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2012 Supreme(Bom) 2028
High Court of Judicature at Bombay
S.J. KATHAWALLA, J.
Sparebanken Sogn og Fjordane
Versus
M.V. Bos Angler & Others
NOTICE OF MOTION NO. 558 OF 2012 IN ADMIRALTY SUIT NO. 24 OF 2011
Decided on : 19-10-2012
For the Plaintiff:Atul Rajadhyaksha, Senior Advocate, along with Z. Bharucha, instructed by Bimal Rajasekhar, Advocates.
For the Defendants:D3, V.K. Ramabhadran, D4, Rahul Narichania, along with Shiv Iyer, Prashan Kamat & Sujan Malhotra, instructed by M/s. Bose & Mitra & Co., Ms. Sneha Phene, instructed by M/s. Little & Co., D5 & D6, A.M. Vernekar, Advocates.
Headnote:
Admiralty Suit - Determination of Priority of Claims - Rules 947 to 951 of the Bombay High Court (Original Side) Rules - The Plaintiff sought an order and direction for appraisement, survey, and valuation of the Defendant vessel and to order and direct the sale of the vessel. The Plaintiff also sought an order determining the order of priority of claims against the sale proceeds. The Defendants argued that the Plaintiff's application was premature and not maintainable. The Court held that an application for order of priorities under Rule 951 (1) can be made only after obtaining a decree against the said property or the proceeds of sale thereof. The Court further held that an order under Rule 951 (2) can be obtained at the time of or subsequent to an order of sale under Rule 948, but an application under Rule 951 (1) may be filed only after the expiration of the period specified in such order or any time after the judgment.
Fact of the Case:
The Plaintiff filed an Admiralty Suit seeking an order and decree in favor of the Plaintiff and against the Defendants for a sum of NOK 176,500,000 and interest, and also for a declaration of a valid and subsisting first priority registered mortgage on the Defendant vessel. The Plaintiff sought arrest of the vessel, sale of the same, and application of the sale proceeds towards the satisfaction of the Plaintiff's claim.
Finding of the Court:
The Court found that the Plaintiff's application for order of priorities was premature and not maintainable. The Court dismissed the Notice of Motion, stating that an application for order of priorities under Rule 951 (1) can be made only after obtaining a decree against the said property or the proceeds of sale thereof.
Issues: The main issue was whether the Plaintiff's application for order of priorities under Rule 951 (1) was premature and not maintainable.
Ratio Decidendi: The Court held that an application for order of priorities under Rule 951 (1) can be made only after obtaining a decree against the said property or the proceeds of sale thereof. The Court further held that an order under Rule 951 (2) can be obtained at the time of or subsequent to an order of sale under Rule 948, but an application under Rule 951 (1) may be filed only after the expiration of the period specified in such order or any time after the judgment.
Final Decision: The Court dismissed the Notice of Motion, stating that an application for order of priorities under Rule 951 (1) can be made only after obtaining a decree against the said property or the proceeds of sale thereof. The Court further held that an order under Rule 951 (2) can be obtained at the time of or subsequent to an order of sale under Rule 948, but an application under Rule 951 (1) may be filed only after the expiration of the period specified in such order or any time after the judgment.
By the above Notice of Motion, the Plaintiff seeks the following reliefs:
“(a) For an order and direction that the order of priority of claims against the sale proceeds shall be determined after the expiration of ninety days or of such other period as the Court may specify from 4th January 2012;
(b) For an order and direction that the Sheriff shall send for publication in such newspapers as the Court may direct, a notice complying with the provisions of Sub-rule 951 (3) of the Bombay High Court Rules stating, inter alia, that the order of priority of claims against the said proceeds shall be determined after the period mentioned is determined by this Hon'ble Court with respect to prayer (a) and that any person having a claim against the property or the proceeds of sale thereof should file his claim before the Hon'ble Court before the expiration of the said period.”
2. The relevant facts are briefly set out hereunder:
3. The above Admiralty Suit was originally filed by the Plaintiff against Defendant No.1 vessel – m.v. BOS ANGLER and Defendant No.2 – Bos Angler AS, the owner of the said vessel, for an order and decree in favour of the Plaintiff and against the Defendants for a sum of NOK 176,500,000 (Norwegian Kroner One Hundred and Seventy Six Million Five Hundred Thousand only) equivalent to Indian Rs. 143,43,50,896/-(Rupees One hundred forty three crores forty three lakhs fifty thousand and eight hundred ninety six only), and interest at the rate of 12% per annum from the date of the institution of the suit till payment/realization and also for a declaration that there is a valid and subsisting first priority registered mortgage on the Defendant No.1 vessel in favour of the Plaintiff. By the said suit, the Plaintiff also sought arrest of the Defendant No.1 vessel, sale of the same and application of the sale proceeds towards the satisfaction of the Plaintiff's claim in the suit.
4. After the above suit was filed, Defendant Nos. 3 to 6 sought intervention in the suit on the ground that they are interested in the property (Defendant No.1 vessel), which is the subject matter of the suit or in the money realized from the same, under Rule 949 of the Bombay High Court (Original Side) Rules, 1980 (“the said Rules”). The Intervention Applications have been allowed and Defendant Nos. 3 to 6 are joined as party Defendants to the suit.
5. Thereafter since Defendant No.2 went into liquidation and the Official Liquidator of the estate of Defendant No.2 is appointed, the Official Liquidator is joined as party Defendant No.7 to the suit.
6. On 16th June 2011, the Plaintiff took out Notice of Motion No. 1817 of 2011 inter alia seeking an order and direction for appraisement, survey and valuation of the first Defendant vessel and to order and direct the sale of the vessel. On 8th July 2011, this Court inter alia directed the Sheriff of Bombay, to get the appraisement, survey and valuation of the vessel carried out by M/s. Ericson and Richards at the plaintiff's costs. On 3rd August 2011, M/s. Ericson and Richards (Valuer) submitted its report dated 1st August 2011, when the Court fixed the reserve bid for the sale of the first Defendant vessel at Rs. 250 crores. The Sheriff of Mumbai was directed to seek confirmation of the sale of the Defendant No.1 vessel from this Court within five weeks from the date of publishing the advertisement as directed by the Court.
7. At the auction fixed on 20th September 2011, no bids were received. This Court (Coram: S.C. Dharmadhikari, J.) therefore by its order dated 4th October 2011 directed that the Sheriff shall once again put up the said vessel for sale. Being aggrieved by the order passed by this Court dated 4th October 2011, the Plaintiff filed an Appeal being Appeal No. 758 of 2011 before the Hon'ble Division Bench of this Court. The Appeal Court ordered a fresh sale upon certain fresh terms and conditions. Accordingly, the Sheriff of Mumbai advertised the sale of Defendant No.1 vessel in va
