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2019 (8) TMI 1487 - HC - Companies LawScope of the Admiralty jurisdiction - obtaining leave of the Company Court under the provisions of the Companies Act while dealing with special original jurisdiction cases like under the Admiralty jurisdiction of specified High Courts - Whether in Admiralty suits filed in the original jurisdiction of this Court the leave of the High Court / Tribunal under Section 446 of the Companies Act 1956 (now Section 279 of new Companies Act 2013) to file or proceed with such a suit is required to be obtained by the plaintiffs or not after the Winding Up Order is passed by the Court and an Official Liquidator or Provisional Liquidator is appointed by that Court / Tribunal? Scope of admiralty jurisdiction - HELD THAT - The lead case on the scope of admiralty jurisdiction is undoubtedly the one propounded in M.V. ELISABETH AND ORS. VERSUS. HARWAN INVESTMENT AND TRADING PVT. LTD. HANOEKARHOUSE SWAT 1992 (2) TMI 369 - SUPREME COURT in which it was held that In view of Section 3(15) a foreign ship falls within the jurisdiction of the High Court where the vessel happens to be at the relevant time - i.e. at the time when the jurisdiction of the High Court is invoked or where the cause of action wholly or in part arises - The above judgment of M.V.Elisabeth was followed by the Hon ble Supreme Court later on in various cases and one amongst them being in the case of M.V.Al Quamar v. Tsavliris Salvage (International) Ltd. 2000 (8) TMI 1124 - SUPREME COURT in which the Supreme Court while holding that the High Courts of Calcutta Bombay and Madras have such Admiralty Jurisdiction like the English Courts had under the provisions of Colonial Courts of Admiralty Act 1890 the Andhra Pradesh High Court being the successor of High Court of Madras as some territories of erstwhile State of Madras were included in the State of Andhra Pradesh also will have such Admiralty jurisdiction. The provisions of the Admiralty Act 2017 enacted by Parliament in India also defines the terms like Admiralty jurisdictions Admiralty proceedings arrest of ships maritime claim and maritime lien vessel territorial waters etc. The said enactment also confers Admiralty jurisdiction now upon all the coastal High Courts like High Court of Calcutta Bombay Madras Karnataka Gujarat Orissa Kerala Hyderabad Andhra Pradesh or any other High Court which may be notified by the Central Government. The adjudication of the admiralty claims by the Madras High Court in its original Admiralty jurisdiction while trying the civil suit and other maritime claims the plaintiff do not require any leave of the Bombay High Court in view of the winding up order passed against the owner company M/s. Pratibha Shipping Company Limited and such maritime claims deserve to be adjudicated and proceeded further without any intervention of the Official Liquidator attached with Bombay High Court in pursuance of the winding up order passed by the Bombay High Court in the winding up petition filed against the owner company - in the field of recovery of dues from the corporate entities we are of the opinion that putting the requirement of obtaining prior leave to undertake these proceedings under these enactments or Special Laws from the winding up Court or Company Court is not envisaged in the Scheme of the development of laws and therefore any contra opinion on that would lead to unnecessary obstacles and hindrance in the exercise of special jurisdictions by the special Tribunals or Courts under these special recovery laws as well as the special law like the Admiralty jurisdiction of this Court. Thus the leave of the Company Court / Tribunal under the provisions of Section 446 of the Companies Act 1956 or Section 279 of the new Companies Act 2013 is not required to institute or proceed with the suit / trial under the Special Law like under Admiralty Jurisdiction of this Court - appeal disposed off.
Issues Involved:
1. Requirement of leave under Section 446 of the Companies Act, 1956 (now Section 279 of the Companies Act, 2013) to file or proceed with Admiralty suits after a winding-up order. 2. Jurisdiction and precedence of Admiralty Law over the Companies Act. 3. Application of Special Law versus General Law in the context of Admiralty claims. Issue-wise Detailed Analysis: 1. Requirement of Leave under Companies Act: The core legal question addressed in these appeals was whether plaintiffs need to obtain leave from the High Court or Tribunal under Section 446 of the Companies Act, 1956 (now Section 279 of the Companies Act, 2013) to file or proceed with Admiralty suits after a winding-up order is passed and an Official Liquidator is appointed. The court concluded that such leave is not required. The Admiralty jurisdiction exercised by the High Courts under the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, being a Special Law, does not mandate obtaining leave from the Company Court. This Special Law prevails over the General Law, i.e., the Companies Act. 2. Jurisdiction and Precedence of Admiralty Law: The Admiralty jurisdiction of the High Courts, as established in the case of M.V. Elisabeth v. Harwan Investment and Trading Private Limited [AIR 1993 SCC 1014], allows High Courts to deal with maritime claims against vessels within their jurisdiction. The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, which came into effect on April 1, 2018, further solidifies this jurisdiction. The court emphasized that Admiralty actions are proceedings in rem against the vessel and not in personam against the company, thus not requiring leave from the Company Court. 3. Application of Special Law versus General Law: The court highlighted that Special Laws, such as the Admiralty Act, 2017, take precedence over General Laws like the Companies Act when there is a conflict. This principle was supported by the Supreme Court's judgment in Allahabad Bank v. Canara Bank [(2000) 4 SCC 406], which upheld the exclusive jurisdiction of Special Tribunals under the Recovery of Debts due to Banks and Financial Institutions Act, 1993, over the Company Court. The court reiterated that the Admiralty Act, 2017, being a Special Law, overrides the provisions of the Companies Act concerning the requirement of leave to proceed with Admiralty suits. Conclusion: The court affirmed that plaintiffs in Admiralty suits do not need to obtain leave from the Company Court under Section 446 of the Companies Act, 1956, or Section 279 of the Companies Act, 2013. The Admiralty jurisdiction under the Admiralty Act, 2017, allows for the continuation of proceedings against the vessel without such leave. The judgment emphasized the precedence of Special Laws over General Laws in the context of maritime claims and the unique nature of Admiralty jurisdiction as proceedings in rem. The appeals were disposed of accordingly, with no costs, and connected miscellaneous petitions were closed.
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