2000 (2) TMI 782 - HC - Companies Law

Summary

Issues:
1. Proper service of statutory notice for winding up petition.
2. Sufficiency of affidavit evidence.
3. Quantum of interest calculation.
4. Compliance with conditions for stay.

Proper service of statutory notice for winding up petition:
The appellant argued that the statutory notice was not properly served, making the winding up petition not maintainable. The court noted that although the date of the letter was mentioned, the actual receipt date was not denied. As there was no denial of receipt and only a dispute over the contents in the affidavit, the court found that the petition was served, complying with the Companies Act, 1956. The submission regarding improper service failed, and it was established that the company had received and encashed all relevant demand drafts.

Sufficiency of affidavit evidence:
The court rejected the contention that the affidavit evidence was insufficient. It was determined that the evidence provided was satisfactory, and there was no basis to question its sufficiency. The only remaining issue was related to the calculation of interest.

Quantum of interest calculation:
The judge had fixed the quantum of interest at 18 per cent without specifying a clear reasoning or agreement basis. The parties agreed that the Interest Act, 1978 should apply, with the appellant arguing for the current rate of interest as defined in the Act. The court determined that interest should be calculated at 9 per cent per annum from the date of demand, based on the provisions of the Interest Act. The order regarding the quantum of interest was modified accordingly.

Compliance with conditions for stay:
The appellant failed to comply with the conditions for stay granted by an interim order, leading to the admission of the winding up petition due to non-compliance with the stay order. The court allowed the petitioning creditor to advertise in specific publications as directed by the single judge. The appeal was allowed only concerning the quantum of interest, with the rest of the issues being dismissed.

In conclusion, the judgment addressed various issues related to the winding up petition, including proper service of notice, sufficiency of evidence, calculation of interest, and compliance with stay conditions. The court clarified each point thoroughly, ultimately modifying the quantum of interest calculation while dismissing other aspects of the appeal.