1984 (9) TMI 244 - HC - Companies Law

Right to present winding-up petition where company is being wound-up voluntarily or subject to courts supervision

Summary

Issues:
- Can a company be ordered to be wound up if it pays the principal amount but refuses to pay the interest during the pendency of a winding-up petition?
- Is the respondent liable to pay interest on the outstanding amount as per the invoices supplied by the petitioner?

Analysis:
1. Winding-Up Order: The primary issue in this case is whether a company can be directed to be wound up if it pays the principal amount but declines to pay the interest after the filing of a winding-up petition. The court referred to a previous judgment in Company Appeal No. 16 of 1984, where a similar dispute arose. In that case, it was held that when a company pays the principal debt to avoid winding-up but disputes the payment of interest, the company judge has the authority to determine the entitlement to interest. The court emphasized the need to avoid multiple litigations and concluded that failure to pay interest after settling the principal amount can lead to a winding-up order.

2. Interest Liability: The second issue pertains to the liability of the respondent to pay interest on the outstanding amount as per the invoices provided by the petitioner. The petitioner had supplied goods with invoices specifying that if the amount is not paid by a certain date, the respondent would be liable to pay interest at a specified rate. The respondent accepted the goods without objecting to this clause. Additionally, it is noted that in commercial practice, purchasers are typically responsible for paying interest if payment is delayed unreasonably. Given the prevailing high bank rates, the court held that the petitioner is entitled to interest at a rate of 12 per cent per annum until the date of payment. The respondent was given a one-month period to settle the interest amount; failure to do so would result in the petition being advertised in various publications.

In conclusion, the court ruled that if a company settles the principal amount but fails to pay the interest during a winding-up petition, it can be ordered to be wound up. Additionally, the respondent was found liable to pay interest on the outstanding amount as per the terms specified in the invoices provided by the petitioner.