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Case Analysis On Floating Services Ltd v/s MV San Fransceco Dipalola

Background of the case:
  1. The case of the plaintiff is that the plaintiff, a Limited Company, incorporated under the laws of United Kingdom and having its address as stated in the cause title, is the owner of defendant No. 1-Vessel.
  2. It is stated that the said vessel was purchased by the plaintiff from one Audrey ventures company on 27-6-2000. That thereafter the plaintiff entered into a Memorandum of Agreement dated 1-7-2003 with defendant No. 2 for sale of vessel for a consideration of US $ 4,00,000 and defendant No. 2 paid 10% of the said consideration.
  3. The expected time of delivery of the vessel was 7-7-2003. However, according to the plaintiff, as defendant No. 2 had not paid the entire balance consideration, no delivery was given by the plaintiff.
  4. It is further averred that defendant No. 1 - vessel was laid up at the port/Harbour of Oostende Port, Belgium since 27-6-2000
  5. Hence, there was no crew on board. The case of the plaintiff is that defendant No. 2 clandestinely removed the vessel from the closed basin and sailed the vessel out of the Oostende Port without paying the balance consideration of US $ 3,60,000.
  6. That for this purpose, it is averred, the defendant No. 2 utilized a forged bill of sale dated 30-6-2003 and obtained a certificate of registration dated 6-11-2003 issued by the Belize Ship Registry.
  7. Before adverting to the contentions raised on behalf of the respective parties it is necessary to briefly recapitulate facts which are admitted and undisputed. The plaintiff, a limited company, has come into existence on 29-6-2000 bearing company No. 04023540.
  8. The plaintiff purchased the vessel on 27-6-2000 from one Audrey Ventures

    Company Limited, U.S.A. The vessel was originally plying under the name of 'Princess Christine' which has subsequently been changed to the present name, i.e., MV 'Sari Fransceco Di Paola'. The plaintiff has no other property and no other business.
  9. Since the day the vessel was purchased by the plaintiff it has been lying in the closed basin of Oostende Port, Belgium. The vessel required extensive repairs. The last account of the plaintiff company has been made upto 30-6-2002.

    (dormant) and similarly last return was made upto 29-6-2002. The next return due was 27-7-2003.
  10. The Company Secretary of the plaintiff is one Eikos International Ltd. and has been appointed on 29-6-2000. The registered address of the plaintiff is the same as address of the Company Secretary. The plaintiff has only one Director, who is sole shareholder and has been appointed in the capacity of Director on 29-11- 2002.
  11. 8. On 18-7-2003 application for having name of the company struck off from the register of the Companies House was made by or on behalf of the plaintiff, under instructions of the plaintiff.
  12. The first Gazette notice for voluntary strike off as statutorily required came to be published on 26-8-2003. Similarly the final Gazette notice for voluntary strike off as statutorily required came to be published on 16-12-2003, and upon such publication in the Gazette, as a statutory consequence, plaintiff company came to be dissolved.

Issues raised and arguments presented
  1. Whether The Plaintiff Could Have Presented The Suit In The Circumstances Of The Case?
    No, the plaintiff could not present a case because the company 'floating services ltd' have been struck down from the registers. As section 651(1) of the 1985 Act states that he Court may at any time within two years from the date of dissolution, where a company has been dissolved, make an order, on such terms as the Court thinks fit, declaring dissolution to be void, on an application made for the purpose by liquidator of the company or by any other person (appearing to the Court to be interested).

    Sub-section (2) of Section 6511 states that thereupon such proceedings may be taken as might have been taken as if the company had not been dissolved. Under Sub-section (3) a person making application is required within seven days after the making of the order by the Court to deliver to the Registrar of the Companies an office copy of the order.

    Therefore, under this section only the liquidator of the company or a person who appears to the Court to be interested can move the Court; and once the Court declares the dissolution to be void thereupon such proceedings may be taken as might have been taken as if the company had not been dissolved.

    So, because of this the court declare the dissolution of the company void.
  2. Whether section 652 (1) and 652(2) is valid in this case?
    No, section 652 (1) and 652 (2) is not valid as registrar I first place send the application of the company for the enquiry as it is carrying on business or in operations . but the company did not answer to the enquiry, thus, according to section 652(2)2states If the registrar does not within one month of sending the letter receive any answer to it, he shall within 14 days after the expiration of that month send to the company by post a registered letter referring to the first letter, and stating that no answer to it has been received, and that if an answer is not received to the second letter within one month from its date, a notice will be published in the Gazette with a view to striking the company's name off the register. Which result in dissolution of the company.
  3. Whether the parties that the consideration for the sale which was fixed as per Memorandum of Agreement at US $ 4 lacs (US $ 4,00,000.00) has not fully passed from defendant No. 2 to the plaintiff?
It is stated that the vessel was already under existing charge and had various outstanding dues against its name. That defendant No. 2 paid off those dues either in entirety or at a settled figure and hence, as per the understanding between the parties the plaintiff had executed the Bill of Sale dated 30-6-2003, which was in fact executed on 12-7-2003.

Case Analysis:
In the case the court said that the company the company cannot work in together as the name has been strike down from the registers they were not performing any business or in operations. The court stated that the striking down oof the company was published in the Gazette and because of the it is confirmed that the company is now have been dissolved.

The court said that the plaintiff cannot seek any restoration on the ground that it was carrying on any business or was in operation at the time when its name was struck off, as the plaintiff have said that the company's name has been struck off because they were not operating any business. And we analysis that the company when dissolved the property and the rights of the dissolved company are deemed to be boma vacantia according to section 654 of the companies act .

The plaintiff cannot seek any relief on the basis that he is the owner of the property without either impleading crown or putting it to notice.

As the plaintiff case was on false statements and suppression of materials of facts the court decided that plaintiff will seeks the damages of @ US $ 4000 per day for wrongful arrest and detention of the vessel . as the plaintiff made reckless allegations with complete knowledge and that such statements and allegations are false .

The court judgement was that this suit has been dismissed and the order of the arrest of the vessel made on 1-3-2004 is hereby set aside . the court order that the plaintiff will bear the cost of the suit and will compensate the loss of the defendant.


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