Notice of sale to be given to mortgages, register, & c.
Prior to the forced sale of a ship, pursuant to the provisions of the Civil Procedure Code or any other law for the time being in force relating to the sale of property in admiralty
proceedings, the executing officer shall give or cause to be given thirty days' written notice of the time and place of such sale to
(a) all holders of mortgages and other preferential rights registered under Chapter 4 which have not been issued to bearer;
(b) such holders of such mortgages and rights as have been issued to bearer, whose claims have been notified to such officer;
(c) such holders of maritime liens set out in section 83, whose claims have been notified to such officer;
(d) the Registrar of the port of registration of the ship.
Effect of sale on mortgages. & c
In the event of the forced sale of a ship in accordance with the provisions of the Civil Procedure Code or any other law for the time being in force relating to the sale of properly in
admiralty proceedings, and this Chapter
(a) all mortgages and other preferential rights registered under Chapter 4 (except those assumed by the purchaser with the consent of the holders thereof), and
(b) all liens and other encumbrances of whatsoever nature (but not including a charter party or contract for the use of the ship), shall cease to attach to the
ship.
Disposition of proceeds of sale
The costs awarded by the Court and arising out of the arrest and subsequent sale of a ship and the distribution of the proceeds thereof shall be paid first out of the proceeds of such
sale, and the balance shall be distributed among
(a) the holders of maritime Hens under section 83;
(b) the holders of preferential rights under section 86 ; and
(c) the holders of mortgages and other preferential rights registered under Chapter 4, in accordance with the provisions of this Chapter and to the extent necessary to satisfy their claims.
When a certificate that a ship is sold free of mortgages, liens, & c, shall issue
When a ship, registered in the territory of any State which has ratified or acceded to the International Convention for the Unification of Certain Rules relating to Maritime Liens and
Mortgages concluded at Brussels on 27th May, 1967, has been the subject of a forced sale in Sri Lanka, the executing officer shall, at the request of the purchaser, and on being satisfied that the provisions of this Chapter have been complied with, issue a certificate that the ship is sold free of all mortgages, liens and other rights (except those assumed by the purchaser), provided that the proceeds of such forced sale have been deposited with the authority competent to distribute such proceeds to the persons entitled thereto.
Action by Registrar on receipt of certificate
On receiving from the competent authority of any State referred to in section 94 any certificate of the nature referred to in such section and relating to any ship registered under
this Act, the Registrar shall delete from the register all mortgages and other preferential rights relating to such ship (except those assumed by the purchaser) or, as the case may be, issue a certificate of de-registration for the purpose of re-registration.
