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Kasturi Commodities Pvt. Ltd, Bhavnagar v/s K. Shajahan, Chennai & Others

    M.P.No.1 of 2013 & Original Side Appeal No. SR72477 of 2013
    Decided On, 16 August 2013
    At, High Court of Judicature at Madras
    By, THE HONOURABLE MR. JUSTICE M. JAICHANDREN & THE HONOURABLE MR. JUSTICE M.M. SUNDRESH
    For the Petitioner: V. Prakash, Senior Advocate for M/s. Shubharanjani Ananth, Advcoate For the Respondents: R3 to R22, S. Vasudevan for Crew P. Giridharan, R. Yashod Vardhan, Senior Advocate, Auction Purchaserfor V. Manisekaran, T.S. Baskaran, Advocates.


Judgment Text
(Prayer: M.P.No.1 of 2013 in O.S.A.No.SR.72477 of 2013 is filed under Order XIV Rule 8 of Original Side Rules read with Section 151 C.P.C., to grant the petitioner the leave to appeal against the Order dated 01.08.2013 in Application No.2170 of 2013 in C.S.No.222 of 2013.)

M.M. Sundresh, J.

1. The learned Senior counsel appearing for the petitioner/appellant craves leave of this Court to argue on all the main appeals, even though only one appeal with an application to grant leave is before us. He submitted that even though appeals have been filed against other orders they could not be numbered and brought before the Court.

2. As the learned Senior counsel moved the appeal quoting urgency and in view of the fact that submissions have been made on all the appeals coupled with the further fact that no serious objections have been raised by the learned counsel appearing for the respondents showing fairness, we, accordingly, pass orders on the main appeals.3. Facts in brief:

3.1. The suit was filed in C.S.No.222 of 2003 under Order XLII Rules 2 and 3 of the Madras High Court Original Side Rules for recovery of a sum of Rs.54,65,190.50. A relief of arrest and sale of the defendant Vessel M.T. Chemical Arrow with a consequential prayer to adjust the sale proceeds was also sought for. Pending suit, an application was filed for the sale of the vessel in Application No.2170 of 2013. By an order dated 09.05.2013, the learned single Judge ordered the sale of the Vessel through the Advocate Commissioner appointed. The sale was ordered to be effected by following the procedure contemplated under Order XLII Rules 2 and 3 of the Madras High Court Original Side Rules. The learned Advocate Commissioner made due publication in a popular English Newspaper 'Time of India'. The owner of the ship abandoned it. Claims have been made by the crew members and one other person. An order of arrest was obtained before the High Court of Mumbai. It is a crew members, who filed the application in Application No.2170 of 2013 for sale. They belonged to various nationalities. Their wages have not been paid by the owner of the ship so far.

3.2. It came to the notice of the learned single Judge that there were only two bidders. The bid amount was lesser than the valuation fixed. Therefore, the learned single Judge, by an order dated 10.07.2013, passed the following order:

"6. The Advocate Commissioner is directed to intimate all the parties who have evinced interest in purchasing the Vessel, as set out above, immediately as under:

(i) that the auction will be held in the Court on 19.7.2013 at 3.00 p.m.;

(ii) that the upset price will be indicated at the time of auction;

(iii) that any higher offer by the intending bidder shall be in the multiples of Rs.5 lakhs;

(iv) that whoever intends to participate in the auction, as a condition precedent should deposit a sum of Rs.20,00,000/- (Rupees Twenty Lakhs Only) towards earnest money deposit by way o demand draft drawn in favour of the Advocate Commissioner on or before 1.30 p.m., on 19.7.2013.

7. The Advocate Commissioner is directed to host the direction of this Court for public auction of the Vessel- M.T. Chemical Arrow in the Official websites of the Chennai Port Trust and Kakinada Port Trust.

8. The Master of the Vessel is directed to place his request for essential ship stores for maintenance of the ship crew, including diesel oil, with the Advocate Commissioner and the Advocate Commissioner shall place appropriate order with the Ship Chandier -M/s. Sea traffic, if they are willing to supply, and the paid claim will be taken on priority basis at the appropriate time."

Thereafter a publication was made in the website as directed by the learned single Judge. On the date fixed for auction, there was no bidders. One of the two participants in the earlier auction conducted, having represented by the learned counsel for the appellant herein, withdrew the bid. Thereafter, the appellant filed applications in Application Nos.3050 to 3052 of 2013. The learned single Judge dismissed the applications filed. The said applications have been filed seeking permission to intervene, to recall the order dated 13.03.2013, and to stay the said order. After dismissing the applications, the learned single Judge, in and by the order dated 01.08.2013, confirmed the sale in favour of the contesting respondents herein. By a subsequent order dated 07.08.2013, the learned single Judge has directed the issuance of warrant of release of the Vessel-M.T.Chemical Arrow. In pursuant to the orders of the learned single judge, the newspaper to which certain amount of money has been paid for the publication regarding sale of the Vessel. The Commissioner’s fees was paid. Further more, the Mumbai High Court has also passed an order of Notice of Motion (L) on 14.08.2013 in Notice of Motion (L) No.1612 of 2013 in Admiralty Suit No.47 of 2013, thereby released the Vessel from arrest with liberty to the parties to work out their remedy before this Court. The contesting respondents duly deposited the amount.

4.Submissions of the Appellant:

The learned Senior Counsel appearing for the appellant has submitted that the appellant is ready and willing to pay the higher amount as admitted by the learned single Judge. Even assuming that the appellant was aware of the earlier auction proceedings and the subsequent one proposed to be conducted before the learned single Judge, there must have been a fresh auction. As the appellant was ready to pay a higher amount and the Court isalso concerned with the higher amount, the dismissal of the application and the consequential confirmation of sale will have to be set aside. The balance of convenience lies with the appellant as it is ready to pay the higher amount and the ship is yet to take off from the Visakapattinam. Hence, he submitted that the appeals will have to be allowed.

5.Submissions of the Respondent:

Per contra, the learned Senior counsel appearing for the contesting respondent and other counsels to whom notices have been served have submitted that the appeals are devoid of merits. It has to be seen that about Rs.7,00,000/- has already been paid for advertisement in the newspaper. The condition of the ship is deteriorating day to-day. The scope of Order XLII Rules 2 and 3 of the Original Side Rules will have to be seen in the light of the Order XXI Rule 78 of the Code of Civil Procedure. What is required to set aside the sale is a material irregularity. The appellant was aware of the earlier proceedings. Such a person cannot be allowed to interfere thereafter. A sum of Rs.35,00,000/- will have to be paid to the third party, who has made supplies for the maintenance of the ship during interregnum. Every day’s delay would involve more expenses towards maintenance. A new set of crew has taken charge. The old crew members are at Chennai in pursuant to the subsequent order passed by the learned single Judge. They belonged to different nationalities. The sale effected was in the interest of all the parties. The High Court of Mumbai passed an order in view of the order passed by the learned single Judge. The appellant is not a person interested. Therefore, the appeal will have to be dismissed as devoid of merits.

6. DISCUSSION:

6.1. We have perused the order of the learned single Judge. The learned single Judge has taken much pains to consider all the issues both law and fact and passed a detailed order. On facts, the learned single Judge rightly found that the appellant has prior notice of the proceedings. The learned single Judge has also found that the condition of the ship warrants immediate action. The payment due was also taken into account. The affidavit filed by the learned Advocate Commissioner was also taken into consideration by the learned single Judge. The submission made by the learned Senior Counsel that notwithstanding the fact that the appellant was aware of the earlier proceedings, a fresh auction ought to have been held as on 19.07.2013, no such auction was held, cannot be countenanced. Admittedly after making the publication in the website, the date for second auction was fixed. There was no one, except the contesting respondent herein, who would like to offer any amount. Therefore, the learned single Judge, having no other option, accepted to confirm the offer in his favour. Merely because the learned single Judge opted for auction in the Court, the same cannot construed to hold that the earlier auction was cancelled as a natural consequence. Further more, the appellant having slept ov

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er the matter, cannot come to the Court by taking its own time after the auction was over. The learned single Judge has rightly took into consideration of the prevailing situation pertaining to the ship, its maintenance and the expenses incurred already and to be incurred. The crew members of the ship have already reached Chennai. The Mumbai High Court has also passed appropriate orders. Therefore, the circumstances of the case clearly do not warrant any more postponement of the auction. In this case, the owner has abandoned the ship. We also do not find any material irregularity much less any irregularity in the procedure adopted by the learned single Judge. Therefore, looking from any angle, both from the point of view of fact and law, we do not find any reason to interfere with the well reasoned order passed by the learned single Judge. Accordingly, themiscellaneous petition and the Original Side Appeals are dismissed. However, there are no orders as to costs.
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