ASN 1 Appeal-601.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CHAMBER SUMMONS NO. OF 2011 IN APPEAL LODGING NO.601 OF 2011 Sparebanken Sogn og Fjordane. ...Appellant. (Org. Plaintiff) Vs. m. v. BOS ANGLER & anr. ..Respondents. Mr. Atul Rajyadhyaksha, Sr.Advocate with Mr. Z. Bharucha and Bimal Rajshekhar for the Appellant. Mr. A.M.Vernekar i/by M/s. Narichania and Narichania for plaintiffs in ADMSL. Suit No.1759/2011, 1430/2011 and 1815/2011. Mr. Rahul Narichania along with Shiv Kumar Iyer, Sujan Malhotra and Prathmesh Popat i/by Bose and Mitra for the plaintiffs in ADMS No. 32/2011. Mr. V.K. Ramabhadran for Intervener. CORAM : MOHIT S. SHAH, C. J. AND SMT. ROSHAN DALVI, J. 16 September 2011 PC: This appeal is directed against the order dated 13 September 2011 of the learned Trial Judge of this Court rejecting the appellant/plaintiff’s Chamber Summons No.1421 of 2011 in the Admiralty Suit No.24 of 2011 filed by the appellant-plaintiff. ASN 2 Appeal-601.sxw 2 By an order dated 3 August 2011, the learned Trial Judge after fixing the reserved bid for sale of defendant No.1 (m.v. Bos Angler) at Rs.250 Crores and EMD at 10% of the reserved bid given directions for inviting bids in wide circulation in international and other newspapers as mentioned in the said order. The learned Judge directed that bidders are required to submit their bids in a sealed cover and their bids will be opened in open Court and the Office of Sheriff shall seek confirmation of the sale of defendant No.1 from the Court within five weeks from the date of publication of the advertisements. 3 Thereafter, the appellant-plaintiff moved the chamber summons with the following prayers:- “(a) The leave be granted to plaintiff (as the mortgage of Defendant No.1 Vessel) and/or its nominee by this Hon’ble Court to bid for Defendant No.1 vessel, with the amount of such bid to be not less than NOK 181,783,590 (Norwegian Kroner One Hundred and Eighty One Million Seven Hundred and Eighty Three Thousand Five Hundred and Ninety only) equivalent to USD 33,051,562 (United States Dollars Thirty Three Million Fifty One Thousand Five Hundred and Sixty Two only), being the amount that is, as of date, the plaintiff’s claim in the suit; (b) That the Sheriff of Mumbai be directed to accept any bid made by the plaintiff mortgagee bank or its designated nominee and place the same before the Hon’ble Court in a sealed cover as per order dated 3rd August 2011 along with the other bids.” ASN 3 Appeal-601.sxw 4 The chamber summons came to be opposed by rival claimants who have a claim on the defendant No.1- Vessel contend that this Court has already determined the reserved price of Rs.250 Crores and if the plaintiff is permitted to submit its bid at the lower amount, auction will not be fair and free and grant of leave will be a instrument so as to influence the other bidders. The rival claimants also opposed the chamber summons on the ground that the appellant-plaintiff is yet to obtain a decree. 5 After hearing the learned counsel for the parties, learned Single Judge dismissed the chamber summons. 6 The learned counsel for the appellant-plaintiff submits that Rule 543 and 544 of the Bombay High Court (Original Side) Rules contemplates that the parties to the suit may be permitted to purchase any property directed to be sold by the Court or the Commissioner under a decree or order in the suit and that there is no reason why the appellant plaintiff should be precluded from participating in the auction proceeding. The said rules read as under:- “R.543- Leave to bid and to set-off-No party to a suit shall, without the leave of the Court or the Judge in Chambers, bid for or purchase any property directed to be sold by the Commissioner under a decree or order in the suit. Such leave if not contained in the decree or order directing the sale may be obtained on an application by Chamber Summons. The costs of a separate application, unless otherwise ordered, shall be borne and paid by the applicant. ASN 4 Appeal-601.sxw At the time of granting leave to any party to bid for and purchase the property the Court shall grant him leave to set off his claim in the suit against the purchase-money. R.544. Leave to mortgagee to bid and set off-(i) Where leave to bid and to set off is granted to a mortgagee of the property, the Court may order that he shall not bid at the sale for an amount less than what he is entitled to set off; and where the property is to be sold in separate lots, the bid shall not be less in respect of each lot than such figure shall appear to the property attributable to it in relation to the said amount. (ii) Where leave is granted to such mortgagee to set off his claim against the purchase money, he shall be entitled to set off the amount payable under the decree for principal, interest and costs of the suit and such costs, charges and expenses in respect of the mortgage security as have been properly incurred by him subsequent to the preliminary decree. The costs of the suit and the costs, charges and expenses incurred subsequent to the preliminary decree, if not taxed, shall be estimated and ascertained in a summary manner by the Commissioner for the purpose of giving effect to the set-off.” 7 Our attention is also invited to Order 21 Rule 72A of the Code of Civil Procedure which reads as under:- “72- A Mortgagee not to bid at sale without the leave of the Court-)1) Notwithstanding anything contained in rule 72, a mortgagee of immovable property shall not bid for or purchase property sold in execution of a decree on the mortgage unless the Court grants him leave to bid for or purchase the property. ASN 5 Appeal-601.sxw (2) If leave to bid is granted to such mortgagee, then the Court shall fix a reserve price as regards the mortgagee, and unless the court otherwise directs, the reserve price shall be- (a) not less than the amount then due for principal, interest and costs in respect of the mortgagee if the property is sold in one lot; and (b) in the case of any property sold in lots, not less than such sum as shall appear to the court to be properly attributable to each lot in relation to the amount then due for principal,. Interest and costs on the mortgage. (3) In other respects, the provisions of sub rules (2) and (3) of rule 72 shall apply in relation to purchase by the decree holder under that rule.” 8 Before dealing with the rival submissions of the claimants, we may note that the claim of the rival claimants are at the following amounts:- (i) Global Fuels and Lubricants Inc-Claim of USD 356,154.99 )in Admiralty Suit (L) No.1430 of 2011). (ii) World Fuel Services Inc.-Claim of USD 560,779.38 (in Admiralty Suit (L) No.1759 of 2011). ASN 6 Appeal-601.sxw (iii) Dan Bunkering AS-Claim of U SD 563,500 (in CS No.390 of 2011-Madras High Court). (iv) Marine Plus-Claim of USD 1,485,551.08 ( in Admiralty Suit No.32 of 2011 (v) Asean Enterprises- Claim of USD 1,89,900.15 (in Admiralty Suit (L) No.1815 of 2011. (vi) Sperce & Co. USD 149,484.07 + interest of 18% per annum from 6. 6. 2011 till payment. 9 The amount claimed by the rival claimants comes to USD 3,305,369.60. It therefore, appears to us that the appellant- plaintiff is first required to deposit the aforesaid amount of US Dollars before the Trial Court and thereafter if the appellant plaintiff is permitted to offer its bid for purchase of defendant No.1 Vessel, no prejudice will be caused to the interveners. At the same time, we are not inclined to grant prayer clause (a) in the chamber summons. In so far as the appellant plaintiff has sought leave to submit the bid of not less than USD 33,051.562 being the amount which is the appellant-plaintiff claimed in the suit. Since the learned Trial Judge by an order dated 3 August 2011 fixed the reserved price at Rs.250 Crores, we are not inclined to grant prayer clause (a). Hence, prayer clause (a) is rejected. 10 As far as prayer clause (b) is concerned, we are inclined to ASN 7 Appeal-601.sxw grant the same prayer subject to condition that the appellant plaintiff shall deposit the aforesaid amount with the The Registrar/Prothonotary and Senior Master of this Court on or before 23 September 2011. The bid which may be offered by the appellant plaintiff in sealed cover which will be received by the Sheriff of Bombay and same shall be placed before the Trial Court as per the order dated 3 August 2011 along with the other bids. However, the Trial Court shall consider the appellant- plaintiff’s bid after the amount of US 3,305,369.60 Dollars is deposited for which the time is granted upto 23 September 2011. 11 It is clarified that the aforesaid conditions requiring the appellant-plaintiff to deposit US dollars is only a condition for appellant plaintiff making a bid pursuant to the order dated 3 August 2011 of the Trial Court and in case the appellant plaintiff chooses not to submit any bid obviously there is no question of depositing any amount. It is further clarified that, in case, the appellant plaintiff offers bid as permitted by this order and if the bid is ultimately not accepted by the Trial Court, then the appellant plaintiff will be at liberty to withdraw the amount of 3,305,369.60 US Dollars. However, in case the Trial Court accepts the appellant-plaintiff’s bid , the aforesaid amount of US Dollars shall not be permitted to be withdrawn and shall be made available for determination after the aforesaid rival claimants establish their claim. ASN 8 Appeal-601.sxw 12 In view of the above directions, chamber summons is disposed of. CHIEF JUSTICE SMT. ROSHAN DALVI, J.