It is the duty of the Court to satisfy itself that the price fixed for the sale of a vessel is the best that could be expected to be offered and that the condition of confirmation by the Court being a safeguard against the property being sold at an inadequate price, it will be not only proper but necessary that the Court in exercising the discretion should see that the price fetched at the auction is an adequate price.

M. KARPAGAVINAYAGAM, J.

This appeal has been filed by the appellant/intervenor before this Court against the decretal order and fair order of the learned single Judge dated 24-1-1998, passed in Application No. 1217 of 1997 in C.S. No. 97 of 1997 in exercise of the Admiralty Jurisdiction confirming the sale of the vessel "M.V. ELENI."

2. The plaintiff/first respondent Ocean Marine Services Company Limited, Korea, filed an admiralty suit in C.S. No. 97 of 1997 for recovery of money from the defendant, the owners and parties interested in the vessel M.V. Eleni, in Feb. 1997. He also filed an application in A. No. 750 of 1997 on 26-2-1997 for the arrest of the vessel. Thereafter, he filed another application in A. No. 906 of 1997 on 6-3-1997 for the sale of the same. Pursuant to these applications, the vessel was directed to be arrested by the order dated 27-2-1997 and the same was ordered to be sold by the order dated 17-4-1997.

3. At this stage, several persons claiming liens over the vessel, filed the intervenor applications in the suit. The appellant also intervened through Application No. 2172 of 1997, as the said vessel had been mortgaged to the appellant to secure the loans advanced to the owners. In the meantime, the second respondent, the owners of the vessel also filed Application No. 1217 of 1997 for the sale of the vessel. The order of sale through public tender was passed in these applications by the learned single Judge and an Advocate-Commissioner also was appointed for such purpose.

4. The upset price of the vessel was fixed by the Court at US $ 2.25 million and the Earnest Money Deposit at US $ 1,00,000/-. Notice of sale was published in leading dailies and in the Lloyds List. As directed by the Court, the plaintiff incurred the expenditure. The last date for receipt of the sealed tenders was fixed as 26-5-1997. The tenders were to be opened by the learned single Judge on 14-6-1997 and the sale was subject to the confirmation by the Court.

5. Pursuant to such notice of sale of the vessel, only one bid was received for US $ 3,80,000/-, though the minimum acceptable price was fixed as US $ 2.25 million. The bidder is M/s. Jansee Steel Industries Private Limited, the third respondent herein. On 26-5-1997 the Managing Director of the third respondent met the Advocate Commissioner and paid US $ 1,00,000/- as security as per the sale condition.

6. Barring this sole tender, no other tender had been received by the Advocate Commissioner. Therefore, on 27-5-1997 the Advocate Commissioner submitted the sealed tender along with the interim report. On 30-6-1997 the sale tender received was opened by the Court and the same was found to be for US $ 3,80,000/-.

7. The plaintiff, the appellant and other intervenors objected to the acceptance of the said bid of the sole bidder, as the offer was too low and much below the upset price. They further contended that the vessel might be brought to sale once again by publishing the necessary notices as made earlier. When the question arose as to who is to bear the necessary cost of publication, since it comes to nearly Rs. 90,000/- as expenditure incurred by the plaintiff for the earlier publication, the counsel for the appellant represented that he would bring a better offer or in the alternative, the appellant would bear the expenses for the publication for the fresh auction. Therefore, the matter was adjourned to a future date to enable appellant to make arrangement for the same. On the adjourned date, the counsel for the appellant expressed his inability to bring a better offer. However, he offered to bear the cost of re-tender. But, the learned single Judge by order dated 4-8-1997 accepted the bid of sole bidder, the third respondent herein for US $ 3,80,000/-.

8. As against the above order, the appellant being a mortgagee filed an appeal in O.S.A. No. 246 of 1997 before the Division Bench. After hearing the parties, by the order dated 28-8-1997 the Division Bench disposed of th