Vol- 8 issue-08

16 th - 30 th April 2018 TMWS 15
Nautical News
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Court Clears Sale Of Six Ships Of
Varun Shipping
In a probably first-of-its-kind order, the Bombay High Court
has cleared sale of six ships originally owned by Varun Resources
Ltd – once the biggest liquefied petroleum gas ship
owners – as its creditors were not paying the cost for the
ships’ management.
Justice KR Shriram, in an order passed on Tuesday, allowed
sale of LPG Maharshi Devatreya, Maharshi Krishna Treya,
Maharshi Bhavatreya, Maharshi Bhardwaj, Maharshi Shubhatreya
and Maharshi Mahatreya already arrested under HC
orders in Indian waters.
The court has directed the Sheriff, assisted by an independent
surveyor, to fix the terms and conditions of sale, issue
advertisement and take all steps to complete the sale and
report to the court for confirmation of the sale as per the
timeline set by the court.
The unique point about this order is that the company concerned
– Varun Resources – is already under liquidation
based on Insolvency and Bankruptcy Code proceedings
filed by a consortium of banks led by the State Bank of India
before the Mumbai bench of National Company Law Tribunal
(NCLT). The NCLT has already appointed an insolvency
resolution professional (IRP), and a committee of creditors
(CoC), too, is in place.
The case before the HC was, in fact, against the IRP and
CoC, saying that they were not bearing the cost of managing
the ships, its crew’s salaries and supplies to them. Darya
Shipping Pvt Ltd, represented by Advocate Abhishek Khare
before the HC, was appointed by the IRP — as the head of
the CoC — to manage the ships after the NCLT appointed the
IRP last year.
Khare submitted before the court that all the ships were
LPG carriers and, therefore, time bombs, and that any deficiency
in safety procedures or requirements could result in
an explosion, putting the property and life of crew members
as well as the marine life at risk. There are 98 crew members
on-board these six ships.
Khare added that Darya had already spent around Rs 23
crore on the six ships, while it hadn’t been paid a single
penny by the CoC. “Due to non-availability of even basic
necessities like fresh water on all the vessels, some of the
crew members have been afflicted with communicable skin
diseases such as scabies and chicken pox, and no medical
treatment had been made available,” Khare told the court.
He also presented a communication from Deputy Conservator
of Kandla Port, which asked them to take urgent steps
to prevent any untoward incident, as “the vessels were not
displaying lights and shapes in accordance with regulations
of SOLAS Convention. They were a danger to navigation,
unseaworthy and a threat to safety of life and environment.”
SOLAS stands for International Convention for the Safety of
Life at Sea, 1974.
Senior Advocate JP Sen, appearing for the consortium of
the lender banks to whom Varun Resources owed around
Rs 800 crore, deposited a demand draft of Rs 12 crore in the
court. Of this, Darya has been allowed by HC to withdraw
Rs 9 crore for various expenses incurred by it up to February.
Sen, however, did not object to the sale of ships, saying
that it would help restrict the problem as well as the cost of
maintaining the six vessels and that the lender banks would
probably be able to recover their money earlier.
The entire sale process is to be completed by April 20.
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