1994 (4) TMI 335 - HC - Companies Law

Summary

Issues:
1. Granting set off to a company in liquidation.
2. Claim of set off being barred by time.

Detailed Analysis:

Issue 1: Granting set off to a company in liquidation
The appellant-company filed a petition under sections 446 and 468 of the Companies Act seeking recovery from the respondent. The appellant had acquired the undertaking of a wound-up company by law. The account books showed a balance recoverable from the respondent. The respondent denied the claim, alleging that goods worth a certain amount were not returned by the appellant. Witnesses from both parties were examined, and the company judge held that the appellant failed to prove its case. The appellant's witnesses provided evidence of the amount due, supported by ledger entries and reconciliation statements. The respondent's witness disputed the return of goods. The judge, however, rejected the appellant's claim based on oral evidence, stating it did not advance the case. The judge's decision was based on hypothesis and conjecture, ignoring the documentary evidence presented by the appellant. The judge's conclusion on this issue was set aside, and it was held that the materials were indeed returned by the appellant to the respondent.

Issue 2: Claim of set off being barred by time
Regarding the claim for interest at 12% per annum, the appellant failed to provide evidence justifying the rate or the delay in payment by the respondent. The judge found the claim for interest to be exaggerated and not based on prevalent practice. The appellant was only entitled to interest from the date of filing the petition, not prior to that. The appellant's claim for interest at 18% prior to the petition was not proven. Consequently, the appellant was granted interest at 12% from the date of filing the petition. The judgment and decree of the company judge were set aside, and a decree for recovery of the principal amount along with interest at 12% from the date of filing the petition was passed in favor of the appellant-company against the respondents.