Statutory port lien and vessel sale rights prevail over winding up claims and company court control.

The port authority's statutory power under the Major Port Trusts Act to arrest and sell a vessel for unpaid dues was treated as a special, vessel-attaching remedy that operated outside ordinary winding up administration. The text states that this statutory priority prevailed over the claims of secured and unsecured creditors, and that sections 529 and 529A of the Companies Act, 1956 did not displace it. It also states that leave of the company court under section 446 was not required for exercise of the distraint and sale power, and that the court could not redirect that right to the sale proceeds without the port authority's consent.

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Issues: Whether the port authority's statutory right under section 64 of the Major Port Trusts Act, 1963 to arrest and sell the vessel for unpaid dues prevailed over the claims of creditors in winding up and whether the vessel could be sold only through the company court under the Companies Act, 1956.

Analysis: The statutory power conferred on the port authority to arrest and sell a vessel for recovery of rates and charges was treated as an overriding right attaching to the vessel itself. That right was held to be superior to the claims of secured and unsecured creditors in winding up, and outside the ordinary process of winding up proceedings. The provisions of section 529 and section 529A of the Companies Act, 1956 did not displace this statutory priority. Since the port authority's right was one of distraint and sale under the special statute, leave of the company court under section 446 was not required for its exercise, nor could the court transfer that right to the sale proceeds without the port authority's consent.

Conclusion: The port authority's statutory lien and power of sale prevailed over the winding up claims, and the High Court's direction requiring sale through the company court was set aside. The appellant was held entitled to sell the vessel and realise its dues from the sale proceeds in accordance with law.

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