9911796707
TMI Blog1992 (11) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... pleted in December, 1989, and the period of 30 days thereafter expired some time in January, 1990. According to the practice and usage of the market, the petitioner is entitled to interest on the outstanding amount at 18 per cent. per annum from February 1, 1990. The company has been acknowledging its liability and had also confirmed that the job had been carried out by the petitioner to the satisfaction of the company. The petitioner has demanded payment of Rs. 1,20,707.60 with interest at 18 per cent. per annum but the company has not even sent a reply to the letters of the petitioner and has further failed to pay the amount within three weeks from the date of receipt of the letters of demand and thus the company is unable to pay its debts and liable to be wound up. In the affidavit filed in opposition to the petition various pleas have been taken by the company including the plea that no notice of demand has been served on the company prior to the presentation of the petition and even otherwise notices alleged as "notices of demand" are not legal. During the pendency of this petition the company has, however, paid to the petitioner a sum of Rs. 1,15,249.60 being the undisput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he receipt of the letter and also stated that in case the payment is not released as requested, the petitioner will be constrained to charge overdue interest at 18 per cent. per annum from the due dates of payment till realisation. Similar requests were repeated by the petitioner in his letters dated June 6, 1990, and June 30, 1990. As payment was still not made this petition was filed. The company admitted the liability of only about Rs. 1,15,000 and paid that amount to petitioner during pendency of these proceedings. The delay in making this payment to the petitioner is about two years. The question to be determined is, whether, in the absence of a specific contract for payment of interest even where the price of the goods is admittedly not paid by the due date, the liability to pay interest and rate thereof can be adjudicated by the company court in a petition filed for winding up of the company and on the failure of the company to make payment of the interest amount as may be adjudicated, the company judge can direct winding up of the company or the question of interest should be left to be determined by a civil court where the creditor should file a suit for recovery of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alculation as to the amount of interest has not been stated. The exact amount of interest payable is likely to change depending upon the time when the payment of the principal amount is made. The court, in its discretion, on a consideration of all the facts and circumstances of the case and the financial market conditions, in the absence of agreement as to the rate of interest between the parties, can award a reasonable rate of interest. There may not be a specific contract for payment of interest but if the contract provides for payment of the price of the goods by a particular date it is clear that the creditor would ordinarily be entitled to interest if the amount is not paid by the due date. As noticed above, the court has discretion to award interest at a reasonable rate on the amount of price from the date on which the price was payable to the seller. Unlike the facts of the cited decision the petitioner has been writing to the company that in case the outstanding balance is not released the petitioner will be constrained to charge overdue interest at 18 per cent. per annum from the due dates of payment till realisation. With utmost respect, I am unable to concur with the opi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e creditor. Under section 434(1)( a ) a presumption about the insolvency of the company is liable to be drawn where the creditor serves on the company a demand requiring it to pay the sum due and in case the company for three weeks after the service of demand neglects to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor. Neither the Act nor the Rules provide for any particular form of demand. It is also well-settled that in the demand served on the company under section 434(1)( a ), the non-specification of the period of three weeks does not result in invalidating the demand. According to Palmer's Company Precedents (Part II, 17th edition, page 26), the demand need not be in a special form. It need not use the word "demand". A preemptive request or "call" for payment would no doubt suffice. A demand in excess of what is due can still be a valid statutory demand. It is correct that the petitioner in the letters sent to the company requesting it to make payment of the balance outstanding amount with interest at 18 per cent. per annum has not stated as to what consequences will follow and what he will do in case payment as requested was not m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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