Raghuvinder Singh Verma And 33 ORS. v. Lpg Maharshi Mahatreya (Imo No.9000481) And Varun Global Limited And ANR (Respondent)
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION ADMIRALTY & VICE ADMIRALTY JURISDICTION NOTICE OF MOTION NO.82 OF 2018 IN ADMIRALTY SUIT NO.2 OF 2018 Fleet Ship Management INC )....Plaintiff V/s.
LPG Maharshi Shubhatreya & Anr.
)....Defendants NOTICE OF MOTION NO.1897 OF 2017 IN ADMIRALTY SUIT NO.39 OF 2017 Fleet Ship Management INC )....Plaintiff V/s.
LPG Maharshi Krishnatreya & Anr.
)....Defendants NOTICE OF MOTION NO.77 OF 2018 IN ADMIRALTY SUIT NO.4 OF 2018 Fleet Ship Management INC )....Plaintiff V/s.
LPG Maharshi Bhavatreya & Anr.
)....Defendants NOTICE OF MOTION NO.78 OF 2018 IN ADMIRALTY SUIT NO.3 OF 2018 Fleet Ship Management INC )....Plaintiff V/s.
LPG Maharshi Bhardwaj & Anr.
)....Defendants NOTICE OF MOTION NO.80 OF 2018 IN ADMIRALTY SUIT NO.1 OF 2018
2/21 Fleet Ship Management INC )....Plaintiff V/s.
LPG Maharshi Devatreya & Anr.
)....Defendants NOTICE OF MOTION NO.247 OF 2018 IN COMMERCIAL ADMIRALTY SUIT NO.42 OF 2018 Capt.Nazeebuddin Salahuddin Kassmi & 25 Ors. )....Plaintiffs V/s.
LPG Maharshi Bhardwaj & Varun Global Ltd. & Anr. )....Defendants NOTICE OF MOTION NO.256 OF 2018 IN COMMERCIAL ADMIRALTY SUIT NO.9 OF 2018 Capt.Brijesh Kumar Shukla & 27 Ors.
)....Plaintiffs V/s.
LPG Maharshi Bhavatreya & Varun Global Ltd. & Anr. )....Defendants NOTICE OF MOTION NO.261 OF 2018 IN COMMERCIAL ADMIRALTY SUIT NO.41 OF 2018 Capt.Noel D'cruz & 23 Ors.
)....Plaintiffs V/s.
LPG Maharshi Shubhatreya & Varun Global Ltd. & Anr. )....Defendants NOTICE OF MOTION NO.263 OF 2018 IN COMMERCIAL ADMIRALTY SUIT NO.12 OF 2018 Capt.Babu Thaliath & 27 Ors.
)....Plaintiffs V/s.
LPG Maharshi Devatreya & Varun Global Ltd. & Anr. )....Defendants
3/21 NOTICE OF MOTION NO.389 OF 2018 IN COMMERCIAL ADMIRALTY SUIT NO.18 OF 2018 Fleet Ship Management INC )....Plaintiffs V/s.
LPG Maharshi Mahatreya & Anr.
)....Defendants NOTICE OF MOTION NO.405 OF 2018 IN COMMERCIAL ADMIRALTY SUIT NO.21 OF 2018 Raghuvinder Singh Verma & 33 Ors.
)....Plaintiffs V/s.
LPG Maharshi Mahatreya & Varun Global Ltd. & Anr. )....Defendants NOTICE OF MOTION NO.504 OF 2018 IN COMMERCIAL ADMIRALTY SUIT NO.29 OF 2018 Capt.Yogesh Muggwhally Kumaraswamy & 35 Ors. )....Plaintiffs V/s.
LPG Maharshi Krishnmatreya &Varun Global Ltd. & Anr.)..Defendants ---- Mr.Prashant Pratap, senior advocate a/w Ms.Damayanti Sen i/by Bose and Mitra & Co. for plaintiff in ADMS 39/2017, ADMS 1/2018, ADMS 2/2018, ADMS 3/2018, ADMS 4/2018 and ADMAS 21/2018/ Notices of Motion Nos.80/2018, 82/2018, 78/2018, 77/2018, 1897/2017 & 389/2018..
Mrs.Damayanti Sen, Mr.Sanjeev Sambasivan I/by Bose & Mitra & Co. for plaintiffs in Notices of Motion Nos.504/2018, 263/2018, 405/2018, 256/2018 & 247/2018.
Mr.Sanjeev Sambasivan I/by Bose & Mitra and Co. for plaintiffs in COMAS 9/2018, COMAS 12/2018, COMAS 21/2018, COMAS 29/2018, COMAS 106/2018 and COMAS 124/2018.
4/21 Ms.Prapti Kedia a/w Ms.Bindu Bhatia i/by Khare Legal Chambers for Darya Shipping Pvt. Ltd. (Plaintiff in COMAS 33/2018). Mr.Ashwin Shanker a/w Mr.Bimal Rajasekhar and Ms.Shweta Sadanandan for mortgagee banks.
---- CORAM : K.R.SHRIRAM,J DATE : 18.7.2018 P.C.:- NOTICE OF MOTION NO.82 OF 2018 IN ADMIRALTY SUIT NO.2 OF 2018 NOTICE OF MOTION NO.1897 OF 2017 IN ADMIRALTY SUIT NO.39 OF 2017 NOTICE OF MOTION NO.77 OF 2018 IN ADMIRALTY SUIT NO.4 OF 2018 NOTICE OF MOTION NO.78 OF 2018 IN ADMIRALTY SUIT NO.3 OF 2018 NOTICE OF MOTION NO.80 OF 2018 IN ADMIRALTY SUIT NO.1 OF 2018 NOTICE OF MOTION NO.389 OF 2018 IN COMMERCIAL SUIT NO.18 OF 2018 1.
The applicants had filed the suits against six vessels for its claim for outstanding dues under a Crew Management Agreement. On 8.9.2017, order of arrest of all the six vessels was passed by this court. Subsequently, on an application taken out by plaintiffs, these Notices of Motion listed today, by consent of all the parties including Mr.Shankar's client, all the six vessels were agreed to be sold and were sold for total consideration of Rs.183 crores. As recorded in the order dated 12.10.2017 read with orders dated 31.10.2017, 20.11.2017 and 30.11.2017, plaintiff/applicant was directed to continue with the crewing and crew management for all the six vessels and as recorded in these orders, plaintiff/applicant was to be paid its entire claim from 1.7.2017 upto the date on which the crews were signed off by the plaintiff/applicant. The crews were signed off on different dates in
5/21 December-2017. The orders mentioned above also record that whatever expenses have been incurred by the applicant for maintenance of vessels including wages paid to Seafarers and expenses incurred for maintenance of communication facilities shall be treated as Sheriff's expenses, whatever the process of distribution applied whether in the insolvency jurisdiction or in the admiralty jurisdiction.
It is the case of plaintiff that plaintiff has paid from 1.7.2017 upto 30.11.2017 crew wages and statutory contributions amounting to US$ 2,167,665.50, incurred cost towards maintenance from 1.7.2017 to 30.11.2017 of US$ 761,417.71 and additional cost and expenses incurred towards maintenance from 1.7.2017 till hand over of the vessel amounting to US$ 133,857.00/-. In the order dated 14.12.2017 it is also recorded that the applicant will be reimbursed with interest @ 3.5% p.a. including wages from 7.12.2017 to 16.12.2017 which were not covered by the previous orders and all payments to be made to the plaintiffs/applicants from 7.12.2017 to 16.12.2017 will be given same priority as per the previous orders. Mr.Pratap has tendered summary of cost incurred by plaintiff which includes principal and interest
6/21 calculated and the same is taken on record and marked `X' for identification. For ease of reference, the same is scanned and reproduced below :-
7/21 As per these statements the total amount payable to plaintiff/applicant as per the orders noted above is US$ 3,137,558.73/-.
In the order dated 14.12.2017, on which date Resolution Professional was also represented, a statement was made by the counsel for Resolution Professional that they will verify all the documents submitted by plaintiff/applicant and revert to their respective advocates within 30 days should the Resolution Professional need any further clarification. In the order it was also clarified that verification will be restricted only to the quantum and evidence of payment made and nothing more. This clarification was made by this court because the understanding that the applicant should be paid this amount as Sheriff's expenses immediately after sale proceeds were received could not be questioned.
It should be noted that by that date the plaintiff/applicant had, pursuant to previous orders submitted all supporting documents in respect of expenses incurred, to the Resolution Professional and further documents after the date of the order were to be submitted within one week. On 2.1.2018 further documents have been
8/21 submitted and additional affidavit dated 4.1.2018 setting out further expenses incurred towards vessel along with supporting documents as per the order dated 14.12.2017 was affirmed and submitted by the advocate to the Resolution Professional for verification. Thereafter it is stated by Mr.Pratap that Resolution Professional has not sought any clarification in respect of these expenses and also in respect of expenses as sought in the affidavit dated 30.11.2017 which was submitted on 7.12.2017.
Mr.Shankar stated that defendant no.4 entered appearance only in March-2018. The fact is, even if that makes any difference, more than 4 months have passed since then. Mr.Pratap states that documents were submitted to Mr.Shankar on 13.4.2018 more than 3 months ago.
In any event, this is a case where Resolution Professional has been appointed by National Company Law Tribunal (NCLT) and all documents have been submitted. Nobody has questioned the quantum or evidence of payment. Only 30 days were given in the order dated 14.12.2017 and 7 months have passed since then. Today, Mr.Shankar tenders an affidavit of one Tushar
9/21 Meshram affirmed on 11.7.2018 opposing payment of monies to the applicant/plaintiff out of the sale proceeds as Sheriff's expenses. First of all it has to be noted that there is no authority on record given to Tushar Meshram to affirm this affidavit. Mr.Shankar relies upon Gazette notification annexed to the affidavit dated 31.8.2005. In the Gazette Notification the name of Tushar Meshram is not mentioned. Secondly, in the affidavit the designation of Tushar Meshram also is not disclosed. Thirdly, the Gazette Notification does not authorize him to file any affidavit or pleading in any legal proceedings. The power is restricted only "to sign all the documents, instruments, accounts, receipts, letters and advices etc.
indicated with the authorized business of the bank in respect of all matters coming in discharging the function including the mentioned units". Therefore, at the outset, I am not inclined to consider this affidavit. Even if I decide to be charitable and consider this affidavit, it has to be noted that the affidavit smacks of utter dishonesty of defendant no.4, which is a public sector bank. I wonder whether the affiant Tushar Meshram had authority to file such an affidavit.
10/21 objects to grant of the pay-outs from the sale proceeds of the defendant-vessel. It is not mentioned who has advised so. Secondly according to the defendant no.4 the expenses have been incurred at the plaintiff's whim without any prior intimation or approval of this Court, Resolution Professional or the Committee of creditors in relation to the quantum.
Perhaps the affiant Tushar Meshram has not read the orders passed by this court. The orders expressly provide that plaintiff will be entitled to incur all the expenses and submit the documents which the plaintiff has submitted even before 14.12.2017 to Resolution Professional. Mr.Shankar states that defendant no.4 is a lead bank and therefore, I would also assume that as lead bank they were heading the committee of creditors. Admittedly, all documents have been submitted to the Resolution Professional and in any event on 13.4.2018 has also been given to Shri Shankar, the advocate for defendant no.4. The committee of creditors/defendant no.4/Resolution Professional had enough time to go through the documents and raise objection or seek clarification from plaintiff. The fact that they have not even addressed communication to the advocate for plaintiff shows that defendant no.4, the committee of creditors and the Resolution Professional have approved and accepted the fact that
11/21 plaintiff has incurred the amount as claimed and plaintiff has submitted sufficient documents in support thereof. Therefore, defendant no.4 cannot make this allegation against plaintiff that plaintiff incurred expenses at its whim without any intimation. In any event, none of the orders required them to take approval. Orders permitted plaintiff to expend because defendant no.4 and Resolution Professional wanted plaintiff to continue to maintain the vessels and agreed that the amount incurred by plaintiff will be paid as Sheriff's expenses first subject to verification of accounts. Defendant no.4, Resolution Professional and committee of creditors had enough time to verify the accounts.
It is also stated that the majority of committee of creditors have passed Resolution on 27.9.2017 that plaintiff's expenses for the period from 1.7.2017 till date of approval of the Resolution plan will be accorded priority subject to verification in accordance with the provisions of IBC and quantum of holding cost estimate/actual amount being approved by the mortgagee banks needs to be verified. Defendant no.4 and committee of creditors and the bank had more than 7 months to verify, which they have not done and today they cannot come in the way of amount being released to plaintiff. It will be useful to reproduce paragraph-7 of the order dated 14.12.2017
12/21 which reads as under :- "7. Mr.Rambhadran states that the Resolution Professional will verify the documents submitted by on or behalf of the crew members or FSMI and revert to their respective Advocates as soon as possible and in any event within 30 days of receiving the further documents from the Advocates for the crew members and Advocates for FSMI, should the Resolution Profession need any further clarification. In view of what is recorded above and the clarification given by Mr.Ramabhadran and having heard the opposing counsel, just by way of further clarification it should be noted that the verification in accordance with IBC and approval of Committee of Creditors will be restricted only to verification of the quantum and evidence of disbursements and nothing more.
Paragraph nos.2 & 3 of the order dated 31.10.2017 reads as under :- "2. Mr.Pratap, learned senior counsel for the plaintiff in Commercial Suit (Lodging) No.499 of 2017, on instructions, states that his client will pay the wages for the months of July, August and November,2017 and also other expenses set out in paragraph 4 of the order dated 12th October, 2017. He submits that insofar as the wages and salary and other expenses for the months of July and August, 2017 are concerned, the same shall be paid within three weeks from today. Insofar as the salaries, wages and expenses for the month of November,2017 is concerned, the same will be paid on or before 30th November, 2017. It is submitted by the learned senior counsel that the payments already made and agreed to be paid by his clients shall also be subject to the same priority as directed by this Court vide order dated 12th October, 2017 and agreed by the defendant no.1.
3. Mr.Pratap, learned senior counsel for the plaintiff in
13/21 Commercial Suit (Lodging) No.499 of 2017 further states that his clients would also renew the insurance policy, if any, in respect of the vessels which are subject matter of these suits and will pay requisite insurance premium at the earliest provided the said payment also is given similar priority as recorded in the order dated 12th October, 2017. The aforesaid statements are accepted. It is made clear that if any such insurance premium is paid by the plaintiff in Commercial Suit (Lodging) No.499 of 2017 in respect of the vessels, which are subject matter of these suits, the said premium also shall be subject to the top priority as provided in paragraph 4 of the order dated 12th October, 2017." Therefore, in my view, the stand of defendant no.4 has to be rejected. In the circumstances, the Prothonotary & Senior Master, High Court, Bombay, is directed to pay to plaintiff/applicant sum of US$ 3,137,558.73 as per the summary of cost reproduced above and this amount be remitted to the following account forthwith. Fleet Ship Management Inc.
Bank Account Details Beneficiary name Fleet Ship Management Inc.
Beneficiary Bank Standard Chartered Bank Bank Address Standard Chartered Tower, 15th Floor, 388 Kwun Tong, Kowloon, Hong Kong Bank Account Number 44708075706 USD Bank Swift Code SCBLHKHH Intermediate Swift Code SCBLUS33
14/21 Notices of Motion No.82 of 2018, 1897 of 2017, 77 of 2018, 78 of 2018, 80 of 2018 and 389 of 2018 stand disposed. ------ NOTICE OF MOTION NO.247 OF 2018 IN COMMERCIAL ADMIRALTY SUIT NO.42 OF 2018 NOTICE OF MOTION NO.256 OF 2018 IN COMMERCIAL ADMIRALTY SUIT NO.9 OF 2018 NOTICE OF MOTION NO.261 OF 2018 IN COMMERCIAL ADMIRALTY SUIT NO.41 OF 2018 NOTICE OF MOTION NO.263 OF 2018 IN COMERCIAL ADMIRALTY SUIT NO.12 OF 2018 NOTICE OF MOTION NO.405 OF 2018 IN COMMERCIAL ADMIRALTY SUIT NO.21 OF 2018 NOTICE OF MOTION NO.504 OF 2018 IN COMMERCIAL ADMIRALTY SUIT NO.29 OF 2018 These are Notices of Motion taken by the crew members who were on board of the six vessels for outstanding wages. Fleet Ship Management Inc (Fleet) has paid them till 30.11.2017 and now plaintiffs are claiming wages from 1.12.2017 till date of signing off plus interest @ 3.5% p.a. till 18.7.2018. As per the order dated 30.11.2017, read with 14.12.2017, plaintiffs in these suits were to be paid up to the date of signing off.
Mr.Pratap states that as the crews have received their outstanding wages upto 30.11.2017 from plaintiff in the Notices of Motion disposed earlier (Fleet), plaintiffs in these 6 suits are claiming
15/21 only from 1.12.2017 until date of signing off. Mr.Pratap states that the documents in support of the plaintiffs' claim have also been submitted to Resolution Professional in December 2017/January 2017 and to the advocate for defendant no.4 on 13.4.2018. In the order of 14.12.2017, 30 days time was given to the Resolution Professional to revert if he needed any clarification on the quantum. Nobody has raised any objection till date. Therefore, these amounts from 1.12.2017 until date of signing off together with interest @ 3.5% p.a., for the same reasons as recorded in the Notices of Motion disposed today in the suit filed by Fleet, have also to be paid to the respective crew members. Mr.Pratap has tendered summary of outstanding wages together with portage bill for each of the six vessels (7 pages). The same is taken on record and marked X-1 (colly) for identification. For ease of reference all the pages are scanned and reproduced below :-
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20/21 Prothonotary & Senior Master to pay these amounts directly to the respective crew members as per the portage bill reproduced above. Mr.Pratap states that bank details of each of the crew members will be provided to the Prothonotary & Senior Master within one week from today.
In view of the above, all these Notices of Motion also stand disposed.
General Mr.Shankar states that some of the defendants have lodged Notices of Motion (L) No.1650 of 2018 in Admiralty Suit No.2 of 2017, Notice of Motion (L) No.1649 of 2018 in Admiralty Suit No.2 of 2017, Notice of Motion (L) No.1657 of 2018 in Admiralty Suit No.2 of 2017, Notice of Motion (L) No.1647 of 2018 in Admiralty Suit No.2 of 2017, Notice of Motion (L) No.1678 of 2018 in Admiralty Suit No.2 of 2017 and Notice of Motion (L) No.1686 of 2018 in Admiralty Suit No.2 of 2017. Mr.Shankar states that these Notices of Motion have been taken out in the 6 suits which were filed by Fleet Ship Management INC. Mr.Shankar seeks leave to amend Notices of Motion to add Darya Shipping Pvt. Ltd., as respondent to those
21/21 Notices of Motion. Leave to amend granted. If the applicants wish to file further affidavit in support thereof, leave granted. Amendment to be carried out and further affidavit if any, to be filed within one week from today.
The affidavits in reply to be filed within two weeks of receiving Notices of Motion. Rejoinder, if any, to be filed within 2 weeks thereafter. Notices of Motion be listed on 29.8.2018 subject to being numbered.
All to act on authenticated copy of this order. (K.R.SHRIRAM,J)