lying on deck
of the vessel. At the time of discharge of cargo at Calcutta, it was found that
C 456 logs out of 578 logs which were lying on the deck were missing and had
been short landed. Plaintiff filed admiralty suit in the High Court at Calcutta
in admiralty jurisdiction alleging breach of Charter Party Agreement on the
part of defendant by failing and neglecting to carry on board the vessel the
agreed quantity of logs. Plaintiff also prayed for arrest of vessel along with
her tackle, apparel and furniture.
D
Single Judge of the High Court directed arrest of the vessel granting
liberty to defendant for release of the vessel on furnishing a bank guarantee.
The vessel was directed to be released on PNB submitting a letter of intent
for furnishing the said bank guarantee. Defendant filed an application under
Order VII, Rule 11, CPC alleging that Calcutta High Court has no jurisdiction
E to entertain the suit and the suit does not disclose any cause of action as
liability for deck cargo was excluded by clause 9 of BOL. Single Judge
dismissed the application. On appeal, Division Bench of the High Court granted
permanent stay of the suit and directed discharge of the bank guarantee
holding that under the forum selection clause the Singapore Court alone will
F have jurisdiction to entertain the suit. It was also held that the goods lost
being the deck cargo, the carrier ship has no liability as per clause 9 of BOL
and plaintiffs made abuse of the process of the court by not pleading clause 3
and 9 in their suit. Appeal is preferred to this Court by the plaintiff.

Allowing the appeal, the Court
G
HELD : I. I Under Order VII Rule 11 of the Code, the Court has
jurisdiction to reject the plaint where it does not disclose a cause of action,
where the relief claimed is undervalued and the valuation is not corrected
within a time as fixed by the Court, where insufficient court fee is paid and
the additional court fee is not supplied within the period given by the Court,
H and where. the suit appears from the statement in the plaint to be barred by
MAY AR (H.K.) LTD.,. OWNERS & PARTIES, VESSEL M.V. FORTUNEEXPRESS 863

any law. 1874-C, DI A
1.2. The plaint cannot be rejected on the basis of the allegations made
by the defendant in his written statement or in an application for rejection of
the plaint The Court has to read the entire plaint as a whole to find out whether
it discloses a cause of action and if it does, then the plaint cannot be rejected
by the Court exercising the powers under Order VII Rule 11 of the Code. B
Essentially, whether the plaint discloses a cause of action, is a question of
\ fact which has to be gathered on the basis of averments made in the plaint in
its entirety taking those averments to be correct A cause of action is a bundle
of facts which are required to be proved for obtaining relief and for the said
purpose, the material facts are required to be stated but not the evidence except C
in certain cases where the pleadings relied on are in regard to
misrepresentation, fraud, willful default, undue influence or of the same
nature. So long as the plaint discloses some cause of action which requires
determination by.the court, mere fact that in the opinion of the Judge the
plaintiff may not succeed cannot be a ground for rejection of the plaint In the
present case, the averments made in the plaint do disclose the cause of action D
and, therefore, the High Court has rightly said that the powers under Order
VII Rule 11 of the Code cannot be exercised for rejection of the suit filed by
the plaintiff-appellants. [875-F-H; 876-Al

1.3. Similarly, the court could not have taken the aid of section 10 of
the code for stay of the suit as there is no previously instituted suit pending E
in a competent court between the parties raising directly and substantially
the same issues as raised in the present suit. (876-B)

Chillaranjan Mukherji v. Barhoo Mahto, AIR (1953) SC 472, Bhagat
Singh Bugga v. DewanJagbir Sawhney, 28 AIR (1941) Cal 670, Hansraj Bajaj F
v. Indian Overseas Bank Ltd., AIR (1956) Cal 33, Krishnan and Anr. v.
Krishnamurthi and Ors., AIR (1982) Madras 101, Mis Crescent Petroleum
Ltd. v. "MONCHEGORSK" and Anr., AIR (2000) Born 161, referred to.

T. Arivandandam v. T. V. Satyapal and Anr., (19771 4 SCC 467, Roop
Lal Sethi v. Nachhattar Singh Gill, 119821 3 SCC 487, ITC Ltd. v. Debts G
Recovery Appellate Tribunal, 11998(·2 SCC 70, Saleem Bhai and Ors. v. State
of Maharashtra and Ors., 12003( I SCC 557 and Popat and Kotecha Property
v. State Bank of India Staff Association, [2005( 7 SCC 510, relied upon.

2. As per law of pleadings under Order VI Rule 2 of the Code, every
pleading should contain, and contain only, a statement in a concise form of H
864 SUPRE\1E COURT REPORTS 12006] l S.C.R.

A the material facts on which the party relies for his claim or defence, as the
case may be. Thus, the facts on which the plaintiff relies <o prove his case
have to be pleaded by him. Similarly, it is for the defendant to plead the material
facts on which his defence stands. The expression 'material facts' has not·
been defined anywhere, but from the wordings of Order VI Rule 2 the material
facts would be, upon which a party relies for his claim or defence. The material
B facts are facts upon which the plaintifrs cause of action or defendant's defence
depends and the facts which must be proved in order to establish the plaintifrs
right to the relief claimed in the plaint or the defendant's defence in the written
statement Which particular fact is a material fact and is required to be pleaded
by a party, would depend on the facts and circumstances of each case. As per
C the plaintifrs allegation, the logs, which were to be carried on the vessel
owned by the defendants, had not been delivered at the port of destination. Thus,
all the material facts on the basis of which the plaintiffs claimed the decree
are alleged in the plaint. For the purpose of the cause of action, it was not
necessary for the plaintiffs to plead the ouster of the jurisdiction of the
Calcutta Court. Therefore, absence of reference of Clause 3 of BOL in the
D pleadings cannot be said to be suppression of the material fact as the question
of jurisdiction would be required to be adjudicated and decided on the basis of
the material placed on record at the trial.
[879-F-H; 880-A; 880-G-H; 881-A; 881-Df

2.2. Similarly under Clause 9 of BOL, the carrier was not made liable
E for any loss or damage resulting from any act, neglect or default of his
servants in the management of animals and deck cargo. Under this clause,
the carrier is excluded from making good any loss or damage to the deck
cargo which has resulted from any act, neglect or default of his servants who
are in the management of such deck cargo. The facts are not yet on record
F that the loss or damage to the deck cargo was the result of any act, neglect or
default of the carrier's servants who were in the management of the deck
cargo. In fact, this would be the defence if at all to be raised by the defendants
in their written statement. It was not at all required for the plaintiffs to
introduce this clause in their plaint. The liability of the defendants to pay or
not to pay any loss or damages to the cargo, would depend on proof of certain
G necessary facts which could only be adjudicated upon at the trial of the suit.
(881-G, H; 882-A, BJ

A.B.C.laminart Pvt. ltd. v. A.P.Agencies Salem, [1989( 2 SCCl63;
S.JS.Business Enterprises v. State of Bihar, (2004) 7 SCC 166 and R. v.
H General Commrs. for the purposes of the Income Tax Act for the District of
\
\-·
!

MA VAR (H.K.) LTD.''· OWNERS & PARTIES. VESSEL MV. FORTUNE EXPRESS 865

Kensington, (1917) 1KB 486, referred to. A
3. When the court has to decide the question of jurisdiction pursuant
to an ouster clause, it is necessary to construe the ousting expression or
clause properly to see whether there is ouster of jurisdiction of other courts.
When the clause is clear, unambiguous and specific accepted notions of
contract would bind the parties and unless the absence of ad idem can be B
shown, the other courts should avoid exercising jurisdiction. As regards
construction of the ouster clause when words like 'alone', 'only', 'exclusive'
and the like have been used, there may be no difficulty. Even without such
words in appropriate cases, the maxim 'expressio unius est exc/usio a/terius'
- expression of one is the exclusion of another-may be applied. What is an C
appropriate case shall depend on the facts of the case. In such a case, mention
of one thing may imply exclusion of another. When certain jurisdiction is
specified in a contract, an intention to exclude all others from its operation
may in such cases be inferred. It has, therefore, to be properly construed.
(880-C-EI
D
4. The question whether the cargo transported by the carrier would be
governed by the Hague Rules on account of Clause 2 (General Paramount
Clause) or by Clause 9 ofBOL would be a question required to be determined
by the Court after parties placed all material evidence before it and cou Id not
have been decided by the Division Bench at preliminary stage. Without there
b-eing material on record, Clause 19 cannot be relied upon for absolving the E
Carrier from his liability for any damage or loss caused to the goods carried
on ship. (883-8, Fl

5. The power of the court restraining the proceedings are to be exercised
sparingly or only in exceptional cases. The stay of proceedings is a serious F
interruption in the right, that a party has to proceed with the trial to get it to
its legitimate end according to substantive merit of his case. The court to
exercise the power to stay the proceedings has to keep in mind that the positive
case has been made out by the defendant whereby the court can reach to the
conclusion that proceedings, however, indicate an abuse of the process of Court.
The power would be exercised by the Court if defendant could show to the G
court that the action impugned is frivolous, vexatious or is taken simply to
harass the defendant or where there is no cause of action in law or in equity.
(884-D-F, C(
6. Under Clause (6) of Article III,.ofthe Schedule to Indian Carriage of
Goods by Sea Act, I 925, one year period was provided to file a suit against H
866 SUPREME CO!JRT REPORTS [200611 S.C.R.

A the carrier or the ship for loss or damages which, by amendment in 1993,
has been extended to further period of thrc-e months if allowable by the court
and can also be extended for a period till the filing of the suit if the parties to
the suit agree after the cause of action has arisen. Under Article I of the
Schedule, 'goods' are defined and as per the substitution brought about by
Act No.44 of 2000, the goods shall include any property including live animals
B as well as containers, pallets or similar articles of transport or packaging
supplied by the consignor, irrespective of whether such property is to be or is
carried on or under the deck. By the amended definition, the deck cargo is
also included in the definition of goods provided the deck cargo is in the form
of containers, pallets or similar articles of transport or packaging supplied
C by the consignor. Therefore, the goods transported on a carriage, even if it is
a deck cargo, could be subject to the limitation as provided in Clause (6) of
Article III, but for Section 2 of the Act which specifies that subject to the
provisions of the Act, the rules set out in the Schedule shall have the effect
in relation to and in connection with the carriage of goods by sea in ships
carrying goods from any port in India to any other port whether in India or
D outside India. To apply the provisions of the Act and the Schedule there under,
the goods should be carried by sea in a ship from any port in India to any
other port in India or outside India. In the present case, admittedly, the goods
in question were carried on the ship from Malaysia for discharge at Calcutta.
The goods having not been carried from any port in India, Clause (6) of Article
E III of the Schedule and the provisions of the Act will have no application for
the purpose of limitation. Therefore, it cannot be said that by virtue of the
Act, the suit would be barred by limitation if the plaint is required to be
presented in the Singapore Court. 1885-C-HI

Smith Kline &French laboratories ltd v. Bloch, 119831 2 All ER 72
F and Spiliada Maritime Corp v. Cansu/ex ltd., [198613 All ER 843, referred
to.

7. The principal place of business would be where the governing power
of the corporation is exercised or the place ofa corporation's Chief Executive
Officers, which is typically viewed as the nerve center or the place designated
G as the principal place of busine~s of the corporation in its incorporation under
the various statute~. Therefore, to arrive at a finding as to which is the
princip1JI place of business, the parties would be required to place the relevant
material before the Court. The Court cannot arrive at a finding of a particular
place being the principal place of business at the preliminary stage of the
hearing of the suit. The defendants have not placed any material before the
H Court that the Singapore Court is another available forum which is clearly
MAY AR (H K IL TD ,. OWNERS & PARTIES. VESSEL M.V. FORTUNE EXPRESS [PP NAOLEKAR, J ] 867

or distinctly more appropriate than the Indian Courts. The Court has not taken A
into consideration that the action commenced by the plaintiff-applicants in
Calcutta Court founded on the facts which are most real and substantially
connected in ter111s of convenience or expense, availability of the witnesses
and the law governing the relevant transaction in the Indian Court. There is
no averment in the application filed by the defendants that continuance of
action in Calcutta High Court would work injustice to them because it is B
oppressive or vexatious to them or would be an abuse of the process. 1f the
Court. There was no material before the Court how the trial at Singapore
would be more convenient to th.e parties vis-a-vis the trial of the suit at
Calcutta and that justice could be done between the parties at substantially
less inconvenience and expense. Nor it has been shown that stay would not C
deprive the plaintiffs of legitimate personal or juridical advantage available
to them. In the facts of the case, this court is not satisfied that there is other
forum having jurisdiction, in which the case may be tried more suitably for
the interest of all the parties and for ends of justice. (889-C-GJ

8. From reading of Admiralty Rules, it appears that it is a usual and D
common practice to issue warrant of arrest if the affidavit filed under Rule 4
contains all particulars required. Thus, it cannot be said that arrest of the
ship was obtained by the plaintiffs suppressing material facts which would
warrant stay of suit by the Court. [891-E, Fl

9. The defendants have not made out a case for stay of the proceedings E
of Admiralty Suit and the High Court has committed an error in passing the
order of permanent stay and discharging the bank gua~antee. [891-G I

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 867 of2006.

From the Judgment and Order dated 23.8.2004 of the Calcutta High
Court in A.P.O.T. No. 679/2002. F
C.S. Sundaram, Rana Mukherjee, R. Misra, S. Gautam and Goodwill
lndeevar for the Appellants.

R.F. Nariman, H.K. Puri, U. Banerjee, S.K. Puri, Ms. P. Puri and V.M.
Chauhan for the Respondents.
G
The Judgment of the Court was delivered by

P.P. NAOLEKAR, J. Leave granted.

This appeal is preferred by the plaintiff-appellants challenging the
judgment of the Division Bench of the Calcutta High Court dated 23.8.2004 H
868 SUPREME COURT REPORTS (2006] 1 S.C.R.

A whereby the plaintiffs' suit filed in Admiralty jurisdiction was directed to
remain permanently stayed and the bank guarantee furnished by the defendant-
respondents in the suit was directed to stand immediately discharged. The
plaintiff-appellants wen: also directed io pay the costs.

Appellant No. I Mayar (H.K.) Limited filed admiralty suit in the High
B Court at Calcutta on 27.3.2000 in admiralty jurisdiction along with appellants
Nos. 2 to 5 with whom a contract to sell the goods was entered into by
plaintiff I appellant No . I, against the defendant-respondents alleging, inter
alia, that plaintiff I appellant No. I (hereinafter called "A-1 ") is a company
incorporated under the laws of Hong Kong and engaged in the business of
C export and import of timber logs. By and under a Charter Party Agreement
entered into on 7.1.2000 between plaintiff No. 1-Mayar (H.K.) Limited and
defendant No. 2-Trustrade Enterprises PTE Ltd., a company incorporated
under the appropriate laws of Singapore and carrying on business, inter a/ia,
at IOI, Cecil Street l0-04 Tong. Eng. Building, Singapore (description given
in the plaint) an owner on behalf of the vessel M.V. "Fortune Express"
D (hereinafter referred to as "'the vessel"), a foreign vessel flying the flag of
Singapore, the defendants agreed to carry on board the vessel a quantity of
5200 CBM Barawak Round logs or upto vessel's full capacity for discharge
at the Port of Calcutta, India. In or about January 2000, A- I purchased various
quantities of Malaysian Barawak logs for the purpose of shipment to the Port
of Calcutta and to sell the same to various third parties having their offices
E in West Bengal, India. Under five bills of lading dated 21.2.2000, 17.2.2000,
24.2.2000, 15.2.2000 and 18.2.2000, the defendants agreed to carry on board
the said vessel 1638 pieces of logs of different quality measuring 5325.2941
CBM from various ports of Malaysia to the Port of Calcutta, India. At the
request of A-1, the five bills of lading were split into 17 bills of lading at the
F instance of the defendants so as to facilitate sale by A- I to various buyers
in West Bengal, India. The appellants I to 5 are the holders in due course
and/or endorsees of the six of those bills of lading which dealt with tht; 642
pieces of logs. As per the stowage plan of the vessel, out of 642 logs, the
subject matter of bills of lading, which were loaded on board the vessel, 578
logs were lying on the deck of the vessel. The vessel arrived at the Port of
G Calcutta on 7.3.2000 and started discharging the cargo ·ying on its deck from
that date till 15.3 .2000. At the time of the discharge of the cargo lying on the
deck of the vessel, it was found that 456 logs out of 578 logs which were lying
on the deck of the vessel were missing and had been short-landed. It has
been alleged that in breach of the defendants' duty as a carrier and/or bailees
H for reward and/as evidenced by the six bills of lading, the defendants have
MAY AR (HK ) LTD ''·OWNERS & PARTIES, VESSEL M.V FORTUNE EXPRESS (PP NAOLEKAR. l.J 869

failed to deliver 456 logs whereby the plaintiffs have suffered loss and A
damage. The plaintiffs have also alleged that the defendants also acted in
breach of their contract entered into with A- I being the shipper under the
aforesaid six bills of lading. The defendants have acted in breach of the
Charter Party Agreement entered with A-1 by failing and neglecting to carry
on board the vessel from the loading point to the discharge port, the agreed
quantity of logs. As the logs were not delivered, all the plaintiffs are entitled B
to claim from the defendants the proportionate value and expenses incurred
on account of the said missing 456 logs which is approximately valued at Rs.
l,30,19,688.44p. as per the particulars stated hereinbelow :

I. Proportionate value of 456 logs of
aggregate value of Rs. l,56,87,298.44p. Rs. 1,09, 13,902.56p. c
2 Proportionate port charge and other
charges paid in respect of 456 logs. Rs. 4,14,130.72p.

3. Proportionate custom duty paid in respect
of 456 logs. Rs. 5,00,264.73p. D
4. Proportionate insurance payment made in
respect of 456 logs. Rs. I0,9 l ,390.43p

Rs.l,30,19,688.44p

The plaintiffs have also claimed from the defendants interest on the aforesaid E
sum at the rate of 24 per cent per annum until realization of the entire sum
from the defendants. The plaintiffs have prayed for the arrest of the vessel
along with her tackle, apparel and furniture.

On 27.3.2000 itself, the learned Single Judge of the Calcutta High Court
passed an order that it appears that the claim of the plaintiffs arises out of F
short-landing of the goods as mentioned in the affidavit of arrest amounting
to a total sum of Rs.1,30, l 9,688.44p. The vessel in question is a foreign vessel
and does_ not have any assets within the jurisdiction of the Court. The said
·vessel is now lying at Kidderpore Dock and if the said vessel is allowed to .
ply from the said dock then the decree that may have been passed in the suit G
in favour of the plaintiffs will frustrate the proceedings, as the defendant-
respondents have no assets within the jurisdiction of the Court and in view
thereof the Marshall is directed to arrest the said vessel M.V. Fortune Express
along with her tackle, apparel and furniture. It was made clear in the order that .
if the said vessel furnishes a bank guarantee for the amount mentioned in the
order, with the Registrar, Original Side, High Court, Calcutta, they will b~ at H
870 SUPREME COURT REPORTS 1200611 S.C.R.

A libeny to apply before the Court for vacation of the order. On 12.4.2000, the
Punjab Nationai Bank, Calcutta, submitted a letter of intent before the Registrar,
High Cour.t, Original Side, Calcutta regarding furnishing of the bank guarantee
on behalf of the defendant-respondents seeking order of the court for release
of the vessel. On submission of the letter of intent for furnishing the bank
B guarantee on behalf of the owners and parties interested in the vessel, i.e.,
the respondents, dated 12.4.2000, the learned Single Judge of the Calcutta
High Court on 12.4.2000 itself has passed an order releasing the vessel from
arrest vacating the order of arrest dated 27.3.2000. The order was passed
without prejudice to the rights and contentions of the owners of the vessel
that the suit is not maintainable. On 17.5.2000, the Punjab National Bank
C furnished the bank guarantee binding itself and the defendants for the payment
of the amount of Rs.1,30, I 9,688.44p. The guarantee incorporated a term that
the defendants and the Bank do thereby submit themselves to the jurisdiction
of the Court.

On 7.7.2001, tht: defendants filed an application purported to be under
D Order VII Rule 11 of the Code of Civil Procedure 1908 (for short "the Code")
alleging therein that the suit filed by the plaintiffs is liable to be dismissed
in limine and as a consequence thereof the bank guarantee is liable to be
released, on the grounds that as per Clause 3 of the Bill of Lading (for short
"BOL") the court having jurisdiction to entertain the suit, is the court of the
E carrier's country and thus the Calcutta High Court has no jurisdiction to
entertain the suit; that the contract for carriage was for deck cargo and,
therefore, liability of the carrier was excluded by application of Clause 2 and
Clause 9 read with Clause 19 of BOL and the same being binding on the
plaintiffs the defendants are not at all liable for payment of the damages; and
that the suit does not disclose any cause of action. The learned Single Judge
F by his order dated 1.7.2002 dismissed the application filed by the defendants
for dismissal of the suit relying on the decision of this Court in Chittaranjan
Mukherji v. Barhoo Mahto. AIR (1953) SC 472, that the defendants having
received a favourable order from the Indian court cannot turn around and
challenge the jurisdiction of the very court at a later stage. It was also held
G that for application of Ciause 9 of BOL and exonerating the carrier from its
liability and responsibility, it would be ·necessary to prove that the loss or
damage is the result of any act, neglect or default on account of any servant
of the carrier who is in the management of the deck cargo, which is a matter
of evidence and cannot be ascertained at the preliminary stage.

H Aggrieved by the said order of the learned Single Judge, an appeal was
MAY AR (H.K.) LTD.,. OWNERS & PARTIES. VESSEL MV FORTUNE EXPRESS (PP. NAOLEKAR. J] 87 J

preferred before the Division Bench of the Calcutta High Court by the A
defendants which wi:s allowed by order dated 23.8.2004 The Division Bench
of the High Court has held that under the forum selection clause (Clause 3)
of BOL any dispute arising therefrom shall be decided in the country where
the carrier has its principal place of business governing the law of such
country and, thus, the Singapore Court alone will have jurisdiction to entertain
the suit. Some interesting findings have been arrived at by the Division Bench B
which have material bearing in deciding the present appeal and, therefore,
they are referred herein. The Division Bench has said that the vessel (Fortune
\ Express) having sailed into the Calcutta Port and the claim being of an
admiralty nature the Court had jurisdiction by the laws of India in the same
manner as it would have jurisdiction if a Singapore trader happened to open C
up a place of business within the local limits of the ordinary original civil
jurisdiction of the Court. The issue is not one of possession of jurisdiction
but of its exercise. If the parties have chosen a particular forum and a
particular set of laws in the_ world to govern them, then they arc. in the large
majority of ordinary cases, to be held to their bargain and not to be allowed
)
to depart therefrom only because one party finds it convenient and, therefore, D
chooses to do so. The finding as regards the chosen forum of Singapore
Court and to be governed by the laws of Singapore has been arrived at by
the Division Bench only on the basis of the plaintiffs mentioning that defendant
No. 2 Trustrade Enterprises PTE Ltd. is a company incorporated under the
appropriate laws of Singapore and is carrying on its business at Singapore. E
The Court has also observed that the Singapore law with regard to the
discharge of liability is quite different. According to the Singapore Act, the
Hague Rules have been somewhat amended. For voyages which start from
ports of Singapore or even the goods which are first shipped from there, the
\.
Act seems to include even deck cargo as goods. There is not a single line
in the plaint stating either that the Singapore law is the applicable law or that F
by reason of the application thereof the goods are notdeck cargo. As regards
the liability of the defendants, the Court has found that admittedly the goods
were carried on the deck and there is no liability of the carrier if the deck cargo
is lost. The Court has further held that the defendants by submitting the bank
guarantee before the Court did not submit to the jurisdiction of the Court, G
particularly so when the order dated 12.4.2000 passed by the learned Single
Judge specifically mentioned that the order was being passed without prejudice
to the rights and contentions of the owners of the vessel that the suit is not
maintainable. As regards the submission of the plaintiffs that compelling the
plaintiffs to file a suit for damages at this late stage at Singapore Court wouid
be most unjust because the application by the defendants for treating the H
872 SUPREME COURT REPORTS [2006] I S.C.R.

A plaint off the record of the Court had been filed on 7.7.2001 when the order
for arrest of the vessel was passed on 27.3.2000 and particularly the plaintiffs'
right would be jeopardized because under Article 3(6) of the Hague Rules,
1924 the carrier and the ship had been absolved of all Ii.ability in respect of
the loss or damage if suit were not brought within one year after delivery of
the goods or the date when the goods should have been delivered, the Court
B has opined that under Article 3, Clause 6 of the Hague Rules, 1924, the
limitation had been with respect to the goods. However, Article 1( c) of the
Hague Rules, 1924 mentioned that the cargo which had been carried on deck
would not come under the definition of 'goods'. Except 135 logs, all others
were described in BOL as deck cargo and thus the limitation prescribed for
C filing of the suit would have no application. The Court has further observed
that though the law of Singapore on the point had been different in the sense
that even the deck cargo would be considered under the definition of 'goods',
but the plaintiffs had not mentioned a si11gle word in their plaint regarding
the applicability of the Singapore law. It was further held that the plaintiffs,
from the very outset of the suit, were aware of the fact regarding the appropriate
D forum and hence now at this stage they could not plead to reap the benefit ,
from their own fault. The Court held that the plaintiffs' plaint suppressed the
forum selection clause relating to the law governing the contract and
approached a wrong court to get an ex parte arrest order against the defendants'
vessel. It has been observed that the suppression of fact regarding forum
E selection was of serious nature and that would be sufficient to dismiss the
suit filed by the plaintiffs.

As regards the contention of the plaintiffs that the defendants having
submitted to the jurisdiction of the Court, could not challenge the jurisdiction
of it at a later stage, the Court has held that the defendants raised the
F objection regarding the maintainability of the suit at the first opportunity itself
which is also reflected in the order. It has been held by the Court that by
release of the vessel the defendants have not taken advantage of the Court's
order because instead of che arrested ship lying in wait to satisfy the decree
that might be passed a sufficient money equivalent provided by the owners
G and the parties interested in the ship lies so in wait.

On consideration of th~ si.:bmissions made by the parties before the
Division Bench and the relevant provisions of BOL and the provisions of the
Indian Carriage of Goods by Sea Act, 1925, the Division Bench has arrived
at the following findings:
H (i} The parties have chosen the Singapore Court and the Singapore
MA YAR CH.K.) LTD.' OWNERS & PARTIES, VESSEL MV. FORTUNE EXPRESS [PP NAOLEKAR. J] 873

law by express contract. They should be held bound to it. A
(ii) Arrest of the ship was obtained from the Calcutta High Court in
Calcutta wrongfully since it was in breach of the above clause.
(iii) The defendants never submitted to the Calcutta jurisdiction as
they made reservation about the maintainability of the suit within
about a fortnight of the arrest when the order for furnishing Bank B
Guarantee and release of the vessel was obtained on their behalf.
\
' (iv) Save for 135 longs, the lost logs being 456 in number are covered
entirely by the exclusion clause agreed upon which excludes
liability for any defaults of the shippers' servants in the
management of the deck cargo. c
(v) Deck cargo is that which is described as such in the Bill of Lading
and is also carried as such. The admissions in the plaint are clear
as to the deck cargo nature of the said balance number of logs
and the admissions in the plaint are equally clear that the loss
,,:
thereof occurred due to the actions or neglect of the defendants' D
servants.
(vi)· The plaintiffs suppressed the jurisdiction clause and the liability
exclusion clause; arrest of the ship being obtained thereupon the
Court should decline to proceed ;my further on the improper
plaint, improperly proceeded with by the plaintiffs." E
The Court has, inter alia, recorded a finding that Order VII Rule 11 of the ·
Code might not in terms be applicable as the plaint discloses the cause of
action fully and wholly, but that by reason of the suppression contained in
it, had the exclusion clause been inserted, the cause of action would be lost
with regard to the lost cargo excepting for 135 logs. Again, under the said F
Rule the suit might not be held to be barred as such, because the Calcutta
High Court does have the necessary admiralty jurisdiction to entertain the
plaint and even cause arrest of the ship. The case is not so much on the terms
of Order VII Rule 11 of the Code as upon the inherent jurisdiction of th~
Court, which it always possesses to reject or stay, a plaint by treating it as G
complete and by notionally removing the suppression for that purpose. After
treating the plaint as complete in that manner, if the Court finds that the cause
of action is lacking, it can reject the plaint just as it could reject a plaint had
it been properly presented along with all relevant and necessary materials. It
can also similarly stay a suit permanently.
H
874 Sl:PREME COURT REPORTS [2006 J I S.C.R.

A The aforesaid finding clearly indicates that the order of pennanent stay
of the suit was made by the Division Bench not because the plaint is liable
to be rejected on the grounds that it falls within the parameters of Order VII
Rule 11 of the Code or the suit is liable to be stayed in exercise of the powers
under Section I0 of the Code or that the Court has passed an order under
Order VI Rule 16 of the Code which has not been complied with. The Division
B Bench, in fact, has exercised the jurisdiction for stay of the suit as the
plaintiffs did not disclose the forum selection clause whereby the Court at
Calcutta had no jurisdiction to entertain the suit and further suppressed the
fact that the claim in the suit shall be governed by the laws applicable in the
Singapore Court and that plaintiffs have no case because the claim is in
C regard to deck cargo.

Under Order VI I Rule 11 of the Code, the Court has jurisdiction to reject
the plaint where it does not disclose a cause of action, where the relief claimed
is undervalued and the valuation is not corrected within a time as fixed by
the Court, where insufficient court fee is paid and the additional court fee is
D not supplied within the period given by the Court, and where the suit appears
from the statement in the plaint to be barred by any law. Rejection of the plaint
in exercise of the powers under Order Vil Rule l l of the Code would be on
consideration of the principles laid down by this Court. In T. Arivandandam
v. TV Satyapal and Anr., [1977] 4 SCC 467, this Court has held that if on a
E meaningful, not fonnal, reading of the plaint it is manifestly vexatious, and
merit less, in the sense of not disclosing a clear right to sue, the Court should
exercise its power under Order VII Rule 11 of the Code taking care to see that
the ground mentioned therein is fulfilled. In Roop Lal Sethi v. Nachhattar
Singh Gill, [ 1982] 3 SCC 487, this Court has held that where the plaint
discloses no cause of action, it is obligatory upon the court to reject the plaint
F as a whole under Order VII Rule 11 of the Code, but the rule does not justify
the rtjection of any particular portion of a plaint. Therefore. the High Court
could not act under Order Vil Rule I !(a) of the Code for striking down certain
paragraphs nor the High Court could act under Order VI Rule 16 to strike out
the paragraphs in absence of anything to show that tne avennents in those
G paragraphs are either unnecessary, frivolous or vexatious, or that they ate
such as may tend to prejudice, embarrass or delay the fair trial of the case,
or constitute an abuse of the process of the court. In ITC Ltd. v. Debts
Recovery Appellate Trib•mal, [I 998] 2 SCC 70, it was held that the basic
question to be di:cided while.dealing with an application filed by the defendant
under Order Vil Rule 11 of the Code is to find out whether the real cause of
H action has been set out in the plaint or something illm.ory has been projected
\--
/

MAYAR(H.K.) LTD. o·. OWNERS & PARTIES. VESSEL MV FORTUNE EXPRESS [P.P NAOLEKAR.J] 875

1-. in the plaint with a view to get out of the said provision. In Saleem Bhai and A
Ors. v. State of Maharashtra and Ors., (2003] l SCC 557, this Court has held
that the trial court can exercise its powers under Order Vil Rule 11 of the Code
at any stage of the suit before registering the plaint or after issuing summons
to the defendant at any time before the conclusion of the trial and for the said
purpose the averments in the plaint are germane and the pleas taken by the
defendant in the written statement would be wholly irrelevant at that stage. B
In Popat and Kotecha Property v. State Bank of India Staff Association,
\ (2005] 7 SCC 510, this Court has culled out the legal ambit of Rule 11 of Order
VII of the Code in these words :

"There cannot be any compartmentalization, dissection, segregation C
and inversions of the language of various paragraphs in the plaint.
If such a course is adopted it would run counter to the cardinal canon
of interpretation according to which a pleading has to be read as a
whole to ascertain its true import. It is not permissible to cull out a
sentence of a passage and to read it out of the context in isolation.
Although it is the substance and not merely the form that has to be D
looked into, the pleading has to be construed as it stands without
addition or subtraction of words or change of its apparent grammatical
sense. The intention of the party concerned is to be gathered primarily
from the tenor and terms of his pleadings taken as a whole. At the
same time, it should be borne in mind that no pedantic approach
should be adopted to defeat justice on hair-splitting technicalities." E

From the aforesaid, it is apparent that the plaint cannot be rejected on
the basis of the allegations made by the defendant in his written statement
or in an application for rejection of the plaint. The Court has to re;id the entire
plaint as a whole to find out whether it discloses a cause of action and if it F
does, then the plaint cannot be rejected by the Court exercising the powers
under Order VII Rule 11 of the Code. Essentially, whether the plaint discloses
a cause of action, is a question of fact which has to be gathered on the basis
of the averments made in the plaint in its entirety taking those averments to
be correct. A cause of action is a bundle of facts which are required to be
proved for obtaining relief and f,,r the said purpose, the material facts are G
·required to be stated but not the evic'tnce except in certain cases where the
pleadings relied on are in regard to misrepresentation, fraud, wilful default,
undue influence or of the same nature. So long as the plaint discloses some
cause of action which requires determination by the court, mere fact that in
the opinion of the Judge the plaintiff may not succeed cannot be a ground H
876 SUPREME COURf REPORTS [2006] I S.C.R.

A for rejection of the plaint. In the present case, the averments made in the
plaint, as has been noticed by us, do disclose the cause of action and,
therefore, the High Court has rightly said that the powers under Order VII
Rule 11 of the Code cannot be exercised for rejection of the suit filed by the
plaintiff-appellants.

B Similarly, the Court could not have taken the aid of Section IO of the
Code for stay of the suit a~ there is no previously instituted suit pending in
a competent court between the parties raising directly and subst<>ntially the
same issues as raised in the present suit.

It is contended by Mr. R F Nariman, learned senior counsel appearing
C for the defendant-respondents that the court has inherent discretionary
jurisdiction to stay the proceedings in appropriate matters where the court
th inks fit to do so. This jurisdiction of the court to stay the proceedings in
appropriate cases is not limited to the jurisdiction conferred on the court in
India under Section I0 of the Code. It is distinct from the jurisdiction conferred
D by the Code and for this proposition reliance was placed on Bhagat Singh
Bugga v. Dewan Jagbir Sawhney, 28 AIR ( 1941) Calcutta 670, Hans raj Bajaj
v. Indian Overseas Bank ltd., AIR (1956) Calcutta 33, Krishnan and Anr. v.
Krishnamurthi and Ors., AIR ( 1982) Madras 101 and Mis. Crescent Petroleum
Ltd. v. "MONCHEGORSK" and Anr., AIR (2000) Bombay 161. In the aforesaid
matters, the Court has recognized the inherent power of the High Court to
E stay the proceedings in appropriate cases. In Bhagat Singh Bugga 's case
(supra), it is said that the Code is not exhaustive and does not expressly
provide a remedy in all eventualities and, therefore, the Court has in many
cases where the circumstances warrant it, and the necessities of the case
require it, to act upon the assumption of the possession of an inherent power
F to act ex debito justitiae and to do real and substantial justice. fo exercise.
of this power, the High Court can restrain a defendant by injunction in
another Court in spite of provision of Section I0 of the Code. In Hansraj
Bajaj 's case (supra), the ! iigh Court put a note of caution while upholding the
inherent power of the High Court to stay the suit though filed in a competent
court when it said:
G
"The jurisdiction to stay an otherwise competent suit is to be
sparingly exercised and within the strict limits of the rigorous condition,
whose principles may be stated thus : the first principle is that a mere
balance of convenience is not a sufficient ground for depriving a
plaintiff of his right of prosecuting his action in or his right of access
H
)-
MAY AR (H.K.) LTD. o·. OWNERS & PARTIES. VESSEL MY FORTUNE EXPRESS (P.P. NAOLEKAR, J J 877

to the competent Courts of the land. A
The second principle is that the Court stays an action brought
within the jurisdiction in respect of a cause of action arising entirely
out of the jurisdiction when it is satisfied that the plaintiff will thereby
suffer no injustice whereas if the action is continued the defendant
will, in defending the action, be the victim of such injustice as to B
amount to vexation and oppression and which vexation and oppression
would not arise for the defendant if the action were brought in another
accessible Court where the cause of action arose.

In such a case the Courts have also insisted that the onus is upon
the defendant to satisfy the Court, first, that the continuance of the C
action would work an injustice because it would be oppressive or
vexatious to him or would be an abuse of the process of the Court
and, secondly, also that the stay will not cause any injustice to the
plaintiff....."
/
In Krishnan 's, case (supra}, the Court laid down that if the ends of justice D
require or it is necessary to prevent the abuse of the process· of the court,
the court has jurisdiction to stay the trial of a suit pending before it, but the
exercise of such power would depend upon the facts and circ_umstances of
each case. For the sake of convenience, we may reproduce certain relevant
clauses of the Bill of Lading (BOL) and provisions of the Indian Carriage of E
Goods by Sea Act, 1925 (hereinafter referred to as "the Act") as under :

Bill of lading

"3. Jurisdiction

Any dispute arising under the Bill of Lading shall be decided in the F
country where the carrier has his principal place of business and the
law of such country shall apply except as provided elsewhere herein."

"9. Live Animals and Deck Cargo

shall be carried subject to the Hague Rules as referred to in Clause G
2 hereof with the exception that notwithstanding anything contained
in Clause 19 the Carrier shall not be liable for any loss or damage
resulting from any act. neglect or default of his servants in the
management of such animals and deck cargo."

"19. Optional Stowage Unitiza1ion H
878 SUPREME COURT REPORTS [2006] I S.C.R.

A (a) Goods may be stowed by the Carrier as received or, at Carrier's
option, by means of containers, or similar articles of transport use to
consolidate goods.

(b) Containers, trailers and transportable tanks whether stowed by the
Carrier or received by him in a stowed condition from the Merchant,
B may be ca!Tied on or under deck without notice to the Merchant.

(c) The Carrier's liability for cargo stowed as aforesaid shall be governed
by the Hague Rules as defined above notwithstanding the fact that
the goods are being carried on deck and the goods shall contribute
to general average and shall receive compensation in general average."
c Indian Carriage of Goods by Sea Act, 1925

"2. Application of Rules : Subject to the provisions of this Act, the
rules set out in the Schedule (hereinafter referred to as "the Rules")
shall have effect in relation to and in connection with the carriage of
D goods by sea in ships carrying goods from any port in India to any
other port whether in or outside India."

"SCHEDULE

RULES RELATING TO BILLS OF LADING
E Article I
Definitions
In these Rules the following expressions have the meanings hereby
assigned to them respectively, that is to say

xxx xxx xxx
F
(c) "Goods" includes goods, wares, merchandises, and articles of
every kind whatsoever, except live animals and cargo which by the
contract of carriage is stated as being carried on deck and is so
carried; [unamended clause]

G (c) "Goods" includes any property including live animals as well as
containers, pallets or similar articles of transport or packaging supplied
by the consignor, irrespective of whether such property is to be or is
carried on or under the deck" [as amended by Act 4412000]

H
MAY AR (HK.) LTD.,. OWNERS & PARTIES, VESSEL M V. FORTUNE EXPRESS [PP NAOLEKAR. J.] 879

"Article III A
Responsibilities and Liabilities.
xxx xxx xxx

(6) ""

In any event the carrier and the ship shall be discharged from all B
liability in respect of loss or damage unless suit is brought within one
year after delivery of the goods or the date when the goods should
have been delivered.

*[This period may, however, be extended if the parties so agree
after the cause of action has arisen: C
Provided that a suit may be brought after the expiry of the period
of one year referred to in this sub-paragraph within a further period
of not more than three months as allowed by the court)*.
) D
While working out the equity between the parties and directing
permanent stay of the suit and release of the bank guarantee, the Division
Bench was mainly impressed by two factor:; that (i) Clause 3 of BOL gives
exclusive jurisdiction to the Singapore Court to try and decide any dispute
arising between the parties under the BOL and the parties shall be governed E
by the law which is applicable in Singapore; and (ii) the goods lost being the
deck cargo the carrier ship has no liability in respect of the loss or damage
as per Clause 9 of BOL The Division Bench has said that Clause 3 and Clause
9 of BOL are material clauses which should have been pleaded by the plaintiff-
appellants in their suit and, therefore, abuse of process of the Court. F
As per law of pleadings under Order VI Rule 2 of the Code, every
pleading should contain, and contain only, a statement in a concise form of
the material facts on which the party relies for his claim or defence, as the
case may be. Thus, the facts on which the plaintiff relies to prove his case
have to be pleaded by him. Similarly, it is for the defendant to plead the G
material facts on which his defence stands. The expression 'material facts' has
not been defined anywhere, but from the wording of Order VI Rule 2 the
material facts would be, upon which a party relies for his claim or defence.
The material facts are facts upon which the plaintiffs cause of action or
•Added by Act 28/J 993
H
880 SUPREME COURT REPORT::; (2006] I S.C.R.

A defendant's defence depends and the facts which must be proved in order
to establish the plaintiffs right to the relief claimed in the plaint or the
defendant's defence in the written statement. Which particular fact is a material
fact and is required to be pleaded by a party, would depend on the facts and
circumstances of each case. In A.B.C. laminar/ Pvt. ltd. v. A.P. Agencies,
Salem, (1989] 2 SCC 163, this Court has considered the ambit of the exclusion
B clause whereby the jurisdiction of one court is excluded and conferred upon
another court by agreement of the parties and said that in a suit for damages
for breach of contract, the cause of action consists of making of the contract,
and of its breach, so that the suit may be filed either at the place where the
contract was made or at the pace where it should have been performed and
C the breach occurred. When the court has to decide the question of jurisdiction
pursuant to an ouster clause, it is necessary to construe the ousting expression
or clause properly to see whether there is ouster of jurisdiction of other
courts. When the clause is clear, unambiguous and specific accepted notions
of contract would bind the parties and unless the absence of ad idem can be
shown, the other courts should avoid exercising jurisdiction. As regards
D construction of the ouster clause when words like 'alone', 'only', 'exclusive'
and the like have been used, there may be no difficulty. Even without such
words in appropriate cases, the maxim ·expressio unius est exclusio alterius'
expression of one is the exclusion of another-may be applied. What is an
appropriate case shall depend on the facts of the case. In such a case,
E mention of one thing may imply exclusion of another. When certain jurisdiction
is specified in a contract, an int\:ntion to exclude all others from its operation
may in such cases be inferred. It has, therefore, to be properly construed.

The allegations in the plaint are to the effect that the parties have
entered into a contract on 7.1.2000 to carry on board the vessel M.V. Fortune
F Express under the six split bills of lading 642 logs from the port of Sarawak,
Malaysia for discharge at the port of Calcutta, India. As per stowage plan,
)78 logs were lying on the deck of the vessel. At the time of the discharge
of the cargo lying on the deck of the vessel, it was found that 456 logs out
of 578 logs were missing and had been short-landed. The plaintiffs claimed
a decree for the proportionate value of 456 logs, port and other charges,
G custom duty and proportionate insurance payment. As per the plaintiffs'
allegation, the logs, which were to be carried on the vessel O\yned by the
defendants, had not been delivered at the port of destination. Thus, all the
material facts on the basis of which the plaintiffs claimed the decree are
alleged in the plaint. As the logs were not delivered at the port at Calcutta,
H the port of destination, the part of cause of action arose within the jurisdiction
\
)·
MAY AR IH K ) LTD.•• OWNERS & PARTIES. VESSEL M.V FORTUNE EXPRESS [P.P. NAOLEKAR. J.] 88 J

of the Calcutta Court and, thus, the suit filed by the plaintiffs at Calcutta was A
maintainable although it may be pleaded by the defendants in their written
statement that the Calcutta High Court has no jurisdiction on account of
Clause 3 ofBOL For the purpose of the cause of action, it was not necessary
for the plaintiffs to plead the ouster of the jurisdiction of the Calcutta Court
Jn fact, it was for the defendants to plead and prove the ouster of the
jurisdiction of the Calcutta Court and conferment of the jurisdiction in tlie B
Singapore Court alone. On a bare reading of Clause 3 of BOL, it is clear that
any dispute arising under the BOL shall be decided in the country where the
\
carrier has its principal place of business and the law of such country shall
apply except as provided elsewhere in the BOL Therefore, the exclusion
clause refers to the jurisdiction of a court where the carrier has its principal C
place of business. Unless and until it is established that the defendant-carrier
has its principal place of business at Singapore, the exclusion clause has no
application. Simply because in the cause title of the plaint, the plaintiffs have
described defendant No. 2-Trustrade Enterprises PTE Ltd. to be carrying on
business at Singapore, would not ipso facto establish the fact that the
principal place of business of defendant No.2 (respondent herein) is/was at D
I
Singapore to exclude the jurisdiction of the Calcutta Court which admittedly
has the jurisdiction to try the suit. Therefore, absence of reference of Clause
3 of BOL in the pleadings cannot be said to be suppression of the material
fact as the question of jurisdiction would be required to be adjudicated and
decided on the basis of the material placed on record at the trial. E
In S.J.S. Business Enterprises (P) ltd. v. Stale of Bihar and Ors., [2004]
7 SCC 166, this Court has accepted the principle that the suppression of a
material fact by a litigant disqualifies such litigant from obtaining any relief.
The rule has been evolved out of the need of the courts to deter a litigant
from abusing the process of court by deceiving it. But the suppressed fact F
must be a material one in the sense that had it not been suppressed it would
have had an effect on the merits of the case. It must be a matter which was
material for the consideration of the court, whatever view the court may have
taken. Reliance was placed on R. v. General Commrs. for the purposes of the
Income Tax Act for the District of Kensington, ( 1917) I KB 486.
G
Similarly under Clause 9 of BOL, the carrier was not made liable for any
loss or damage resulting from any act. neglect or default of his servants in
the management of animals and deck cargo. Under this clause, the carrier is
excluded from making good any loss or damage to the deck cargo which has
resulted from any act, neglect or default of his servants who are in the H
882 SUPREME COUR r REPORTS [2006] I S.C.R.

A management of such deck cargo. The facts are yet to come on record that the
loss or damage to the deck cargo was the result of any act, neglect or default
of the carrier's servants who were in the management of the deck cargo. In
fact, this would be the defence if at all to be raised by the defendants in their
written statement. It was not at all required for the plaintiffs to introduce this
B clause in their plaint. The liability of the defendants to pay or not to pay any
loss or damages to the cargo, would depend on proof of certain necessary
facts which could only be adjudicated upon at the trial of the suit.

Clause 2 (General Paramount Clause) of BOL reads as under:

"The Hague Rules contained in the International Convention for the
c Unification of certain rules relating to Bills of Lading, dated Brussels
the 25th August 1924 as enacted in the country of shipment shall
apply to this contract. When no such enactment is in force in the
country of shipment, the corresponding legislation of the country of
destination shall apply, but in respect of shipments to which no such
0 enactments are compulsorily applicable, the terms of the said
Convention shall apply.

Trades where Hague-Visby Rules apply.

The trades where the International Brussels Convention 1924 as
amended by the Protocol signed at Brussels on February 23rd 1968.
E The Hague-Visby Rules apply compulsorily, the provisions of the
respective legislation shall be considered incorporated in this Bill of
Lading. The Carrier takes all reservations possible under such
applicable legislation, relating to the period before loading and after
discharging and while the goods are in the charge of another Carrier
F and to deck cargo and live animals."

Under this Clause of BOL, the Hague Rules contained in the International
Convention for the Unification of Certain Rules Relating to Bills of Lading,
Brussels, August 25, 1924 and Protocol to amend the said Convention,
Brussels, February 23, 1968, as enacted in the country of shipment shall apply
G to this contract and if no such enactment is in force in the country of
shipment, the corresponding legislation of the country of destination shall
apply, but if no such enactments are compulsorily applicable then the terms
of the Convention shall apply, that is to say, in the absence of any enactment
in the country of shipment or in the country of destination, the Hague Rules
H shall apply. Under Article I, clause (c) of the Hague Rules, the goods shall
MAY AR (H.K.) LTO ,. OWNERS & PARTIES. VESSEL MY FORTUNE EXPRESS [P.P. NAOLEKAR. J.] 883

include goods, wares, merchandise, and articles of every kind whatsoever A
except live animals and cargo which by the contract of carriage is stated as
being carried on deck and is so carried. Thus, the cargo which by the contract
of carriage is carried on the deck would not be goods under the Hague Rules,
whereas under Clause 9 of BOL deck cargo is also included for the purpo>es
of the liability of the carrier if the loss or damage to the goods is not on B
account of the neglect or default of the servants of the carria3e in the
management. The question whether the cargo transported by the carrier
would be governed by the Hague Rules on account of Cl\luse 2 (General
\
Paramount Clause) or by Clause 9 of BOL would be a question ~equired to
be determined by the Court after the parties placed all material evidence
before it and could not have been decided by the Division Bench at the C
preliminary stage. Clause 19 of BOL permits the Carrier to stow the goods
either on deck or under deck without notice to the merchant as received by
him or at the Carrier's option by means of containers or similar articles of
transport used to consolidate goods. Sub-clause (c) thereof provides that the
Carrier's liability for the cargo stowed shall be governed by the Hague Rules D
as defined above notwithstanding the fact that the goods are being carried
on deck and the goods shall contribute to the general average and shall
receive compensation in general average. This clause has reference to Clause
14 of BOL which provides for general average and salvage in respect of
goods in the event of accident, danger, damage or disaster before or after
commencement of voyage. This clause has no reference to the liability, if any, E
of the Carrier or the cargo ship for non-delivery of the goods. In any case,
without there being material on record, Clause 19 cannot be relied upon for
absolving the Carrier from his liability for any damage or loss caused to the
goods carried on ship.

It is urged by Shri C.S. Sundaram, learned senior counsel for the· plaintiff- F
appellants that on 4.12.2001 reply was filed to the application filed by the
defendants under Order VII Rule 11 of the Code wherein the plaintiffs have
denied that 578 out of 642 logs were carried on deck or that 456 out of the
said 578 logs which were carried on deck had been short-landed; that at the
time of filing of the suit, information of the plaintiffs was based on the six split G
bills of lading contained in Annexures "A" to "F" of the plaint and the
representations made on behalf of the defendant No. 2; that it subsequently
transpired that the allegation that 578 logs were carried on deck is wholly
incorrect and false; and that the original five bills of lading more fully referred
to in paragraph 7 of the plaint did not state that the logs were carried on deck. H
From this, it appears that the plaintiffs are alleging and asserting that the logs
884 SUPREME COURT REPORTS [2006] I S.C.R.

A were not carried on deck and, therefore. Clause 9 has no application. We are
not recording any finding on this issue, but on the basis of the aforesaid
factual questions raised, the High Court without going into the merits of the
case could not have held that the plaintiffs would not be entitled to a decree
on account of Clause 9 of BOL. Besides this, tP.e Court will be required to
B give meaning to the words used in Clause 9 as to whether the term 'loss' in
the Clause has to be separately read or it has to be read and construed as
having reference to, damage to deck cargo and whether it will cover the case
of shortlanding of the goods and not to damaged goods.

To get the order of stay of a suit on the ground of abuse of process,
C the applicant must show that plaintiff would not succeed but that he could
not possibly succeed on the basis of the pleadings and in the circumstances
of the case. In other words, the defendant would be required to show very
strong case in his favour. The power would be exercised by the Court if
defendant could show to the court that the action impugned is frivolous,
vexatious or is taken simply to harass the defendant or where there is no
D cause of action in law or in equity. The power of the court restraining the
proceedings are to be exercised sparingly or only in exceptional cases. The
stay of proceedings is a serious interruption in the right, that a party has to
proceed with the trial to get it to its legitimate end according to substantive
merit of his case. The court to exercise the power to stay the proceedings has
E to keep in mind that the positive case has been made out by the defendant
whereby the c~urt can reach to the conclusion that proceedings, however,
indicate an abuse of the process of Court. T.he High Court has granted stay
of proceedings as it found plaintiffs guilty of suppression of jurisdictional
clause of BOL and on the finding that plaintiffs have no case on merits, and
thus it would be abuse of process of the Court if the plaintiffs are permitted
F to go ahead with the trial in Calcutta Court. We are not satisfied that the
defendants have made out the case on any of the counts.

It is urged by the learned senior counsel that where jurisdiction is
founded on the basis of cause of action arising in Calcutta Court as non
G delivery of logs are claimed to be at Calcutta, the defendants are entitled to
apply to the court to exercise its discretion to stay the proceedings on the
gro1Jnd of.forum non conveniens. It was urged before the High Court and by
Shri C.S. Sundaram, learned senior counsel appearing for the appellants before
us that the appellants will suffer irreparable injury if they are called upun to
file a suit at Singapore Court after the expiry of period of one year, particularly
H so when the objection to the jurisdiction of the Calcutta Court was raised by
~·
MA VAR (H.K.) LTD ,. OWNERS & PARTIES. VESSEL M.V. FORTUNE EXPRESS [P.P. NAOLEKAR. J] 885

the defendants on 7. 7.200 I and, therefore, the defendants cannot c!aim A
' advantage of forum non conveniens.
;

1 The argument is based on the basis of Clause (6) of Article III of the
Schedule to Indian Carriage of Gocds by Sea Act, 1925, wherein it has been
provided that in any event the carrier and the ship shall be discharged from
all liability in respect of loss or damage unless suit is brought within one year B
after delivery of the goods or the date when the goods should have been
delivered. By Act No. 28 of 1993, it has been provided that this period may
·~
be extended if the parties so agree after the cause of action has arisen, and
further under the proviso a suit may be brought after the expiry of the period
~
of one year within a further period of not more than three months as allowed
by the court. Under Clause (6) of Article Ill, one year period was provided
c
to file a suit against the carrier or the ship for loss or damages which, by
amendment in 1993, has been extended to further period of three months if
allowed by the court and can also be extended for a period till the filing of
the suit if the parties to the suit agree after the cause of action has arisen.
Under Article I of the Schedule, 'goods' are defined and as per the substitution D
f brought about by A~t No. 44 of 2000, the goods shall include any property
-·~
including live animals as well as containers, pallets or similar articles of
transport or packaging supplied by the consignor, irrespective of whether
such property is to be or is carried on or under the deck. By the amended
definition, the deck cargo is also included in the definition of goods provided E
the deck cargo is in the form of containers, pallets or similar articles of
transport or packaging supplied by the consignor. Therefore, on a first reading,
the goods transported on a carriage, even if it is a deck cargo, could be
subject to the limitation as provided in Clause (6) of Article lll, but for Section
. 2 of the Act which specifies that subject to the provisions of the Act, the
rules set out in the Schedule shall have the effect in relation to and in F
~
connection with the carriage of goods by sea in ships carrying goods from
any port in India to any other port whether in India or outside India. To apply
the provisions of the Act and the Schedule thereunder, the goods should be
carried by sea in a ship from any port in India to any other port in India or
outside India. In the present case, admittedly, the goods in question were G
carried on the ship from Malaysia for discharge at Calcutta. The goods having
not been carried from any port in India~ Clause (6) of Article Ill of the
Schedule and the provisions of the Act will have no application for the
,..,, purposes of limitation. Therefore, it cannot be said that by virtue of the Act,
the suit would be barred by limitation if the plaint is required to be presented
in the Singapore Court .. None of the parties have placed before us the H
886 SUPREME COURT REPORTS [2006] I S.C.R.

A Singapore law applicable to the facts of the present case, nor any argument
has been advanced on that basis. The plaintiff-appellants on these facts ..
cannot claim equity on the basis of the provisions of the Act and the (
limitation provided therein.

In Smith Kline & French laboratories ltd & Urs. v. Bloch, (1983] 2
B All ER 72, the first plaintiffs (the English Company) were phannaceutical
company in England and were a wholly owned subsidiary of the second
plaintiffs (the U.S. Company) The defendant was a research worker working
in England. The defendant brought an action for damages in Pennysylvania ,
against both the English and the U.S. Companies. The English Company
C (plaintiff) sought an injunction in the English Court to restrain the defendant
from further proceedings with his claim in Pennysy1vania or from making any
further claims outside the jurisdiction of English Court and further sought
declarations that the proper law of agreement was that of England and that
the English Company were not liable for the breaches complained of. The
judge granted the injunction sought. The defendant appealed and it was held
0 while dismissing the appeal that "the Court had jurisdiction to grant an
injunction restraining a litigant from continuing proceedings in a foreign court
where the parties were amenable to the English jurisdiction and where it is
satisfied (a) that justice could be done between the parties in the English
forum at sub~tantially less inconvenience and expense; and (b) that the stay
E of proceedings did not deprive the litigant in the foreign proceedings of any
legitimate personal or juridical advantage which would otherwise have been
available to him. The jurisdiction was nevertheless to be exercised with great
caution.

In Spiliada Maritime Corp v. Cansulex ltd., [1986] 3 All ER 843, the •
F House of Lords explained the ambit of the principle of forum nun conveniens
for issuing the order of stay and held:

"(I) The fundamental principle applicable to both the stay of English
proceedings on the ground that some other forum was the appropriate
forum and also the grant of leave to serve proceedings out of the
G jurisdiction was that the court would choose that forum in which the
case would be tried more suitaoly for the interests of all the parties
and for the ends of justice

(2) In the case of an application for a stay of English proceedings the '..,
burden of proof lay on the defendant to show that the court should
H exercise its discretion to grant a stay. Moreover, the defendant was
)
'
MA YAR IH K) LTD.•·. OWNERS & PARTIES. VESSEL M V FORTUNE EXPRESS [P P NAOLEKAR. J.] 887

; required to show not merely that England was not the natural or A
appropriate forum for the trial but that there was another available
~
forum which was clearly or distinctly more appropriate than the English
forum. In considering whether there was another forum which was
.. more appropriate the court would look for that forum with which the
action had the most real and substantial connection, e.g. in terms of
convenience or expense, availability of witnesses, the law governing B
the relevant transaction, and the places where the parties resided or
... carried on business. If the court concluded that there was no other
available forum which was more appropriate than the English court it
would normally refuse a stay. If, however, the court concluded that
there was another forum which was prima facie more appropriate the
court would normally grant a stay unless there were circumstances
c
militating against a stay, e.g. if the plaintiff would not obtain justice
in the foreign jurisdiction."
•
In this case the Division Bench has held while considering the question
I of forum non conveniens as under : D
., "Let us see, therefore, what are the factors weighing in favour of
the Indian Courts as against the Courts of Singapore. The evidence
regarding shortage of goods was said to be in India. In our opinion
this evidence does not justify the continuance of the action in the
wrong Court, because the shortage is practically admitted; in any E
event the proof of it in Singapore is not a matter of any very great
difficulty. The other great factor in favour of the Indian action is that

v,
. the ship Fortune Express lost the goods in the very voyage in which
it happened to travel to the Port of Calcutta and that by reason
thereof, it could be quite clearly and easily arrested and the security
F
obtained for the action upon the lost logs. This, in our opinion, takes
a very one sided view of the matter. The arrest conventions, the
decision of the Supreme Court in the case of M. V. Elezabeth, reported
at [ 1993] Supp. 2 SCC page 433, and the various observations therein
from, say paragraphs 75 to 85 of the judgment, no doubt show that
the Fortune Express could be arrested on an admiralty claim of the· G
present nature. That arrest makes the action of the consignee very
_.,., much secure. But we are not deciding upon the issue of security; we
are deciding upon the issue of appropriate commencement of the
action. If the action can be appropriately commenced in Calcutta,
security can be obtained and to that extent the consignee can feel
H
888 SUPREME COURT REPORTS (2006] 1 S.CR.

A safe. This does not mean that the reverse is true. It would be putting
the cart before the horse if one were to say that because the plaintiff
can commence an action and obtain security here the action should
be held as appropriately commenced. This is not the correct way to
look at the case at all. If that were so, parties would be encouraged
not to pay tlte attention to solemnly agreed clauses of forum selection
B and they would rush to the Admiralty Court even contrary to such
a selection clause and obtain arrest, thereafter arguing, that the arrest
was most convenient for them, that it produced a security from the
shipper, and that if decree should be passed in their favour there
would be no difficulty in its execution.
c xxx xxx xxx

The factor for leaning heavily in favour of Singapore is that the
parties have chosen Singapore law. We have not had any experts on
Singapore law attending the proceedings before us and indeed this
choice of law was also suppressed by the plaintiffs like the choice of
D Court. No doubt, arrest of a ship and the consequent obtaining of
security would be of great advantage to a plaintiff if it were shown
that the owners of the ship were difficult to trade or had to sue. Not
so here. The owners have come forward. They can be sued in their
country. There is nothing tc show that they are so impecunious or
E that they are snch slippery customers that filing a suit against them
in Singapore wou Id be a matter of no use at all. These factors are not
present in the case. We do not see why in view of these circumstances
we should not hold the parties to their bargain and send them away
from a Court which they had not agreed to come to."

F From the aforesaid, it is apparent that the Court has found that the
Calcutta Court has jurisdiction to try the proceedings except when the forum
selection clause excludes the jurisdiction of the Court. The Court has also
found that the law of Singapore is not known. The case of the defendant
carrier/owner of the ship, of exclusion of the Calcutta Court, is solely based
G on the exclusion clause which conferred jurisdiction on the Court where the
defendant has the principal place of business, which according to us has to
be determined only after :ufficient material is placed before the Court. In
Advanced Law Lexicon. 3rd Edition 2005, by P. Ramanatha Aiyar, at page
3717, ·principal place of business' is defined as under:

H "'where the governing power of the corporation is exercised, where
MAY AR (H.K.) LTD.•·. OWNERS & PARTIES, VESSEL M.V. FORTUNE EXPRESS [P.P. NAOLEKAR, J.) 889

those meet in council who have a right to control its affairs and A
prescribe what policy of the corporation shall be pursued, and not
where the labour is performed in executing the requirements of the
corporation in transacting its business.

The place of a corporation's chief executive offices, which is typically
viewed as the "nerve center" . B
..... the place designated as the principal place of business of the
corporation in its certificate of incorporation."

From this, it appears that the principal place of business would be where the
governing power of the corporation is exercised or the place of a corporation's C
Chief Executive Offices, which is typically viewed as the nerve center or the
place designated as the principal place of business of the corporation in its
incorporation under the various statutes. Therefore, to arrive at a finding as
to which is the principal place of business, the parties would be required to
1 place the relevant material before the Court. The Court cannot arrive at a D
finding of a particular place being the principal place of business at the
preliminary stage of the hearing of the suit. The defendants have not placed
any material before the Court that the Singapore Court is another available
'.i'.
forum which is clearly or distinctly more appropriate than the Indian Courts ..,
The Court has not taken into consideration that the action commenced by the ·
plaintiff-appellants in Calcutta Court founded on the facts which are most real .E .,
and substantially connected in terms of convenience or expense, availability
of the witnesses and the law governing the relevant transaction in the Indian
Court. There is no averment in the application filed by the defendants that
continuance of the action in Calcutta High Court would work injustice to them
because it is oppressive or vexatious to them or would be an abuse of the F
. process of the Court. There was no material before the Court how the trial at
Singapore would be more convenient to the parties vis-a-vis the trial of the
suit at Calcutta and that justice could be done between the parties at
substantially less inconvenience and expense. Nor it has been shown that stay
would not deprive the plaintiffs of legitimate personal or juridical advantage
available to them. In the facb of the case, we are not satisfied that there is G
other forum having jurisdiction, in which the case may be tried more suitably
for the interest of all the parties and for ends of justice.
The Rules of the High Court of Calcutta on the Original Side, Appendix
No. 5 under the caption 'Admiralty Rules', the Rules for regulating the
procedure and practice in cases brought before the High Court at Calcutta H
890 SUPREME COURT REPORTS [2006] I S.C.R.

A under the Colonial Courts of Admiralty Act, 1890 were framed. The suit was
defined to mean any suit, action, or other proceedings instituted in the said ,/

-
court 'in its jurisdiction under the Colonial Courts of Admiralty Act.
Rule 3 provides for institution of the suit. Under this Rule, a suit shall
be instituted by a plaint drawn up, subscribed and verified according to the
B provisions of the Code of Civil Procedure. Rule 4 is in relation to the arrest
warrant after affidavit which reads as under:
"In suits ir. rem a warrant for the arrest of property may be issued at ,
the instance either of the plaintiff or of the defendant at any time after
the suit has been instituted, but no warrant of arrest shall be issued
c until an affidavit by the party or his agent has been filed, and the
following provisions complied with:-

(a) The affidavit shall state the name and description of the party at
the whose instance the warrant is to be issued, the nature of claim or
counter-claim, the name and nature of the property to be arrested, and
D that the claim or counter-claim has not been satisfied.

(b) In a suit of wages or of possession the affidavit shall state the
national character of the vessel proceeded against; and if against a
foreign vessel, that notice of the institution of rhc suit has been given
to the Counsel of the State to which the vessel belongs, if there be
E one resident in Calcutta and a copy of the notice shall be annexed to
the affidavit.

(c) In a suit ofbottomry the bottomry bond, and in a foreign language
also a notarial translation thereof, shall be produced for the inspection .j

and perusal of the Registrar, and a copy of the bond, or of the .v
F translation thereof, certified to be correct shall be annexed to the
affidavit.

(d) In a suit of distribution of Salvage the affidavit shall state the
amount of Salvage money awarded or agreed to be accepted, and the
name, address and description of the party holding the same.
G
Rule 6 provides that in suits in rem no service of writ or warrant shall
be required when the attorney of the defendant waives service and undertakes
in writing to appear and to give security or to pay money into Court in lieu
of Security.
Rules 27 provides for caveat to be filed against the arrest warrant. The
H
Court can issue the warrant for the arrest ifthe affidavit contains the particulars
). -

'1A VAR (HK) LTD ,. OWNERS & PARTIES. VESSEL MV FORTUNE EXPRESS [P.P.NAOLEKAR, J.] 89 J
>-
as required under Rule 4. A
Ru le 6 perm its the attorney of the defendant to ask for waiving of
warrant of arrest by giving an undertaking in writing to appear and to give
security. In the present case suit was instituted on 27.3.2000 and affidavit was
filed for issuance of warrant of arrest of the vessel along with tackle, apparel
and furniture as the same day the court directed for the arrest of the vessel. B
On 12.4.2000 letter of intention regarding furnishing guarantee on behalf of

t
" the Owners & Parties, Vessel M.V. Fortune was filed and on the same date
the vessel was directed to be released. In the order of release dated 12.4.2000
the court has specifically mentioned that the order of release was passed
without prejudice to the rights and contentions of the owner of the vessel
that the ~uit is not maintainable. Thus, the maintainability of the suit filed by
c
the plaintiff-appellants was the question raised before the court and the court
was quite aware of the fact that the defendants are submitting to the
jurisdiction of the court subject to their rights and contentions that the suit
is not maintainable in the Calcutta High Court. Thus, it cannot be said that
at the time of the filing of the letter of intention for furnishing guarantee D
parties were not aware that the question of the jurisdiction of the court would
be raised. Not only the parties the court was also aware that the issue of
jurisdiction of the court would be in question. The defendants have not
pressed for dismissal of the suit even when the bank guarantee was furnished
on 17.5.2000. The defendants have not asserted dismissal of suit on the
ground of jurisdiction of the Court at th.: outset when letter of intention was
E
furnished by the Punjab National Bank on their behalf nor at the time of

.. furnishing bank guarantee and waited till 7.7.2001 to file an application. From
reading of Admiralty Rules, it appears that it is a usual and common practice
'<,
to issue warrant of arrest if the affidavit filed under Rule 4 contains all
particulars required. Thus, it cannot be said that arrest of the ship was F
obtained by the plaintiffs suppressing material facts which would warrant
stay of suit by the Court.

For the reasons aforementioned, we are of the view that the defendants
have not made out a case for stay of the proceedings of Admiralty Suit No.
11 of 2000 pen'1ing in the Calcutta High Court and the High Court has G
committed an error in passing the order of permanent stay and discharging
the bank guarantee. The appeal is allowed with costs. The order of the
Division Bench of the High Court is set aside. The suit shall now proceed
in the Calcutta Court in accordance with law.

K.G. Appeal allowed. H