Hindustan Aegis Lpg LTD. vs. The Owners And Parties Interested In The Vessel Mt Tsm Pollux (Imo No. 9266889)

Facts

The appellant, Hindustan Aegis LPG Ltd., filed an appeal against an order dated October 19, 2023, which modified a previous order of September 15, 2023. The original order had directed the arrest of the vessel MT TSM Pollux (IMO No. 9266889) and its equipment. The vessel was to be released upon the defendant depositing USD 506,161 and INR 84,00,67,559/- as security. The appellant complied by filing an undertaking. The impugned order reduced the security deposit to INR 4,77,70,265.93. The appellant contended that the learned Single Judge erred by overlooking the disclosed agreements and invoices, and by finding the projected loss of income unsubstantiated, despite the appellant claiming damages due to the alleged negligence of the defendant's vessel causing damage to the appellant's loading/unloading arm at Haldia Oil Jetty-I.

Held

The Court held that while the appellant had made out a prima facie case for damages to its twin arm due to the defendant's vessel's negligence, it was not convinced of any fallacy in the impugned order regarding the refusal of the security amount for loss of business. The Court noted that the learned Single Judge's observation about a non-existent third twin arm did not affect the ultimate conclusion, as the core reasoning remained that the appellant failed to disclose specific berth transactions to justify business loss claims. The Appellate Court reiterated that it should not substitute its views for that of the learned Single Judge unless there was perversity or patent illegality. Therefore, the Court found no occasion to interfere with the impugned order. The appeal was dismissed, but liberty was granted to rely on reports in subsequent proceedings, and the observations were declared tentative and not res judicata. A stay on the impugned order was extended for seven days to allow the appellant to test the judgment before a higher forum.

Key Issues

1. Whether the learned Single Judge erred in holding that the appellant had not sufficiently substantiated its claim for damages on account of business losses, thereby reducing the security deposit required from the defendant. Petitioner/Appellant's Arguments: - The appellant argued that the learned Single Judge proceeded on an erroneous premise, failing to consider the disclosed invoices and agreements which clearly showed income earned from operations at Haldia Oil Jetty-I and Haldia Oil Jetty-II. - They contended that the invoices for the year preceding the claim sufficiently substantiated the business loss for the projected one-year period required for arm replacement. - The appellant also argued that the damage was caused by the defendant's negligence, citing the vessel's presence at the port and the improper positioning of its crane boom. - Reliance was placed on 'Vohra Sadikbhai & Ors. vs. State of Gujarat & Ors.' and 'Videsh Sanchar Nigam Ltd. Vs. M.V. Kapitan & Ors.' to support the claim for damages and the principle of admiralty actions. Revenue/State's Arguments: - The respondent argued that the learned Single Judge correctly observed that the plaintiff had not disclosed any agreement with HPCL and that the invoices did not refer to specific berths. - They contended that the projected loss of income was based on unsubstantiated figures and that the plaint did not plead a duty of care. - The respondent also argued that the plaintiff had not substantiated its claim for business losses and that the frequency of vessel arrivals did not justify the claimed income distribution between the two arms. - The respondent offered to deposit double the security amount directed in the impugned order to cover potential additional costs.