2014 (6) TMI 1005 - HC - Companies Law

Amount payable on account of principal by the company to the petitioning creditor after being given credit for ₹ 6 lakhs paid by it to the petitioning creditor - interest at 8% per annum on the reducing balance on and from the date of issuance of statutory notice till realisation - Held that - It is pertinent to note that the matter has come at the post advertisement stage and in the event of any default in payment the company shall be wound up forthwith. The Official Liquidator will be at liberty to take possession of the books, records and documents so also the assets and properties of the company forthwith. If on the contrary payment is made and dues liquidated shall be permanently stayed. The advertisement costs be paid by the company on liquidation of the sums mentioned above unless otherwise agreed to between the parties

Summary

Issues: Failure to make timely payment, admission of C.P.No.45 of 2013, payment schedule, consequences of default, winding up of the company, advertisement costs

The judgment delivered by the High Court of Calcutta addressed the issue of the company's failure to make timely payments as per the court order dated 7th May, 2013. Despite being directed to pay &8377; 30 lakhs in ten equal monthly instalments, the company could not honor the first payment on time, leading to the agreement between the parties failing. As a result, the court admitted C.P.No.45 of 2013 for the principal sum of &8377; 22,62,356, after giving credit for the belated payment of &8377; 6 lakhs. This admitted sum would accrue interest at 8% per annum on the reducing balance from the date of issuance of the statutory notice until realization.

Regarding the payment schedule, the court provided the company with an opportunity to settle the outstanding amount in a structured manner. The company was directed to make payments in varying amounts over different timeframes, starting with &8377; 1.25 lakhs for the first six months, increasing gradually up to &8377; 2 lakhs from the fourteenth instalment until the complete liquidation of the outstanding dues.

In the event of any default in payment, the judgment stipulated that the company would be wound up immediately. The Official Liquidator would then have the authority to take possession of the company's books, records, assets, and properties. Conversely, if the payments were made as per the schedule and the dues were cleared, C.P.No.45 of 2013 would be permanently stayed.

Moreover, the judgment mentioned that the company would be liable to pay the advertisement costs upon liquidation of the specified sums, unless agreed otherwise between the parties. Additionally, the court allowed for the provision of an urgent certified photocopy of the order to be supplied to the parties upon compliance with all necessary formalities. This comprehensive judgment aimed to address the non-compliance of payment obligations, provide a structured payment plan, and establish clear consequences for default while ensuring the protection of the petitioning creditor's interests.