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Civil ProcedureSupreme Court of India

Petromarine Products Ltd. v. Ocean Marine Services Co. Ltd. & Anr.

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 6156 of 2005)Decided 17 Feb 2015
Civil Appeal No. 6156 of 2005
Justice M.Y. Eqbal · Justice Shiva Kirti Singh

Background

A vessel, "M.V. Eleni," was separately arrested in admiralty suits before both the Madras High Court and the Bombay High Court by different creditors around 1997. The Madras High Court, which had arrested the vessel first, sold it through its Advocate Commissioner and later disbursed the sale proceeds among several creditors and the crew. The appellant, which had obtained a decree and an attachment order from the Bombay High Court, challenged the Madras High Court's disbursement, arguing it should have received priority as a decree-holder and that Madras had no jurisdiction over funds already attached by Bombay.

Decision Breakdown

The Supreme Court held that since the vessel was arrested and sold by the Madras High Court first, in a suit in rem, that court alone had jurisdiction (as the transferee/custodial court) to decide priorities among all claimants, including the appellant, who was fully aware of the Madras proceedings but chose not to participate in them. The Court found the appellant could not bypass the Madras proceedings by separately obtaining an attachment order from the Bombay High Court without notice to the other creditors, and upheld the High Court's view that the appellant should instead pursue its claim under the Madras High Court's own Original Side Rules. The appeal was accordingly dismissed, with no order as to costs.

Lesson Learnt

When property (here, a ship) is under the custody of one court through a suit "in rem," that court alone has jurisdiction to decide competing claims over it: a creditor cannot sidestep that process by seeking a separate attachment order from a different court without notifying the other interested parties.

Petromarine Products Ltd. v. Ocean Marine Services Co. Ltd. & Anr. – Legal Case Shots | LegalAware