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2012 Supreme(Bom) 2210

BOMBAY HIGH COURT
D. Y. CHANDRACHUD & A.A.SAYED, JJ.
Sparebanken Sogn Og Fjordane
Versus
M.V. Bos Angler &Ors
Decided on : 30/11/2012

Headnote:Bombay High Court (Original Side) Rules (1980), R.951(3) - Admiralty proceedings - Sale of ship - Notice of motion—Essence of notice is that it constitutes an intimation to all claimants at large with claims against the vessel or the sale proceeds of the vessel that it is to the Admiralty Court which has assumed jurisdiction following the arrest of the vessel that claims must be brought and proved---Claimant who fails to bring a claim before the Admiralty Court, may nonetheless assert a claim in personam against the owner of the vessel, but once a vessel has been arrested and sold, a claim in a suit in rem has to be brought before the Admiralty Court exercising jurisdiction in rem and before that Court alone. (Para 18)

JUDGMENT

DR. D.Y.CHANDRACHUD, J.:-

1. Admit, consent made returnable forthwith. The counsel appearing on behalf of the Responded waive service on behalf of the Respondents. By consent, the Appeal is taki up for hearing and final disposal.

2. This Appeal arises from judgment of a Learned Single Judge dated If October 2012 in a Motion which was out in an Admiralty Suit.

3. The suit in the admiralty jurisdiction of this Court has been instituted against a vessel, M.V. Bos Angler, and her owners for a decree in an amount of Norwegian Kroners 176.500 million equivalent to Rs. 143.43 Crores together with interest. The Plaintiff, in appeal in these proceedings, is a bank incorporated under the laws of Norway and seeks a declaration of the existence of a valid and subsisting first priority registered mortgage on the vessel. The Plaintiff sought arrest and sale of the vessel in the exercise of the jurisdiction in rem, and application of the sale proceeds towards the claim in the suit. The Third to Sixth Defendants were allowed to intervene in the suit in accordance with the provisions of Rule 949 of the rules framed by this Court on the Original Side and have since been impleaded as Defendants. The owners of the vessel were taken into liquidation in Norway and the Liquidator has been impleaded as the Seventh Defendant.

4. On a Motion by the Plaintiff, an order was passed on 8 July 2011 for appraisement, survey and valuation. A valuation report was submitted on 3 August 2011. A reserve bid of Rs.250 Crores was fixed by the Court and a direction was issued to the Plaintiff to advertise the sale of the vessel. On 13 September 2011 the Learned Single Judge declined to grant permission to the Plaintiff to bid for the vessel. In appeal on 16 September 2011 the Plaintiff was allowed to bid for the vessel. No bids were received. On 4 October 2011 the Single Judge ordered that the vessel shall be put up for sale once again. On 13 October 2011 the Plaintiff filed an appeal against the order of the Learned Single Judge allowing a second round of auction sale. In that appeal the Division Bench allowed the auction sale to proceed. The Plaintiff was the highest bidder at the second auction. On 30 November 2011 the Division Bench allowed the sale of the vessel to the Plaintiff subject to conditions. The sale was confirmed in favour of the Plaintiff. The Plaintiff has deposited the sale consideration, U.S. $ 33.1 million with the Prothonotary and Senior Master on 4 January 2012.

5. A Motion was moved by the Plaintiff before the Learned Single Judge on 15 February 2012 seeking inter alia 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 ala, that the order of priority of claims against the said proceeds shall be determined after the period mentioned determined by this Hon'ble Court with respect of 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;" (emphasis supplied).

6. The Learned Single Judge by the order which is impugned in these proceedings noted that during the course of the submissions it was stated on behalf of the Plaintiff that while a determination of priorities may have to await judgment, nonetheless an order directing the issuance of a public notice could be obtained at any time after the sale proceeds were deposited in Court, for the purpose of inviting claims. The Learned Single Judge was of the view that the purpose of Rule 951 of the Rules framed by this Court on the Original Side is the
















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