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2019 Supreme(Mad) 2003

IN THE HIGH COURT OF MADRAS
Vineet Kothari, C.V. Karthikeyan, JJ.
Pratibha Shipping Company Limited - Appellants
Vs.
Praxis Energy Agents S.A. and Ors. - Respondent
OSA Nos. 20, 317 to 349, 363, 364 of 2018 and W.A. Nos. 738 to 751 of 2013
Decided On : 09-08-2019

Advocates Appeared:
For the Appellant : V. Prakash, S.C. for Shubharanjani Ananth
For the Respondents: R.S. Mohan, R. Karthikeyan, S.R. Raghunathan, Ratnanko Banerji, S.C. for Amitava Majumdar, N.V. Srinivasan for NVS & Associates, Joy Thattil Itoop for K.M. Anand and S. Vasudevan

Headnote:

Companies Act, 1956 - Section 446 – claim of compensation – jurisdiction - appointment of the Official Liquidator - With the appointment of the Official Liquidator in the said winding up proceedings before the Bombay High Court, the Official Liquidator raised an objection in this regard in the pending Civil Suit No. 89 of 2013 that the said suit and other similar claim petitions in Admiralty Jurisdiction cannot be proceeded with, without obtaining the prior leave of the Bombay High Court in terms of Section 446 of the Companies Act, 1956, whereas the claimants pursuing their claims under the Admiralty jurisdiction of this Court have opposed the said stand of the Official Liquidator on the ground that the proceedings under the Admiralty jurisdiction are proceedings-in-rem against the vessel in question and to satisfy their maritime lien, they not only had the right to seek the arrest of the ship MT Pratibha Cauvery, but they can also go ahead for determination of their claims without seeking any such leave of the Bombay High Court – Held, In view of the subsequent developments of law, in the field of recovery of dues from the corporate entities, we are of the opinion that putting the requirement of obtaining prior leave to undertake these proceedings under these enactments or Special Laws from the winding up Court or Company Court, is not envisaged in the Scheme of the development of laws and therefore, any contra opinion on that would lead to unnecessary obstacles and hindrance in the exercise of special jurisdictions by the special Tribunals or Courts under these special recovery laws as well as the special law like the Admiralty jurisdiction of this Court - We are further fortified in our view by the enactment of recent Insolvency and Bankruptcy Code, 2016, which also is another Special Law in sequence for recovery of dues in Banks and Financial Institutions, after the RDB Act and SARFAESI Act, 2002. The Insolvency and Bankruptcy Code, 2016, further empowers the National Company Law Tribunal to undertake the rehabilitation process of such defaulter companies in accordance with the provisions of Insolvency and Bankruptcy Code, 2016 and the said Act read with Section 434 of the Companies Act, 2013, now amended, envisages transfer of even pending winding up proceedings from the Company Court, viz. High Court to the National Company Law Tribunal - Only if the decree holders/plaintiffs are unable to satisfy their claims out of the realisation on the sale of the vessel in question, viz. M.T. Pratibha Cauvery, which has already been sold as stated above, in accordance with the priorities of their inter se claims as stipulated in the Admiralty Act of 2017 and they want to recover the balance amount, if any, from the owner company itself in action-in-personam, they will be at liberty to approach the Official Liquidator in the aforesaid winding up proceedings against the owner company, where in accordance with the provisions of the Companies Act, they may be entitled to receive the balance amount on the distribution of realisation on sale of the other assets of the company under winding up, by the said Official Liquidator, attached with Bombay High Court. We cannot agree with the obiter observation of the learned Single Judge of the Bombay High Court, while we affirm the view of the learned Single Judge of this Court in the order under appeal before us – appeal dispose of

JUDGMENT :

Vineet Kothari, J.

1. A short, but interesting question of law arises in the present Appeals filed against the order of the learned Single Judge of this Court dated 03.01.2018, namely "Whether in Admiralty suits filed in the original jurisdiction of this Court, the leave of the High Court/Tribunal under Section 446 of the Companies Act, 1956 (now Section 279 of new Companies Act, 2013) to file or proceed with such a suit is required to be obtained by the plaintiffs or not, after the Winding Up Order is passed by the Court and an Official Liquidator or Provisional Liquidator is appointed by that Court/Tribunal?".

2. The facts leading to the filing of the present Appeals arose in the following context. A ship or vessel, MT Pratibha Cauvery, when anchored at the shore near Chennai was caught in the eye of cyclonic storm named 'Neelam' around 27.12.2012. The said vessel drifted towards the shore and in the said natural calamity, some of the crew members jumped into the sea and six of them lost their lives and one of the crew members was rescued by the Indian Coast Guard on 01.11.2012, who filed a civil suit, i.e. C.S. No. 89 of 2013 invoking the original Admiralty Jurisdiction of this Court and seeking a Decree and judgment against the Ship, viz. owners and parties interested in the Vessel MT Pratibha Cauvery for a sum of Rs. 3.59 Lakhs together with compensation for pain and suffering.

3. A writ petition W.P. No. 31942 of 2012 was also filed by the same plaintiff in C.S. No. 89 of 2013 seeking an enquiry into the incident in respect of the vessel MT Pratibha Cauvery and to take appropriate action against the owner of the said vessel, namely M/s. Pratibha Shipping Company Limited, Mumbai. In that writ petition, an interim order was passed by a learned Single Judge of this Court on 28.11.2012, recording an Undertaking of the owner company to deposit interim compensation of Rs. 30.00 Lakhs by 05.12.2012 and thereafter, on 21.12.2012, after hearing the parties interested in the said matter, the Court directed the Company, M/s. Pratibha Shipping Company Limited, Mumbai, to deposit the admitted sum of Rs. 87,45,300/- as an interim compensation for the legal heirs of the deceased crew members. A further direction was issued to deposit either a further sum of Rs. 5.00 Crores or provide a bank guarantee for the said sum of Rs. 5.00 Crores for a period of three years or to furnish immovable property as security for satisfaction of such claims.

4. In the aforesaid C.S. No. 89 of 2013, the learned Single Judge of this Court, on 18.4.2013, directed the sale of the said vessel MT Pratibha Cauvery, which was salvaged by one M/s. Smit India Marine Services Private Limited of Bombay and finally, the said Vessel was sold for a total consideration of Rs. 15,64,80,000/- and the said sum is lying in deposit with this Court. In the course of time, several claim petitions have been filed by various claimants in the Admiralty Jurisdiction of this Court.

5. In the meanwhile, winding up proceedings were initiated against the owner company M/s. Pratibha Shipping Company Ltd. in Mumbai High Court in Company Petition No. 128 of 2013 and a Provisional Liquidator came to be appointed by the Bombay High Court on 28.07.2014.

6. With the appointment of the Official Liquidator in the said winding up proceedings before the Bombay High Court, the Official Liquidator raised an objection in this regard in the pending Civil Suit No. 89 of 2013 that the said suit and other similar claim petitions in Admiralty Jurisdiction cannot be proceeded with, without obtaining the prior leave of the Bombay High Court in terms of Section 446 of the Companies Act, 1956, whereas the claimants pursuing their claims under the Admiralty jurisdiction of this Court have opposed the said stand of the Official Liquidator on the ground that the proceedings under the Admiralty jurisdiction are proceedings-in-rem against the vessel in question and to satisfy their maritime lien, they not on

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