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Interpretation of contract for payment of interest in a commercial transaction under Companies Act, 1956. Analysis: The judgment involves a company appeal under section 483 of the Companies Act, 1956, filed by the appellant against the order passed by the company court for winding up the appellant-company due to outstanding dues. The petition was filed by a steel manufacturing company seeking payment of a due amount along with interest at 18% per annum. The appellant contested that there was no contract for payment of interest, thus challenging the basis for winding up. The appellant argued that the company court cannot decide on interest rates in the absence of a clear agreement between the parties. However, the court found that the appellant had previously acknowledged the liability for interest in its communications and conduct, estopping them from denying the obligation. The court emphasized that the appellant's actions indicated an agreement to pay interest at the bank rate of 18% per annum. The court observed that the appellant's requests to not charge interest and the acknowledgment of liability in previous communications were significant factors in determining the appellant's obligation to pay interest. The court highlighted that the appellant's conduct, including the proposal for credit terms and the acknowledgment of interest in written statements, indicated a tacit agreement to pay interest at the bank rate. The court also noted that the appellant did not dispute the receipt of goods or the utilization of the same, implying acknowledgment of the principal amount due. The court emphasized that the petition was not merely a recovery suit but a statutory petition under the Companies Act, filed after due notice, and based on the company's inability to pay debts without a valid reason. Ultimately, the court dismissed the appeal, upholding the company court's decision for winding up the appellant-company based on the established liability to pay interest at the bank rate. The judgment underscores the importance of parties' conduct and communications in determining contractual obligations, especially in commercial transactions governed by statutory provisions like the Companies Act, 1956.
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