The Board Of Trustees Of The Port Of ... vs M. V. Brahmaputra Dolphin And 2 Ors
2022 Latest Caselaw 9143 Bom

                                       1-MV BRAHMAPUTRA DOLPHIN-SREPORT55-2022.DOC

                                                                             Santosh
                           IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                            ADMIRALTY AND VICE ADMIRALTY JURISDICTION


                                 SHERIFF'S REPORT NO. 55 OF 2022
                                               IN
SANTOSH                           JUDGE'S ORDER NO. 189 OF 2021
SUBHASH
KULKARNI                                       IN
Digitally signed by
SANTOSH
                              COMM ADMIRALTY SUIT (L) NO. 22182 OF 2021
SUBHASH
KULKARNI
Date: 2022.09.14

                                 COMM ADMIRALTY SUIT NO. 36 OF 2022
17:41:51 +0530




                      The Board of Trustees of the Port of
                      Mumbai                                             ...Plaintiff
                                        Versus
                      M. V. Brahmapurtra Dolphin (IMO
                      No.7608916) & ors.                              ...Defendants


                      Mr. Shubro Dey, for the Plaintiff in COMAS/80/2021.
                      Mr. Ajay Fernandes, a/w Ms. Sneha Pandey, i/b Motiwala &
                            Co., for the Plaintiff in COMAS/36/2022.
                      Mr. D. S. Chaudhary, Dy. Sheriff, present.
                      Mr. B. A. Bansal - Bansal Ship Breakers.
                      Mr. Ashok Jain - Om Namo Venture.
                      Mr. Manoj Kumar Jain- Saibaba Ship Breaking Company.
                      Mr. Arif S. Masani - Luck Steel Industries.
                      Mr. Rajnish Gupta - Rajnish Steels.
                      Mr. Rajendra - Rajendra Ship Braking.
                      Mr Devesh Gupta- RSG Venture LLP.
                      Mr. Amit Jain - Hatni Steels.
                      Mr. Abu - A. A. Associates.
                      Mr. Priyal Seth- Advocate appearing for Last Voyage.

                                                  CORAM:     N. J. JAMADAR, J.

                                                  DATED :    13th SEPTEMBER, 2022

                      ORDER:-

1. M. V. Brahmapurtra Dolphin (IMO No.7608916) carrying

an Indian Flag was arrested pursuant to an order passed by this

1-MV BRAHMAPUTRA DOLPHIN-SREPORT55-2022.DOC

Court on 28th October, 2021, at the instance of the Port Trust for

non-payment of Port dues. On 18th August, 2022 in Sheriff's

Report N.49 of 2022, defendant no.1 - vessel was ordered to be

sold in an auction sale. JB Boda Insurance Surveyors and Loss

Assessors Pvt. Ltd. (JB Boda) came to be appointed to carry out

the valuation of defendant no.1 - vessel. The Sheriff was allowed

to conduct the auction sale in accordance with the Schedule of

Auction Sale annexed to the Sheriff's Report.

2. Sheriff has obtained the valuation report from JB Boda

Insurance Surveyors. Sheriff has also conducted the auction

process. The report reveals that in all 10 bids are received. Only

one bidder M/s. Last Voyage DMCC has submitted the bid for

'trading' purpose. Rest of the bidders have submitted the bid for

scrapping.

3. Today, each of the 10 bids, in sealed envelope, were opened

in the Court. After opening the bids, the bidders/their

representatives, who were present in the Court, were apprised of

the value of each of the bids. M/s. Last Voyage DMCC, who

submitted the bid for trading purpose, quoted the price of

Rs.55,35,600/-. Out of the rest of nine bids for scrapping

purpose, M/s. Om Namo Venture's bid of Rs.3 Crore was the

highest.

1-MV BRAHMAPUTRA DOLPHIN-SREPORT55-2022.DOC

4. The bidders were thereafter given the option to enhance

the bid in the lot of Rs.5,00,000/- over the highest bid of Rs.3

Crore. Few of the bidders, namely, M/s. Bansal Ship

Breakers, M/s. Rejendra Ship Breakers Pvt. Ltd., M/s. A. A.

Associates and M/s. RSG Ventures LLP participated in the

bidding process, in open Court. After a process of bidding, M/s.

RSG Ventures LLP made an offer of Rs.3,85,00,000/-. At that

stage, rest of the bidders made a statement that they do not

wish to enhance the bid any more. M/s. RSG Ventures LLP's bid

of Rs.3,85,00,000/- thus turned out to be the highest bid.

5. JB Boda in their valuation report have adverted to the

facts that defendant no.1 - vessel is over 46 years and has lived

her age. She has been laid up unattended for a long period

resulting in extensive corrosion. In the opinion of JB Boda,

defendant no.1 - vessel is beyond economical repairs.

Nonetheless in the opinion of JB Boda the trading value would

be in the region of Rs.5 Crore.

6. JB Boda has also opined that having regard to the present

market situation, which is very depressed, resulting in poor

demand for Offshore vessels and defendant no.1 - vessel had

been laid up for more than three years, without operating crew,

1-MV BRAHMAPUTRA DOLPHIN-SREPORT55-2022.DOC

the value of defendant no.1 - vessel for demolition purposes

(scrapping) would be Rs.3,55,00,000/-.

7. The aforesaid factors, especially defendant no.1 - vessel

having been laid up for three years without operating crew,

bears upon the value of defendant no.1 - vessel. The valuer has

clearly opined that defendant no.1 - vessel is beyond economical

repairs. In the circumstances, the sale of the vessel for

'scrapping' purpose seems the only viable option. The highest

bid of Rs.3,85,00,000/- exceeds the value for scrapping given by

the valuer (Rs.3,53,00,000/-) by Rs.30,00,000/-.

8. In the totality of the circumstances, I am satisfied that the

bid of Rs.3,85,00,000/-, is a fair and optimum price for

defendant no.1 - vessel. In my view, no fruitful purpose would

be served in putting the vessel for re-auction. It is quite

possible that re-auction may not yield a better price.

9. A useful reference, in this context, can be made to the

observations of the Supreme Court in the case of Kayjay

Industries (P) Ltd. vs. Asnew Drums (P) Ltd. and ors1, wherein

the Supreme Court observed that if Court sales are too

frequently adjourned with a view to obtain a higher price it may

turn out to be a self-defeating exercise.

10. Paragraph 7 of the said judgment reads as under:

1 (1974) 2 SCC 213.

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"7. 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 self-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 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."

(emphasis supplied)

11. Mr. Fernandes, the learned Counsel for the plaintiff and

Mr. Dey, the learned Counsel for the plaintiffs in

COMAS/80/2021, in which defendant no.1 - vessel was first

arrested on 3rd February, 2020, submit that the plaintiffs have

no objection if the highest bid of M/s. RSG Ventures LLP is

accepted.

1-MV BRAHMAPUTRA DOLPHIN-SREPORT55-2022.DOC

12. I am, therefore, inclined to accept the bid of M/s. RSG

Ventures LLP.

13. M/s. RSG Ventures LLP has deposited EMD of

Rs.50,00,000/-. The balance amount of Rs.3,35,00,000/- be

deposited by RSG Ventures LLP with the office of Sheriff of

Mumbai on or before 29th September, 2022.

14. It is made clear that if the aforesaid balance amount is not

paid and/or deposited with the office of Sheriff, within the

aforesaid period, the sale shall stand cancelled and the earnest

deposit shall stand forfeited. In that event, the Sheriff shall

move a fresh report for re-auctioning the defendant - vessel.

15. Upon the receipt of the entire sale consideration, the

Prothonotary and Senior Master / Admiralty Registrar of this

Court will issue a Bill of Sale to RSG Ventures LLP (and no one

else). No nominees will be mentioned in the Bill of Sale. The Bill

of Sale shall also specify that the vessel is sold for "scraping

only" and not for trading.

16. After the sale of the defendant - vessel is confirmed in

favour of RSG Ventures LLP, the defendant - vessel shall be

handed over to RSG Ventures LLP, free from all encumbrances.

Needless to clarify that this is subject to entire sale

1-MV BRAHMAPUTRA DOLPHIN-SREPORT55-2022.DOC

consideration being received by the office of Sheriff, Mumbai,

within the above stipulated period.

17. The Sheriff shall communicate to the Port, Customs and

other Authorities informing them about the sale of the

defendant - vessel pursuant to this order.

18. The earnest money deposited by rest of the bidders shall

be returned to them by the Sheriff within a period of two weeks

from today.

19. The Sheriff is permitted to make payment of Rs.1,84,654/-

to M/s. Eureka Advertisement Agency towards advertisement

charges from the amount deposited by the plaintiff with the

Sheriff.

20. The Sheriff is permitted to make payment of Rs.2,06,500/-

to JB Boda Insurance Surveyors and Loss Assesors Pvt. Ltd.

towards valuation charges from the amount deposited by the

plaintiff.

21. The Sheriff's Report No.55 of 2022 accordingly stands

disposed.

[N. J. JAMADAR, J.]