Hero Fincorp Limited vs Mv Tag 22 Imo No 9127318
2023 Latest Caselaw 3020 Bom

2023:BHC-OS:2041


                                                                              19.ia.2575.23.doc




                     IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                   ADMIRALTY AND VICE ADMIRALTY JURISDICTION
                                   IN ITS COMMERCIAL DIVISION
                         INTERIM APPLICATION (L) NO. 2575 OF 2023
                                                       IN
                           COMM. ADMIRALTY SUIT NO. 51 OF 2019

            Hero Fincorp Limited                                   ...Applicant/
                                                                   Original Plaintiff

            In the matter between

            Hero Fincorp Limited                                    ... Plaintiff

                     Versus

            MV TAG 22 (IMO No.9127318)                             ...Defendant




            Mr. Shantanu Singh i/b Aagam Doshi, for the Applicant/Plaintiff
            Mr. Ajai Fernandes a/w Ms. Sneha B. Pandey i/b Motiwalla &
            Co., for the Plaintiff in COMAS No.48 of 2021.
            Ms. Nidhi Shah i/b Amir Arsiwala, for the Liquidator of TAG
            Offshore Limited.



                                      CORAM         : B. P. COLABAWALLA, J
                                      DATE          : MARCH 28, 2023

            P. C.

            1.

The Plaintiff/Applicant seek payment out/release of

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Rs.13,75,54,982/- (Thirteen Crore Seventy Five Lakhs Fifty Four

Thousand Nine Hundred And Eighty Two Only) out of the balance

sale proceeds of the Defendant vessel together with accrued interest

and a costs towards satisfaction of their decree.

2. The Defendant vessel was arrested on 18 th March, 2019 and

subsequently, was sold to M/s. Shree Ram Shipping Industries Pvt.

Ltd. on 21st October, 2020 for a total sale consideration of

Rs.3,70,00,000/-. The balance sale proceeds of Rs.3,66,13,761/- is

now deposited with this Court.

3. Mr. Singh, the learned Advocate appearing on behalf of the

Applicant, submits that this Court, on 15 th November 2022, decreed

the Applicant/Plaintiff's suit for an amount of Rs.13,75,54,982/-

along with interest @ 9% p.a. from 5 th March, 2019 till payment

and/or realization. A sum of Rs. 5,00,000/- was also allowed

towards a costs by the said judgment and order.

4. Mr. Singh submits that the Applicant/ Hero Fincorp Limited's

status as a valid maritime claimant under Section 4(1)(c) of the

Admiralty Act, 2017, is determined pursuant to a final judgment

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and decree dated 15th November 2022.

5. The Applicant also submits that public notice in terms of Rules

1087 and 1088 of the Bombay High Court Admiralty Rules 2017,

was issued by the Sheriff of Mumbai inviting claims against the sale

proceeds of the Defendant vessel. The notice period inviting claims

against the sale proceeds of the Defendant vessel expired on 20 th

July 2022.

6. Mr. Fernandes, the learned counsel appearing for the Board of

Trustees of the Port of Mumbai ("the Port"), submits that the Port

has filed Commercial Admiralty Suit No. 48 of 2021 asserting a

maritime lien over the sale proceeds of the Defendant vessel in the

sum of Rs.50,93,128/- together with interest at the rate of 15% per

annum on the sum of Rs.43,75,658/- from 01/06/2021 till payment

and/or realization and costs of the suit.`

7. Mr. Fernandes further submits that as on the date of this order, the

total claim of the Port including interest is Rs.65,12,675/- (Rupees

Sixty Five Lakhs Twelve Thousand Six Hundred Seventy Five

Only). He submits that the Port is yet to obtain a decree and the

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claim amount may increase. He, therefore, requests that an amount

of Rs.68,00,000/- (Rupees Sixty Eight Lakhs Only) [out of the

balance sale proceeds] be kept aside, which the Port will pursue in

its suit. The same is accepted.

8. Mr. Singh submits that after keeping aside the sum of

Rs.68,00,000/- [towards the claim of the Port], the decree holder/

Applicant should be permitted to withdraw the balance sale

proceeds towards partial satisfaction of its decretal amount. The

Applicant agrees and undertakes to bring back any amount, if so

directed by the court, together with such interest, to satisfy any

claims ranking higher in priority to the Applicant's claim.

9. Heard the learned Counsels for the parties.

10. Evidently, the Applicant has obtained a decree. The Port is yet to

obtain a decree.

11. Under Section 10(1) of the Admiralty Act, the order of priority of

maritime claims is provided as under:

"10. Order of priority of maritime claims - (1) The order of maritime claims determining the inter se priority in an

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admiralty proceeding shall be as follows:

(a) a claim on the vessel where there is a maritime lien;

(b) registered mortgages and charges of same nature on the vessel;

(c) all other claims;"

12. The claim of the Applicant, based on a registered mortgage of the

Defendant Vessel, falls under clause (b) of sub-section (1) of

Section 10 of the Admiralty Act. In contrast, the claim of the Port

[which is in the nature of a maritime lien] stands on a higher

pedestal under clause (a) of sub-section (1) of Section 10. The

adjudication of the claim of the Port, may require time as the suit/

application filed by the Port has not yet been decreed.

13. Considering these circumstances, I agree with the submissions of

Mr. Singh that Hero Fincorp Limited, who is the decree holder,

should not wait indefinitely for what is partial satisfaction of its

entire decretal amount. It will be sufficient to clarify that any claim

ranking higher to Hero Fincorp Limited, the decree holder, shall

have priority. Therefore, release of the balance sale proceeds to the

Applicant must be conditional and Hero Fincorp Limited will have

to bring back any amount [as ordered by the Court] to satisfy any

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adjudicated claims which rank higher in priority under Section

10(1) of the Admiralty Act. Mr. Singh fairly states that he has

instructions to make statement in those terms which is accepted as

an undertaking given to this Court.

14. Hence, the following order:

(a) The Prothonotary and Senior Master shall keep aside a sum of

Rs.68,00,000/- (Rupees Sixty-Eight Lakhs Only) to secure the

decree which may eventually be passed in favour of the Port in

Commercial Admiralty Suit No. 48 of 2021.

(b) After keeping aside the sum of Rs.68,00,000/- (Rupees Sixty

Eight Lakhs Only) the entire remaining sale proceeds together

with interest accrued thereon, shall be paid by the Prothonotary

and Senior Master to the Applicant towards partial satisfaction of

the decree passed in favour of the Applicant/Plaintiff.

(c) The Applicant/Plaintiff will be at liberty to seek further payment

in the event there is a surplus after satisfying the decrees which

may be passed in favour of the claimants which rank higher in

priority than the Applicants/Plaintiffs or if those claimants fail to

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prove their claims;

(d) The Applicant agrees and undertakes to bring back to Court, if

necessary, any amount required to meet the adjudicated claim of

any person having a maritime lien or claim in respect of the

Defendant vessel in priority to Hero Fincorp Limited's claim and

which cannot be met from the retention of Rs.68,00,000/-

(Rupees Sixty Eight Lakhs Only).

(e) For the purposes of implementing this order, the Prothonotary &

Senior Master will break the fixed deposits.

15. The above Interim Application is accordingly disposed of.

However, there shall be no order as to costs.

16. This order will be digitally signed by the Private Secretary/

Personal Assistant of this Court. All concerned will act on production by

fax or email of a digitally signed copy of this order.

[ B. P. COLABAWALLA, J ].

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