2018 (10) TMI 1316 - SC - Companies Law

Interest on outstanding dues - Insolvency application pending before the NCLT - appellant submits that all amounts have been paid to the depositors within the extended period of time - Held that - Learned counsel appearing on behalf of the respondent submits that penal interest is also attracted under Rule 17 at the rate of 18% per annum. Since the appellant has paid within the extended period of time, we do not agree to the same. It is, therefore, made clear that all amounts of interest at the rate of 12/12.5% per annum from the date of maturity till the actual payment should be released to the depositors notwithstanding any other impediment in the way. The amount to be disbursed to the depositors should be made within a period of twelve weeks from today. The insolvency application pending before the NCLT will be disposed of on its own merits without reference to the impugned judgment of this Court.

Summary

Issues: Disbursement of interest to depositors, Payment of penal interest, Timely payment compliance, Disposal of insolvency application

Disbursement of interest to depositors:
The appellant's counsel argued that all amounts were paid to depositors within the extended period, while the respondent's counsel contended that payments were made only till the date of maturity, not the actual payment date. The appellant agreed to pay interest at 12/12.5% p.a. from the date of maturity till actual payment if not already paid. The respondent sought penal interest at 18% per annum under Rule 17, but the court disagreed since the payments were made within the extended period. The court ordered that interest at the rate of 12/12.5% per annum from the date of maturity till actual payment must be released to depositors without any hindrance. The disbursement to depositors was directed to be completed within twelve weeks.

Payment of penal interest:
The respondent argued for penal interest at 18% per annum under Rule 17, but the court rejected this claim as the appellant had made payments within the extended period. The court emphasized the release of interest at the rate of 12/12.5% per annum from the date of maturity till actual payment to the depositors, overriding any other obstacles.

Timely payment compliance:
The appellant assured that all amounts were paid to depositors within the extended period, while the respondent highlighted that payments were made only till the date of maturity, not the actual payment date. Upon clarification, the appellant agreed to pay interest at 12/12.5% p.a. from the date of maturity till actual payment if not already paid. The court stressed the importance of releasing interest to depositors without delay, specifying the rate and period for such payments.

Disposal of insolvency application:
The judgment directed that the insolvency application pending before the NCLT would be decided on its own merits without any reference to the impugned judgment of the Supreme Court. This decision ensured a separate and unbiased consideration of the insolvency application based on its individual merits, detached from the issues addressed in the Supreme Court's ruling.