In OTA KANDLA PVT. LTD. Versus THE O/P INT. IN THE VESSEL M.V. NEPENTHE & ORS., the plaintiff's case in the suit is that its maritime claim against the said ship is on account of supply of necessaries made to another ship M.V. ARYBBAS registered in the name of the defendant no.3, which is also a company incorporated under the appropriate laws of Republic of Liberia. According to the plaintiff, although the ships, namely, M.V. NEPENTHE and M.V. ARYBBAS and the said vessel are registered in the names of the defendant nos.2 and 3 companies respectively but, the same are beneficially owned by the defendant no.4, another company also incorporated under the appropriate laws of the Republic of Liberia and all the three companies have their office in Greece at 25, Poseidonos Avenue, Moschato, 183 44 Piraeus, Greece. The plaintiff has alleged although the defendant no.4 is the common Ship Manager/Commercial Manager of the said vessel and M.V. ARYBBAS, but it is the defendant no.4 company which floated the defendant nos.2 and 3 companies to evade making payment of the expenses incurred in operation of the vessels which are beneficially owned by it including the said vessel and M.V. ARYBBAS. In the plaint the plaintiff has asserted that the defendant nos.2 and 3 companies have been fraudulently incorporated by the defendant no.4 to take advantage of their separate corporate identity. The defendant no.4 company is the controlling mind of the defendant nos.2 and 3 companies and the defendant nos.2 and 3 ostensibly owning one vessel each have been created solely to defeat the maritime claims which may be enforced against the vessels of which the defendant no.4 is the owner. The beneficial owner of the defendant nos.2 and 3 companies is the defendant no.4 and the said defendants have perpetrated fraud upon the plaintiff. The defendant nos. 2 and 3 are devices of fraud and this is a fit case for lifting of the corporate veil of all the defendant companies. The plaintiff has stated that it shall give further particulars of fraud upon complete and faithful discovery by the defendant companies.
The defendant nos.1 and 3 who are presently contesting the suit and pressed for vacating of the order of arrest of said vessel, contended under the Indian law a company is a separate juristic entity, its shareholders do not own the assets of the corporate entity and therefore, in an admiralty suit the Court cannot permit lifting of the corporate veil to make the shareholder of a corporate entity to be the owner of the ship belonging to the incorporated company. The said defendants urged that under the Indian law no one can maintain an admiralty suit for arrest of a ship to enforce its maritime claim against another ship on the plea that both the ships are beneficially owned by one company although they are registered in the names of two separate companies.
In view of the decision of the Supreme Court in Liverpool and London S.P. and I Association Ltd. vs. M.V. Sea Success I and Anr. reported in (2004), neither the Division Bench decision of this Court in M.V. Dong Do (supra), nor the decisions of the Bombay High Court in the case of M.V. Rainbow Ace (supra) and M.V. Western Light (supra) can be held to have laid down that the Indian law, under no circumstances, permits this Court to ascertain the beneficial ownership of a vessel to remain with a company/person in whose name the vessel is not registered or to lift the corporate veil of the concerned corporate entities to find out the beneficial owner of vessel sought to be arrested in the admiralty suit. From a reading of the decisions of the Bombay High Court in the said case of M.V. Rainbow Ace (supra) and M.V. Western Light (supra) it is clear that in the said cases the respective plaintiffs made out no case that the relevant defendant company was created fraudulently, so as to only defeat the maritime claims against the company in whose name the vessel giving rise to the maritime claim in favour of the plaintiff is registered. In the said cases there were no allegation of any fraudulent intention on the part of the beneficial owner of the vessels. Even in paragraph 9 of the decision in the case of M.V. Dong Do (supra) the Division Bench of this Court held that a sister ship would include the ships belonging to two different concerns only if there is a common beneficiary, but the said proposition cannot be said to be absolute one and each case has to be considered keeping in view of the factual back-drop involved. In paragraph 17 of the said decision the Division Bench further found that no statement had been made in the plaint that the ships although belonging to different companies, the companies were constituted with a view to commit fraud on its creditors. For all these reasons, I am unable to accept the contention advanced by the defendant nos. 1 and 3 that in the aforementioned decisions, either the Division Bench of this Court or the Bombay High Court has laid down any law to the effect that under the Indian law, in an admiralty suit, the Court does not permit lifting of the corporate veil to make the shareholder of a corporate entity, the owner of the property belonging to the incorporated company and to ascertain the beneficial owner of a vessel.
Even the owners of the arrested vessel in the case of Dong Do (supra) produced various documents which clearly went to show that the ships which were alleged to be the sister vessel of the other not only belong to two different concerns, but also they were registered as being owned by different companies and had been transacting business separately. Till now the defendant nos. 2,3 and 4 have not disclosed any document to substantiate present shareholdings and their Board of Directors.
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