2018 (3) TMI 1871 - HC - Companies Law

Sale of the vessel Sangita owned by the company in liquidation - HELD THAT - The amount to be deposited by M/s. Vedant Ship Management shall be invested by the Official Liquidator in a Fixed Deposit of a Nationalized Bank. No amount shall be disbursed without seeking appropriate orders from the Court. The charges of the vessel including all port charges up to date shall be to the Official Liquidator's account and shall be paid from out of the sale proceeds. It is clarified that all claims against the sale proceeds of the vessel including maritime liens and claims shall be considered by the Official Liquidator in accordance with the applicable law of priority of claims. The charges receivable by the port authorities in respect of the vessel shall be recovered from the Official Liquidator. The Port authorities shall not hold up the delivery of the vessel to the purchaser for non payment of these charges - Application disposed off.

Summary

Issues: Sale of vessel in liquidation, bidding process, valuation report, sale confirmation, deposit of bid price, investment of sale proceeds, payment of charges, declaration of dividend, manning the vessel.

The judgment by the BOMBAY HIGH COURT addressed several key issues. Firstly, the Court noted the sale of a vessel owned by a company in liquidation and the need for suitable directions for the sale process. Two parties, M/s Tirupati Vessels and M/s Vedant Ship Management, submitted offers for the vessel. After bidding in Court, M/s Vedant Ship Management offered the highest bid of &8377; 2.10 crores, which was accepted as the winning bid since the other party did not match it.

Secondly, the Court considered the reserved price based on a valuation report estimating the vessel's value at &8377; 3.25 crores. Despite the current bid being below the valuation, the vessel was in a precarious condition, necessitating an expeditious sale. The Court decided against re-advertising the sale, as further delays could result in a lower offer. Therefore, the offer from M/s Vedant Ship Management was confirmed, and they were directed to deposit the balance bid price within 21 working days.

Additionally, the judgment outlined the terms of the sale, including the deposit of the bid amount by M/s Vedant Ship Management into a Fixed Deposit account, payment of vessel charges from the sale proceeds, and consideration of claims against the sale proceeds in accordance with the law of priority of claims. The Official Liquidator was tasked with managing the sale proceeds and presenting a report to the Court for further directions and declaration of dividends.

Moreover, the Court addressed the issue of manning the vessel, permitting M/s Vedant Ship Management to depute two representatives as crew members. The judgment also highlighted the need for the applicant to deposit the Earnest Money Deposit with the Official Liquidator. Finally, the Court expedited the issuance of a certified copy of the order for all parties involved to act upon. The company application was disposed of, while preserving the rights and contentions of the parties regarding the sale proceeds.