Bombay High Court
Icici Bank Limited vs Gol Offshore Limited Cin ... on 16 August, 2017
Bench: A. K. Menon
hcs
CAL_299_17
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMPANY APPLICATION (L) NO.299 OF 2017
IN
COMPANY PETITION NO.756 OF 2014
In the matter of Companies Act 1956
And
In the matter of winding up of
GOL Offshore Ltd. a company
incorporated under the Companies
Act, 1956 having its registered office
at Energy House, 81. D.N.Road,
Mumbai 400 001
ICICI Bank Ltd. .. Applicant.
Export Import Bank of India .. Petitioner.
Mr. Ashish Kamat with Mr. Ankit Lohia and Heryle Fernandes i/b AZB &
Partners for the Applicant.
Ms. Aneesa Cheema i/b Verus for the petitioner
Ms.Nirali Chopra i/b Junnarkar & Associates for Respondent.
Mr. Mahendhar Aithe, Company Prosecutor for OL present.
CORAM : A.K. MENON , J.
DATED : 16TH AUGUST, 2017
P.C. :
1. By this company application, the applicant ICICI Bank Ltd.
seeks leave to exercise its rights as a secured creditor and as a sole
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mortgagee under Section 51(1) of Merchant Shipping Act, 1958 to take
possession of and effect sale of the mortgaged vessel - M.T. Sudhir Mulji. In
the alternative the bank seeks a direction to the provisional liquidator
appointed vide order dated 5th May, 2017 to take possession of mortgaged
vessel, hand over possession of the vessel to the applicant and facilitate its
sale and such other further orders and directions to the provisional
liquidator as may be necessary for sale of the mortgaged vessel.
2. The application is made in a company petition filed by the
Export Import Bank of India. The application is supported by an affidavit of
Mr. Abhinav Tiwari. It is contended that the applicant had provided a
Rupee Loan Facility to the company in liquidation as a term loan for Rs.1,500
million to meet the funding requirement of the company. The facility
agreement amended by a Supplemental and Amendatory agreement dated
25th September, 2012. Several other short term loan facilities were also
granted into. The company in liquidation is said to have executed deeds of
mortgage dated 27th September 2012, 30th October 2012, 25th June 2013,
24th December 2013, 30th June 2014 and 30th September 2014 in favour
of the applicant creating first exclusive charge over the vessel and
second charge over the other vessels.
3. The applicant has averred that it had produced the Deeds of
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Mortgage before the Registrar at the Port of Registry and the Registrar
recorded mortgage over the vessel in favour of the applicant under
Registration Number 2740. An Encumbrance Certificate No.RS-1337/21731
dated 10th December 2014 is stated to have been issued by the Mercantile
Marine Department at Mumbai.
4. Mr. Kamat submitted that during the period 30th June 2016 to
30th June 2017 the company defaulted in repayment of the loans and a sum
of Rs.161.5 million was due and payable. In view of default, the company
had issued a public notice inviting bids for the vessel with intention to sell
the vessel and use the proceeds towards settlement of the applicant's dues.
Accordingly, a public notice was issued in the Trade Winds magazine
inviting bids for sale of the vessel. In response A K Ship Management and
Services expressed its intention to purchase vessel. The purchaser has
addressed a letter dated 25th April 2017 setting out broad terms on which
purchase was to be executed and applicant in May 2017 agreed in
principle to purchase the said vessel subject to requisite approvals
obtained from the authorities. The purchaser had agreed to purchase the
vessel for consideration of Rs.2.90 crores although the value of vessel had
been ascertained as Rs.2.50 crores. The purchase price is thus higher than
the value ascribed. The vessel is thus proposed to be sold at a fair price.
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5. In the intervening period on 5th May, 2017 this Court passed
an order directing the Official Liquidator to take possession of the assets of
the company. A copy of the order is annexed to the affidavit in support.
As a result the Official Liquidator has informed the applicant that he has
taken possession of the assets of the company on 29th June, 2017. On 29th
June, 2017 itself the applicant and its Advocate informed the Official
Liquidator that the applicant is enforcing its mortgage created over vessel in
exercise of its rights under Section 51 of the Act to secure repayment of loan
facilities granted by the applicant to the company and that the applicant
could proceed to the sale of vessel. It is contended by Mr. Kamat that the
applicant is only registered mortgagee of the vessel and therefore entitle to
recover dues by selling vessel as aforesaid as a secured creditor.
Accordingly, Mr. Kamat seeks an order from this order of this Court, since
the company is in liquidation, permitting exercise its discretion under
Section 51 and realise value of the outstanding bills.
6. The application is opposed by the liquidator by filing an
affidavit dated 8th August, 2017. The liquidator has deposed that after the
order dated 5th May, 2017 he had taken inspection of the records
maintained by the office of the Registrar of Companies and attempted to take
possession of the registered office of the company but since the registered
office was working and there were 31 vessels belonging to the company,the
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liquidator has only taken symbolic possession of the registered office and 14
vessels lying at Bombay Port Trust after obtaining an undertaking of the
company that they will safeguard and maintain the vessels. Particulars of
the vessels are set out in paragraph 3 of the affidavit one of which at Item
No.11 is M.T.Sudhir Mulji and date of taking possession is shown as 4th
July, 2017. According to the liquidator the applicant has not produced
any documentation for creation of the charge with Registrar of Companies
under Section 125 of the Companies Act. It is admitted that the transaction
between the applicant and company in liquidation was prior to the
appointment of the liquidator and hence he denies the transaction for want of
knowledge.
7. It is contended that the applicant's claim is not adjudicated by a
competent Court. The applicant cannot simplicitor sell the vessel even
assuming that it has got mortgage on it. According to the affidavit Section
51 of the Merchant Shipping Act does not empower to sell the vessel
without intervention of the Court and the claim of the applicant is yet to be
determined. Thus, it is contended that the applicant should file its claim
with the liquidator for sell of the vessel. Reliance is placed on the minutes of
the meeting recorded at the time of taking possession of the vessel.
8. Mr. Kamat, learned counsel for the applicant relied upon
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judgment of the Madras High Court in case of Interaccess Marine
Bunkering Ltd. and Ors. vs. K.M. Allauddin and Ors. (2009) 6
MLJ 158 wherein the High Court had observed that under Section 51(1)
of the Merchant Shipping Act a statutory right was conferred upon the
registered mortgagee of a ship, to realise the amount due under the
mortgaged ship even without approaching the High Court. The right
conferred under the Act is similar to the rights under Section 69(1) of the
Transfer of Property Act. Therefore he submitted that a similar view could
be taken in the present case.
9. Mr. Kamat also relied upon order dated 26th November, 2009
in case of Company Application No.1170 of 2009 in case of Mineral Sales
Pvt. Ltd. vs. Otoklin Plants and Equipments Ltd. (in Liqn.) and
International Asset Reconstruction Co. Pvt. Ltd. wherein the
applicant has exercised the powers under the Securitization Act and
possession was taken of mortgaged land which was in possession of the
liquidator and having held that the provisions of the Recovery of Debts Due
to Financial Institution Act, 1993 would override the powers under the
Companies Act and a secured creditor while proceeding under RDB Act or
Securitization Act does not need to take permission from the Company Court
since Section 35 of the Securitization Act gives overriding effect to the
provisions of the Act.
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10. In the circumstances the question to be considered in the
present case is whether the provisions of Merchant Shipping Act would
override the provisions of Companies Act. Section 51(1) of the Act clearly
provides that if there is only one registered mortgage of the ship that
mortgage will entitled to receive money under mortgage by selling the
ship without approaching the High Court and when there are two or more
registered mortgagees then different consideration will apply. In the instant
case it is case of the applicants that it is the sole mortgagee of the vessel.
This is a fact which has not been controverted by the liquidator. The
affidavit filed on behalf of the liquidator does not in any manner call into
question this aspect of the matter. The application has also set out the
particulars of proposed purchaser. Furthermore, Section 52 of the
Merchant Shipping Act records that the registered mortgage shall not be
affected by any act of insolvency after date of record of mortgage. The
mortgage shall be preferred to any right claim of other creditors of the
insolvent. Considering the effect of Section 52 the claim of the present
applicant would have to be given precedence.
11. Section 51(1) specifically deals with rights of a sole mortgagee.
It is however necessary to ensure that the applicant is only a registered
mortgagee, once that is established by operation of Section 51(1) the
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applicant will be entitled to exercise the rights of the mortgagee and
receive amounts due under the mortgage by selling the mortgaged ship or
share without approaching the High Court. This power of the sole
mortgagee is derived from Section 51 as substituted with retrospective
effect from 27th October, 1993 and it is clarified in the proviso that the right
provided under Section 51(1) shall not prevent the mortgagee from
recovering the amount due under sub-section (2) of Section 51, namely, if
there are two or more registered mortgagees they shall be entitled to recover
the amount due under the mortgage in the High Court and when passing a
decree or thereafter the High Court may direct that the mortgaged ship be
sold in execution of the decree.
12. In the circumstances I see is no merit in the contention of the
liquidator that a claim is required to be filed in the office of the liquidator
prior to taking any action and suit would have already filed, in this behalf it
is proper to observe that it will be necessary to ensure that the rights of the
mortgagee is subject to the rights of port trust, if any, would have priority.
This aspect has already been considered by the Supreme Court in the case of
ICICI Ltd. vs. Board of Trustees, Port of Calcutta (2005) 10
SCC 284 wherein it was held that under Section 64 of the Major Port Trust
Act, 1963 the port trust has the paramount right to recover its dues. In
the present case although it is not known whether the port trust has any
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claim against the vessel. It is necessary to clarify that the rights of the
applicant under Section 51(1) would be subject to the claim if any of the
Port Trust. In the circumstances, I pass the following order.
(i) The provisional liquidator appointed by order dated
5th May, 2017 shall hand over possession of the
mortgaged vessel MT Sudhir Mulji (Vessel) belonging to
the company in provisional liquidation pursuant to
provisions of Section 51(1) of the Merchant Shipping
Act, 1958.
(ii) It is clarified that the rights of the applicant shall be
subject to rights, if any, of the Port Trust in respect of
any amount that may be due to the Port Trust.
(A.K.MENON,J.)
