Orissa High Court Releases Cargo Vessel MV Debi Following Settlement Between Parties, Orders Refund Of Court Fees

Taking on record the affidavit filed by the plaintiff Cargo Terminal indicating out of the Court settlement between the parties, the Admiralty Judge Justice Murahari Sri Raman observed –

“The fact remains that the ADMLS, purpose for which the plaintiff has filed the same, does not survive as the matter has been settled between the Plaintiff and the Defendant outside the Court. The ADLMS has been allowed to be withdrawn taking into consideration the affidavit filed by the learned counsel for the Plaintiff as indicated above.”

Case Background

On 30.11.2023 and 01.12.2023, 22 packets of contraband/cocaine were recovered from the defendant vessel, namely, 'MV Debi'. Subsequent to such recovery, the Assistant Commissioner, Paradeep Customs Division addressed to the Traffic Manager, Paradip Port Trust, Paradip directing that no movement authorizations be given to the vessel without prior consultation.

As the movement of the vessel was restricted, it was parked at the space provided by the plaintiff-Paradip International Cargo Terminal Pvt. Ltd. However, when the vessel failed to pay the berth hire charges, the plaintiff filed this admiralty suit praying for a decree against the defendant to pay a sum of Rs.7,95,47,170/- in terms of Section 4(1)(n) read with Section 9(1)(d) of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017.

Subsequently, the Court had ordered for arrest of the cargo vessel in February last year as it failed to submit the dues. After the arrest of the vessel, it remained parked at the space provided by the plaintiff.

Despite of the order of arrest, neither the owner nor any person interested in the vessel deposited the security relating to the claim amount. Also, they did not file any written statement denying the averments taken in the plaint.

Due to such inaction on the part of the defendant, the plaintiff prayed for sale of the vessel as delay of each day contributes to the increasing claim of the plaintiff. Further, the plaintiff-terminal argued that unless immediate step for sale of the vessel is taken, its value will come down gradually due to depreciation and will also affect its 'seaworthiness'.

In August last year, the Court referring to the provision of sale of vessels enumerated under Section 11(3) of the Act read with Rule 16 of the Orissa High Court Admiralty (Jurisdiction and Settlement of Maritime Claims) Rules, 2020, modified the order of arrest of the vessel and directed for sale of the same. It also ordered the Deputy Registrar (Judicial) to act as Court Commissioner till the sale of the defendant vessel.

After the aforesaid order, the parties entered into a settlement outside the Court on 09.10.2024 for which the plaintiff filed an affidavit seeking to withdraw the admiralty suit since dispute has already been resolved.

Considering the above submission, the Admiralty Judge found no reason to drag the litigation any further in absence of survival of the very cause of action and accordingly, recalled the order of arrest passed by the Court in February last year. The Court also ordered release of the vessel from the cargo terminal.

“However, needless to observe that if the Customs Authorities have seized the vessel, it is open for the Defendant to take appropriate steps in accordance with law,” it clarified.

Further, an interlocutory application was filed by the plaintiff seeking refund of the court fees paid by it while filing the suit. It contended that since the dispute was resolved between the parties outside the Court, it is entitled to get back the court fees to the tune of Rs. 23,87,600/-.

To substantiate its case, it referred to the judgment in High Court of Judicature at Madras represented by its Registrar General v. M.C. Subramaniam & Ors., LL 2021 SC 97, wherein the Supreme Court had held that the parties who privately agree to settle their disputes outside the modes contemplated under Section 89 of the CPC are also entitled to refund of Court fees. The Apex Court had observed –

“In our view, there is no justifiable reason why Section 69-A should only incentivise the methods of out-of-court settlement stated in Section 89 CPC and afford step-brotherly treatment to other methods availed of by the parties… Thus, in our view, the High Court was correct in holding that Section 89 CPC and Section 69-A of the 1955 Act be interpreted liberally. In view of this broad purposive construction, we affirm the High Court's conclusion, and hold that Section 89 CPC shall cover, and the benefit of Section 69-A of the 1955 Act shall also extend to all methods of out-of-court dispute settlement between parties that the Court subsequently finds to have been legally arrived at.”

Having regard for the clear enunciation of law by the top Court, the High Court allowed the IA by directing the Registry to refund the amount to the plaintiff on proper identification.

Case Title: Paradip International Cargo Terminal Pvt. Ltd., Mumbai v. M.V. Debi (IMO.9616735)

Case No: ADMLS No.1 of 2024

Date of Order: February 18, 2025

Counsel for the Plaintiff: Mr. Prathamesh Kamat, Advocate assisted by M/s. Neha Nair, Satya Smruti Mohanty, Isha Patil and S.Subash Pradhan, Advocates

Counsel for the Defendant: Mr. Pradeep Kumar Khuntia, Advocate Mr. Dipti Ranjan Bhokta, CGC (Intervenor)

Citation: 2025 LiveLaw (Ori) 29

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