Case Note & Summary
The proceedings arose from multiple admiralty suits filed before the High Court of Judicature at Bombay, wherein orders of arrest of defendant vessels were obtained. Two major legal issues emerged during the pendency of these suits. First, the Official Liquidator of GOL Offshore Ltd., the owner of defendant vessels in some suits, objected to the continuation of the suits without leave of the company court under Section 446 of the Companies Act, 1956, after the company was ordered to be wound up on 04 December 2017. The plaintiffs relied on the decision in Shanmugam Rajashekhar v. Owners and parties interested in the vessel m.t. Pratibha Cauvery to contend that no such leave was required. Second, following the admission of a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 against Punj Lloyd Ltd., the owner of defendant vessels in other suits, a moratorium under Section 14 of the IBC was declared by the National Company Law Tribunal on 08 March 2019. The plaintiffs argued that the moratorium does not affect admiralty proceedings prosecuted in rem. The court, noting that these questions of law would arise repeatedly, directed all affected suits to be listed together and appointed Dr. Abhinav D. Chandrachud as Amicus Curiae, also accepting the assistance of Senior Advocates Mr. Prashant S. Pratap and Mr. V. K. Ramabhadran. The judgment records the procedural history and frames the issues for determination, but no final decision has been rendered.
Headnote
A) Admiralty Law - Winding Up - Leave under Section 446 of Companies Act, 1956 - Whether admiralty suits can proceed without leave of the company court under Section 446 of the Companies Act, 1956 when the vessel owner company is in liquidation - Court noted the Official Liquidator's objection and directed listing of all affected suits together to determine this legal question (Paras 1-2). B) Insolvency Law - Moratorium under Section 14 of Insolvency and Bankruptcy Code, 2016 - Effect on Admiralty Actions - Whether moratorium declared under Section 14 of the Insolvency and Bankruptcy Code, 2016 stays admiralty proceedings in rem - Court noted that plaintiffs contended the moratorium has no bearing on admiralty proceedings and directed listing of affected suits to decide the issue (Paras 3-4). C) Procedural Law - Appointment of Amicus Curiae - In view of important questions of law, court appointed Dr. Abhinav Chandrachud as Amicus Curiae and received assistance from senior advocates Mr. Prashant Pratap and Mr. V. K. Ramabhadran (Para 4).
Issue of Consideration
Whether leave under Section 446 of the Companies Act, 1956 is required to proceed with admiralty suits against a company in liquidation; Whether the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 affects admiralty proceedings.
Final Decision
Court directed listing of all affected suits together for hearing on the legal questions and appointed amicus curiae to assist.
Law Points
- Determination of leave requirement under Section 446
- Companies Act
- 1956 for admiralty suits
- effect of moratorium under Section 14
- Insolvency and Bankruptcy Code
- 2016 on admiralty actions in rem
