Expenses incurred by Secured Creditor for securing a vessel after invocation of Admiralty Jurisdiction cannot be treated as liquidation process expenses – Hero Fincorp Ltd. Vs. Liquidator of TAG Offshore Ltd. – NCLAT New Delhi
NCLAT observed that the Appellant had invoked Admiralty Jurisdiction under the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 whereupon an order for arrest of the vessel was given by the Hon’ble Bombay High Court on 18.3.2019 and its auction/sale was ordered on 23.4.2019. The CIRP of the Corporate Debtor/Tag Offshore Limited was initiated vide order dated 24.4.2019 of the Adjudicating Authority, which was more than one month after the Appellant had invoked the Admiralty Jurisdiction. Therefore, the action relating to securing the two vessels was taken much after the Appellant had obtained order from the Bombay High Court under its Admiralty Jurisdiction on 18.3.2019 and 23.4.2019 and therefore the vessel Tag 22 had become the asset of the Appellant.
Further NCLAT ordered that the Appellant shall pay a cost of Rs. One Lakh as litigation expenses to the liquidator, which shall go into the liquidation estate. Both, the proportional share of the Appellant in securing the two vessels Tag 22 and Tag 6 and the litigation cost shall be paid by the Appellant within 15 days of this judgment.