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2020 Supreme(Bom) 586

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
K.R. Shriram, J.
Board Of Trustees Of Port Mumbai - Appellant
Versus
Barge Madhwa And Anr - Respondent
Chamber Summons No. 66 of 2018; Admiralty Suit No. 6 of 2015, 1 of 2015, 11 of 2015, 17 of 2015, 20 of 2015, 41 of 2015, 1 of 2017, 28 of 2017, 33 of 2017, 65 of 2015, 18 of 2017, 38 of 2018; Commercial Admiralty Suit No. 285 of 2015, 284 of 2015, 36 of 2018, 482 of 2017, 121 of 2017, 142 of 2016, 8 of 2019, 39 of 2018; Commercial Suit No. 73 of 2016, 319 of 2016; Commercial Notice Of Motion No. 74 of 2015, 75 of 2015, 73 of 2015, 76 of 2015, 743 of 2019; Notice Of Motion No. 1162 of 2015, 1721 of 2015, 1161 of 2015, 1166 of 2015, 1715 of 2015, 1717 of 2015, 757 of 2017, 1095 of 2019, 1718 of 2015, 800 of 2018, 1158 of 2015, 726 of 2019, 1805 of 2019, 1215 of 2019, 2447 of 2019, 1974 of 2018; Notice Of Motion (L) No. 180 of 2016, 181 of 2016
Decided On : 19-05-2020

Advocates Appeared:
Prashant Pratap, Advocate, Nishaan Shetty, Advocate, V.K. Ramabhadran, Advocate, Abhinav Chandrachud, Advocate, Saurish Shetye, Advocate, Shailendra A Singh, Advocate, Rahul Narichania, Advocate, Pratiksha Avhad, Advocate, Mulla And Mulla, Advocate, Craigie Blunt And Caroe, Advocate, Sharan Jagtiani, Advocate, Surabhi Agrawal, Advocate, Prasad Shenoy, Advocate, Prashant Ashar, Advocate, Naishadh Bhatia, Advocate, Bulbul Singh-Rajpurohit, Advocate, Niraf Shroff, Advocate, Crawford Bayley And Co, Advocate, Prathamesh Kamat, Advocate, Ajai Fernandes, Advocate, Sneha B Pandey, Advocate, Ashwini Sinha, Advocate, Harsh G Pratap, Advocate, S. Priya, Advocate, Aparna Sinha, Advocate, Kunal Naik, Advocate, Ashwin Shanker, Advocate, Bimal Rajasekhar, Advocate, Shrey Sancheti, Advocate, Theba And Associates, Advocate, Kundanlal Patil, Advocate, Vyas And Bhalwal, Advocate, Osama Butt, Advocate, Ganesh And Co, Advocate, R.P. Shirole, Advocate, Kunjita Shah, Advocate, Khare Legal Chambers, Advocate, Shrikant Hathi, Advocate, Pritish Das, Advocate, Brus Chambers, Advocate, Aneesa Cheema, Advocate, Charles De Souza, Advocate, Lakshmi Bussa, Advocate, M.V. Kini And Co, Advocate, Mahendhar Aithe, Advocate

Headnote:(A) Companies Act, 1956 - Section 446 - Insolvency and Bankruptcy Code, 2016 - Sections 14 and 52 - Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 - Questions of jurisdiction and applicability of insolvency legislation to admiralty proceedings - The Court held that an action in rem under the Admiralty Act is not subject to Section 446's requirement for leave of the Company Court during winding-up proceedings; the action is against the ship, not the corporate debtor - It further clarified that maritime claims ensure secured creditor status, following sale proceeds procedures per the Admiralty Act. (Paras 100, 86, 28, 92)

Table of Content
1. court's jurisdiction based on vessel's ownership. (Para 1 , 2 , 3)
2. questions of law surrounding admiralty actions. (Para 4 , 16 , 17 , 19 , 21)
3. distinction between actions in rem and in personam. (Para 10 , 11 , 12)
4. no leave under section 446 for admiralty suits. (Para 100)

JUDGMENT

K R Shriram, J. - These Admiralty Suits were filed and Orders of Arrest obtained from this Court in all or most of the suits. By Orders dated 05 May 2017 this Court, however, was pleased to admit Company Petition No. 119 of 2015 as well as Company Petition No. 756 of 2014 against GOL Offshore Ltd., the owner of Defendant Vessels in Admiralty Suit No. 1 of 2017 and Commercial Admiralty Suit No. 121 of 2017. Further, by its Order dated 04 December 2017, this Court was pleased to order GOL Offshore Ltd. (Company in liquidation), be wound up.

2. On 09 March 2018, when Admiralty Suit No. 1 of 2017 was listed and taken up for directions/orders, the Official Liquidator of GOL Offshore Ltd. (Company in liquidation), through his assistant, objected to the Suit proceeding further without obtaining leave under S. 446 of the COMPANIES ACT , 1956 (hereinafter referred to as COMPANIES ACT ). In response to the objection, it was submitted on behalf of Plaintiff in Adm. Suit no. 1 of 2017 that in light of the decision in Shanmugam Rajashekhar V/s. Owners and parties interested in the vessel m.t. Pratibha Cauvery,2018 SCCOnlineMadras 13 , no leave under S. 446 was required to be obtained. As this would be repetitive issue, this Court, therefore, by its Order dated 09 March 2018, was pleased to direct listing of all such suits together, to hear and decide upon the question as to whether leave under S. 446 of the COMPANIES ACT was required. This will be relevant in Adm. Suit no. 1 of 2017, Commercial Adm. Suit no. 121 of 2017, Adm. Suit no. 11 of 2015, Adm. Suit no. 20 of 2015, Commercial Adm. Suit no. 73 of 2016, Commercial Adm. Suit no. 142 of 2016, Adm. Suit 28 of 2017, Adm. Suit 33 of 2017, Commercial Adm. Suit no. 319 of 2016, Adm. Suit no. 41 of 2015, Commercial Adm. Suit no. 36 of 2018, Commercial Adm. Suit no. 482 of 2017, Ad. Suit 65 of 2015, Adm. Suit no. 18 of 2017, Adm. Suit no. 38 of 2018, Commercial Adm. Suit no. 8 of 2019, and Commercial Adm. Suit no. 39 of 2018 listed.

3. By an order dated 08 March 2019, in C.P. No. IB-731(PB)/ 2018, the National Company Law Tribunal, New Delhi, in the meanwhile, was pleased to admit a Petition under S. 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as IBC) against Punj Lloyd Ltd., the owner of Defendant Vessels in Admiralty Suit No. 1 of 2015, Admiralty Suit No. 6 of 2015, Admiralty Suit No. 17 of 2015, Commercial Admiralty Suit No. 284 of 2015, and Commercial Admiralty Suit No. 285 of 2015. Consequently, a Moratorium under S. 14 of the IBC was also declared by the said Order dated 08 March 2019. The moratorium period came to be extended from time to time, the last of which came to be passed on 31 January 2020 extending the period of moratorium by 60 days. However, on being questioned by this Court of the effect of the same upon the present Admiralty Suits, it was submitted on behalf of Plaintiffs in Adm. suit no. 6 of 2015 that an Order of Moratorium under S. 14 of the IBC has no bearing whatsoever upon admiralty proceedings, which are prosecuted in rem. Issues as to the effect of other provisions of the IBC, on rights under the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 (hereinafter referred to as Admiralty Act) such as those with respect to statutory dues, crew wages etc. also came to be raised. As this would also be repetitive issue, this Court, therefore, was pleased to direct listing together such suits to hear and decide upon the applicability, effect and consequences of the proceedings under IBC as well, on the Admiralty Suits before this Court. This will be relevant in Adm. Suit no. 1 of 2015, Adm. Suit no. 6 of 2015, Adm. Suit no. 17 o

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