2018 (3) TMI 1870 - HC - Companies Law

Permission to sell three tugs - respondent under liquidation - exercise of rights under Section 51 of the Merchant Shipping Act, 1958 - HELD THAT - The Company Application to come up for hearing on 28 March 2018.

Summary

Issues:
1. Sale of three tugs in a liquidation scenario.
2. Distribution of sale proceeds.
3. Confirmation of sale and issuance of sale certificate.
4. Deposit and investment of sale consideration.
5. Maintenance of separate accounts by the Official Liquidator.
6. Disbursement of sale proceeds.
7. Payment of charges and expenses.
8. Sale of the third vessel, Sangita.
9. Retention of sum towards legal expenses.
10. Future hearing date.

Analysis:

1. The Company Application sought the sale of three tugs due to the Respondent being in liquidation. An Order directed the sale of two tugs to M/s Akil Corporation, who paid the entire sale consideration for the tugs. The distribution of sale proceeds remained undecided pending further decisions.

2. The Court confirmed the sale of the two tugs to Bansal Ship Breakers and directed the deposit of the sale consideration with the Official Liquidator. The Official Liquidator was instructed to invest the sale consideration in a fixed deposit and maintain separate accounts for expenses related to each vessel.

3. The sale certificate was to be issued by the Official Liquidator in favor of Bansal Ship Breakers, specifying that the tugs were free from encumbrances and purchased for breaking/scrap. The Official Liquidator was prohibited from disbursing any amounts without court orders and was required to consider all claims against the sale proceeds based on the priority of claims.

4. The expenses incurred for the vessels, including port charges, were to be paid from the sale proceeds. Charges payable to port authorities were to be recovered by the Official Liquidator, ensuring the delivery of the vessel to the purchaser was not delayed due to nonpayment.

5. The third vessel, Sangita, was also to be sold, with a reserved price fixed at INR 3.25 Crore. The Applicant was tasked with advertising the sale, allowing potential buyers three weeks to respond. Any expenses incurred towards manning the vessel were to be treated as liquidation expenses.

6. A sum was agreed to be retained by the Official Liquidator towards legal expenses from the sale proceeds. The judgment kept all rights and contentions of the parties regarding the sale proceeds open for future consideration, with the Company Application scheduled for a hearing on 28 March 2018.