TMI Blog1998 (4) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... dator to depute its representative to remain present at the sale and the same right is given to the first respondent as well. - CIVIL APPEAL NO. 2085 OF 1998 ARISING OUT OF SLP (C) NO. 5043 OF 1997 - - - Dated:- 16-4-1998 - MRS. SUJATA V. MANOHAR AND D.P. WADHWA, JJ. Ashok H. Desai, Attorney General, U.J. Makhija, Dinesh Mathur, Mrs. A.K. Verma for the Appellant. R.P. Bhatt, M.N. Shroff and Ms. Suvira Lal for the Respondent. JUDGMENT Mrs. Sujata V. Manohar, J. - Leave granted. 2. This appeal is filed by the Board of trustees of the Port of Mumbai in respect of an order passed by the Patna High Court in Company Petition No. 5 of 1990 for winding up Thakur Shipping Co. Ltd. 3. A vessel belonging to Thakur Shipping Co. Ltd. M.V. Varuna Kachhapi arrived at the Port of Mumbai in May, 1985, and was laid up at anchorage. It became liable to pay anchorage and other charges leviable under the provisions of the Major Port Trusts Act, 1963, as amended by the Major Port Trust (Amendment) Act of 1974, and the Dock Scale of Rates framed thereunder by the appellant. In view of the Port Trust charges which remained unpaid, the appellant Port Trust arreste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of 16-8-1996, praying that the appellant alone be allowed to sell the vessel and retain the sale proceeds towards its dues. They would remit the balance amount, if any, to the official liquidator. The High Court has passed the impugned order of 26-11-1996, disallowing such modification. The High Court has directed that the vessel be sold after issuing a global advertisement. The High Court has further directed that since Thakur Shipping Co. Ltd. do not have any money which could be utilised to meet the cost of advertisement or sale, the appellant shall meet the costs of such advertisement and sale and all incidental charges thereto which amounts, the appellant would be entitled to recover as a first charge on the sale proceeds. This order is being challenged in the present appeal. 7. Under section 529 of the Companies Act, in the winding up of an insolvent company, the same rules shall prevail and be observed with regard, inter alia, to the debts provable and the respective rights of secured and unsecured creditors as are in force for the time being under the law of insolvency with respect to the estates of persons adjudged insolvent. The proviso to section 529(1) sets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es or the cost of the distress or arrest or of the keeping of the same remain unpaid for a space of five days next after any such distress or arrest has been made, the Board may cause the vessel so distrained or arrested to be sold. The proceeds of such sale shall satisfy such rates or penalties and costs including the costs of sale remaining unpaid. The surplus, if any, is to be rendered to the master of such vessel on demand. 9. The statutory right under section 64 embodies this overriding right of the harbour authority over the vessel for the recovery of its dues. This right stands above the rights of secured and unsecured creditors of a company in winding up - in the present case, the shipping company which owns the vessel. The harbour authorities allow ships - national or foreign to anchor and avail of the services provided by them. For payment, they look to the vessel. The owner may be foreign or even unknown to the harbour authority. The latter's right to recover its due is not affected by any pending proceedings against the owner in any court - whether in winding up or otherwise. The harbour authority can arrest the vessel while it is anchored in the harbour and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or, when possible, direct the available securities to be marshalled. [Emphasis supplied] 11. The Bombay High Court in the case of Forwarding (P) Ltd. v Trustees, Port of Vizagapatnam [1987] 2 Comp. LJ. 89 (Bom): [1987] 61 Comp. Cas. 513 (Bom.), has held that the power of arrest and sale of a vessel belonging to a company in winding up, by the port authorities emanates from section 64 of the Major Port Trusts Act, 1963, and there is no question of the port authorities resorting to a legal proceeding for that purpose. Hence the question of their obtaining leave under section 446 of the Companies Act, 1956, does not arise when exercising the statutory rights under section 64. 12. In M.K. Rangnathan v. Government of Madras[l955] 2 SCR 374 at 383, 387, this court considered the position of the secured creditor in a winding up proceeding as also of a person entitled to attach and sell any property without the intervention of the court. It said that a secured creditor stands outside the winding up and can realise his security without the leave of the court; though if he files a suit or takes legal proceedings, he will require the leave of the winding up court. Attachme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he South [1968] 1 All ER 1163, the court held that where it would be beneficial for all concerned that the Admiralty Marshal should sell the ship and pay the claim of the dock authority out of the proceeds of the sale, the court may so authorise the Marshal to sell the ship free from the statutory possessory lien of the Harbour Board and authorise the Marshal to pay the Harbour Board's dues provided the Harbour Board gives a written undertaking to the court not to exercise its rights of detention and sale. Therefore, without the consent of the Harbour Board, their right of detention and sale cannot be transferred from the ship itself to the fund in the court constituted from the proceed[s] of the sale of a ship. 17. In the present case, the appellant is objecting to the directions given by the court in winding up directing the official liquidator to sell the vessel along with the appellant and to bring the sale proceeds into court. The appellant has a supervening priority in respect of its claims against the vessel, it has a right to sell that vessel and realise the sale proceeds. The appellant cannot be divested of this statutory right without its consent or be subject t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
