Cockett Marine Oil Dmcc vs Uv Kamrup And Anr
2021 Latest Caselaw 6113 Bom

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                  IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                  ADMIRALTY AND VICE ADMIRALTY JURISDICTION
                           IN ITS COMMERCIAL DIVISION
                    INTERIM APPLICATION (L) NO.8356 OF 2020
                                      IN
                 COMMERCIAL ADMIRALTY SUIT (L) NO.6656 OF 2020

Cockett Marine Oil DMCC                       ....Applicant/Plaintiff
          V/s.
UV Kamrup (IMO No.8218108) & Anr.           ....Defendants
                                     ----
Mr. Dhruva Gandhi a/w. Mr. Naishadh Bhatia i/b. M/s. Grawford Bayley and
Co. for applicant/plaintiff.
Mr. Siddharth Singh i/b. Anoma Law Group LLP for defendant no.2.
Mr. D. S. Choudhari, Dy. Sheriff of Mumbai present.
Bidder :-
1] M/s. Bansal Ship Breakers: Represented by Mr. Punit Agrawal.
2] M/s. Rajnish Steels :- Represented by Mr. Rajnish Gupta.
                                     ----
                                            CORAM : K.R.SHRIRAM, J.

DATED : 6th APRIL 2021

P.C. :

1 Pursuant to order dated 16th March 2021, the Sheriff has

published auction sale notice as mentioned in paragraph 2 of Sheriff's

Report No.34 of 2021. In response thereto, Sheriff has received two bids,

one from M/s. Bansal Ship Breakers and the other from M/s. Rajnish Steels

and both have given E.M.D. of Rs.1,00,00,000/- (Rupees One Crore Only)

to Sheriff of Mumbai.

2 M/s. Bansal Ship Breakers had offered Rs.80,00,000/- and

M/s. Rajnish Steels had offered Rs.63,75,000/-. The Court asked

M/s. Bansal Ship Breakers and M/s. Rajnish Steels to outbid each other.

M/s. Rajnish Steels offered Rs.82,00,000/- first and then gave a final offer

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of Rs.90,00,000/-. Minimum increase, the Court stated, should be

Rs.2,00,000/-. M/s. Bansal Ship Breakers increased its offer to

Rs.84,00,000/- and finally offered Rs.92,50,000/-. Both had bid to purchase

the vessel for demolition/scrapping.

I am inclined to accept the offer of M/s. Bansal Ship Breakers of

Rs.92,50,000/- because the offer of Rs.92,50,000/- is 92.5% of the

demolition price indicated by J.B. Boda.

3 Moreover, the Apex Court in Kayjay Industries (P) Ltd. Vs.

Asnew Drums (P) Ltd. & Ors.1 observed that if court sales are too frequently

adjourned with a view to obtain a higher price, it may prove a self defeating

exercise. It will be useful to reproduce paragraph-7 as under:-

"Certain salient facts may be highlighted in this context. A court sale is a forced sale and, notwithstanding the competitive element of a public auction, the best price is not often forthcoming. The judge must make a certain margin for this factor. A valuer's report, good as a basis, is not as good as an actual offer and variations within limits between such an estimate, however careful, and real bids by seasoned businessmen before the auctioneer are quite on the cards. More so when the subject matter is a specialised industrial plant, which has been out of commission for a few years, as in this case, and buyers for cash are bound to be limited. The brooding fear of something out of the imported machinery going out of gear, the vague apprehensions of possible claims by the Dena Bank which had a huge claim and was not a party, and the litigious sequel at the judgment debtor's instance, have `scare' value in inhibiting intending buyers from coming forward with the best offers. Businessmen make uncanny calculations before striking a bargain and that circumstance must enter the judicial verdict before deciding whether a better price could be had by a postponement of the sale. Indeed, in the present case, the executing Court had admittedly declined to affirm the highest bids made on May 16, 1969, June 5, 1969 and August 28, 1969, its anxiety to secure a better price being the main reason. If court sales are too frequently adjourned with a view to obtaining a still higher price it may prove a sell defeating exercise, for industrialists will lose faith in the actual sale taking place and may not care to travel up to the place of auction being uncertain that the sale would at all go through. The judgment debtor's plea for postponement in the expectation of a

1. 1974 SCC (2) 213

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higher price in the future may strain the credibility of the Court sale itself and may yield diminishing returns as was proved in this very case."

4 Since E.M.D. given by M/s. Bansal Ship Breakers is

Rs.1,00,00,000/-, by 9th April 2021 the Sheriff of Mumbai to return the

excess of Rs.7,50,000/- to M/s. Bansal Ship Breakers and certify that the

entire amount has been received.

5 Upon the Deputy Sheriff certifying that the entire amount has

been received, the Prothonotary and Senior Master shall execute a bill of

sale in favour of M/s. Bansal Ship Breakers only. No nominee or third parties

name will be accepted. The bill of sale shall have an endorsement that the

sale is only for scrapping/demolition and not for trading.

6 All charges including charges payable to Port shall be payable

by M/s. Bansal Ship Breakers from the date of bill of sale. Prothonotary and

Senior Master is directed to endeavour to issue the bill of sale on or before

9th April 2021. If the bill of sale cannot be issued for reasons attributable to

M/s. Bansal Ship Breakers then all charges including charges payable to Port

shall be payable by M/s. Bansal Ship Breakers from 9th April, 2021.

7 From the sale proceeds, Deputy Sheriff shall pay over (a) the

amount of Rs.3,65,000/- deposited by plaintiff and (b) advertisement

charges of M/s. Eureka Advertising Agency amount to Rs.1,86,052/- and the

balance sale proceeds shall be handed over to the Prothonotary and Senior

Master, High Court, Bombay, who shall invest the amount in a Fixed Deposit

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with a nationalised bank initially for a period of 1 year and to be renewed

from time to time for one year at a time until further orders.

8 Upon execution of the bill of sale, the Sheriff's office shall also

address such communication as required to the Port and Customs

Authorities and also forward a copy of this order.

9 The valuation report issued by J.B.Boda to be placed in an

envelope, sealed and kept in the safe custody of Prothonotary and Senior

Master.

10 After execution of bill of Sale, if M/s. Bansal Ship Breakers

wants copy of the valuation report, then Prothonotary and Senior Master's

office to provide a photo copy thereof.

EMD of the unsuccessful bidder to be returned.

11 In view of the above, Sheriff's Report No.34 of 2021 as well as

Interim Application (lodging) No.8356 of 2020 stands disposed.

12 All to act on authenticated copy of this order.

(K.R. SHRIRAM, J.)

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