9911796707
TMI Blog1985 (12) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... , but the auction did not materialise. On March 15, 1984, a winding-up order was passed in respect of this company. Thereafter, the official liquidator called a meeting on April 3, 1984, when, amongst others, only one director was present so also a representative of the Bank of India being one of the secured creditors of the company. In that meeting, the official liquidator was told that efforts were being made to set aside the winding-up order and/or in any event that a scheme of compromise or arrangement would be presented. Some question about arrangements of security guards for the company property was also discussed. Thereafter, another meeting was held on May 19, 1984, and, amongst others, one Mr. Choksey of Bank of Baroda was also present. The official liquidator was then informed that Bank of Baroda was also a secured creditor and that the said bank had already filed a suit against the New India Fisheries Ltd., being Suit No. 1135 of 1985, for recovery of their dues. In so far as Bank of India was concerned, the official liquidator was informed that Bank of India was considering its position and would revert to the matter. The official liquidator then held yet another meetin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated February 4, 1985, to the official liquidator. This letter came up for discussion in the meeting of February 20, 1985, held by the official liquidator. Thereafter on February 26, 1985, an advertisement was inserted by the Port Authorities stating that the trawlers would be put up for auction. It appears that thereafter, the said Mr. Winston G. Vaz, ex-director of the company, addressed some letters to the official liquidator and these came to be discussed in the meeting held on March 15, 1985. In view of the several contentions raised by the said Vaz, he was informed that if he wanted to take steps in respect of the trawlers, he may adopt such proceedings as he chose. In view of what transpired at the said meeting on March 15, 1985, it appears that the official liquidator was persuaded to adopt proceedings seeking stay of the sale of the trawlers by the Port Trust, more especially as no individual could possibly make an application in respect of the trawlers, the company being in liquidation. On this footing, the official liquidator asked Mr. G. Vishwanath, advocate, who appeared for the company in liquidation and who was acting for Mr. Vaz and the other directors, to adopt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered as Company Application No. 237 of 1985. In this company application (which is on board today), Vaz Forwarding Co. Pvt. Ltd., have asked for an order that the Port of Vizagapatnam be directed to hand over possession of the five trawlers to the applicants, i.e. , Vaz Forwarding Co. Pvt. Ltd., and for an interim order restraining the Port Authorities from selling the property. Thereafter, M/s. Vaz Forwarding Co. Pvt. Ltd., purporting to act on the basis of the liberty granted under the order dated July 25, 1985, took out another company application dated December 2, 1985, which has come to be numbered as Company Application No. 282 of 1985, Today, at the hearing of this Company Application No. 282 of 1985, Mr. Viswanath, has tendered an affidavit in rejoinder. I have, however, not taken the same on file as it contains matters not germane to the disposal of these company applications and otherwise contains a wanton attack on the official liquidator. As stated earlier, I shall first deal with the subject-matter of Company Application No. 282 of 1985, and thereafter Company Application No. 237 of 1985. Mr. Viswanath, the learned advocate for the applicant in Company Application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bailees, whether it was not due to their negligence that two of the trawlers went under the sea, ( e ) whether the company was liable to pay the salvage costs of the two vessels claimed at Rs. 5 lakhs, ( f ) whether in fact the Post Trust incurred a sum of Rs. 5 lakhs as salvage charges, ( g ) whether by reason of the negligence of the Port Trust, the company had not come to suffer damages which according to the applicant herein were over Rs. 60 lakhs, ( h ) whether the company had a counterclaim in the said amount against the Port Trust. Mr. Vishwanath further submitted that not only this but the official liquidator in withdrawing Company Application No. 78 of 1985, prevented an inquiry as to whether the amounts claimed by the Port Trust were in fact due. Mr. Vishwanath submitted that all this must establish only one fact that the act of the official liquidator in withdrawing Company Application No. 78 of 1985 was not only wrongful, illegal and mala fide but in dereliction of his duties and against the interest of the company. Mr. Vishwanath next urged that the official liquidator had deferred taking possession of the trawlers at the behest and at the instance of the Bank of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the official liquidator was not prepared to take any action in this matter, but was ready to wait till the bank authorities consulted their solicitors and communicated that advice to the official liquidator on which the official liquidator would act. Mr. Vishwanath contended that what was of significance to note was the attorneys who were acting for the Port of Vizagapatnam were the same as the attorneys who were appearing for the Bank of India and Mr. Makhija who was appearing for the Port of Vizagapatnam was also acting at one time for the official liquidator. Mr. Vishwanath contended that in Company Application No. 78 of 1985, the official liquidator had sought a stay of the sale of the five trawlers, but when the application came up for hearing, the official liquidator hastened to withdraw the same and the only inference that can now be drawn is that the official liquidator was out to protect the interest of one of the creditors, but was certainly not acting in the interest of the company. That it is in these circumstances that this Company Application No. 282 of 1985 had been taken out questioning the propriety and legality of the official liquidator in withdrawing the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issues (stated by him) before they could get leave, must fall to the ground. The allegation that the official liquidator by withdrawing Company Application No. 78 of 1985 had made it possible for the Port Trust Authorities to deal with the property in the manner they like and that the official liquidator had acted wrongfully, illegally and/or with mala fide s or in dereliction of his duties cannot survive. In passing, it may here be observed that Mr. Vishwanath's contention that in view of the provisions of section 43, the Port Authorities held the ship as bailees is wholly misconceived as the said section 43 applies to goods and not to vessels. This takes me to the second limb of Mr. Vishwanath's argument, viz. , that the official liquidator was acting at the behest of Bank of India who claimed to be secured creditors and was protecting the bank's interest rather than working in the interest of the company in liquidation and that the said Company Application No. 78 of 1985 was also withdrawn to achieve the said object. That all this was manifest from the minutes of the meetings convened by the official Itquidator. Now turning to the minutes of the meeting held by the of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... February 21, 1985, received from M/s. Little and Co. as also a report from Winston Gregory Vaz, an ex-director of the company. A discussion appears to have taken place on the basis of these letters and the topic of the authorities of the Port of Vizagapatnam holding an auction of these trawlers on March 19, 1985, was also discussed. It appears that at this meeting, Mr. Vaz informed the official liquidator that a scheme of compromise was being proposed and in view of this the sale by the Port authorities ought to be stopped. However, as auction was fixed about four days away, i.e. , on March 19, 1985, what has come to be recorded is as follows: "As regards trawlers, Mr. Nanda says that the question of consent to sale of the said trawlers by the official liquidator will be considered by bank's solicitors, M/s Mulla Mulla, advocates and solicitors, who would be visiting this office on January 17, 1985. Shri Nanda also clarifies in case there is a viable scheme forthcoming from any sponsor the bank would consider favourably the same." (reproduced as recorded) I do not see how on the basis of these minutes, Mr. Vishwanath can possibly argue that the officical liquidator was adopt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and/or ex-directors. In this affidavit what is stated is that the valuers had evaluated the trawlers at Rs. 55,25,000 as on April 12, 1979, but the official liquidator was told that the trawlers were worth Rs. 80,00,000. Nothing has been stated as to from where the official liquidator got this information and the only inference that can be drawn from the facts and circumstances of the case is that this information incorporated in the said affidavit by Mr. Vishwanath was one told by the directors or ex-directors of the company and the official liquidator has been made to say this. The second grievance incorporated in the affidavit is that no notice before the arrest of the said vessels had been given by the official liquidator and hence the Port Authorities of Vizagapatnam could not proceed to sell the property. However, Mr. Vishwanath has now conceded that the five trawlers were auctioned by the Port authorities as far back as 1982, i.e. , much before the official liquidator came on the scene, hence no question of the Port authorities giving any notice before arrest to the official liquidator arises. The grievance in this affidavit is of no value. The third grievance made in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Port Trust was not vested with untrammelled powers and were not entitled to put up the trawlers in question for sale after three years, and the official liquidator ought to have pressed the Company Application No. 78 of 1985 and prayed for the reliefs mentioned therein. That the withdrawal of Company Application No. 78 of 1985 by the official liquidator was wrongful, illegal, and arbitrary. The contention is of no merit. Barring making assertions, Mr. Viswanath has not been able to point out anything which can support him in his contention that if the sale is not held in a reasonable time, the arrest would come to an end by efflux of time and/or that the power of sale conferred by statute on the Port Authorities would stand extinguished. He has not even been able to state as to how the powers of sale conferred by statute on the Port Trust can be said to be untrammelled. As stated earlier, the official liquidator has, in seeking a withdrawal of the said company application, taken legal advice and has acted conscientiously. What emanates from the discussion then is that the action of the official liquidator in withdrawing Company Application No. 78 of 1985 was as per indepen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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