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TMI Blog1996 (6) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... s not received the cheque for Rs. 1,10,620 referred to in the counter. However, it is now admitted by both sides that the cheque for Rs. 1,10,620 dated November 4, 1994, has since been received by the petitioner through its counsel in December, 1994. The following issues were framed: (1)Whether the respondent is liable to pay interest on the value of the goods supplied by the petitioner? (2)Whether the respondent-company is liable to be wound up for inability to pay the amount? On behalf of the petitioner, its marketing manager was examined as PW-1 and exhibits A-1 to A-18 were marked, while the accounts officer was examined on behalf of the respondent company who got marked exhibits B-1 to B-9. Issue No. 1 : It is well-settled that a company can be wound up only when it is proved that the debt claimed against it is ascertained, definite and undisputed and that the company has failed to pay the same and winding up cannot be ordered if there is bona fide and substantial defence denying the liability. So, the question that has to be examined is whether the liability of the respondent company to pay interest on the overdue bills is bona fide , ascertained and undisput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of despatch whichever is earlier. But this exhibit A-3 was not mentioned in exhibit A-12, the first legal notice. It is referred to for the first time in exhibit A-14 which is the second legal notice. It is significant to note that it is not signed by the respondent. Mr. B.V. Subbaiah, learned counsel for the respondent, explained that the admission of the respondent in exhibit A-10 agreeing to pay Rs. 2,84,839 is a mistake. In this connection, section 209 of the Companies Act which was amended by the Companies (Amendment) Act, 1988, has to be noticed. "209. Books of account to be kept by company. (1) Every company shall keep at its registered office proper books of account with respect to ( a )all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure take place; ( b )all sales and purchases of goods by the company; ( c )the assets and liabilities of the company; ( d )in the case of a company pertaining to any class of companies engaged in production, processing, manufacturing or mining activities, such particulars relating to utilisation of material or labour or to other items of cost as may be prescribe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the amount claimed unless it is established that they are reflected in the account books. In view of the above discussion, it has to be held that the parties have not stipulated for payment of interest on overdue bills. The next contention of Mr. Y.N. Lohita, learned counsel for the petitioner, is that in the absence of stipulation of interest, the petitioner is entitled to interest under section 61(2)( a ) of the Sale of Goods Act which reads as follows : "Interest by way of damages and special damages... (2) In the absence of a contract to the contrary, the court may award interest at such rate as it thinks fit on the amount of the price ( a )to the seller in a suit by him for the amount of the price from the date of the tender of the goods or from the date on which the price was payable..." I agree with the contention of Mr. B.V. Subbaiah that this section gives discretion to the civil court to award interest in the absence of a stipulation of interest in the contract, that too in a suit for recovery of money or damages and as the winding up proceedings are not in the nature of suit for recovery of money, the petitioner cannot invoke that section. Mr. Lohi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount in question or not. The basic policy of law is to avoid multiplicity of litigation. Learned counsel for the appellant also referred us to the order of Goyal J. rendered in C.P. No. 77 of 1983-decided on July 20, 1984, Unisystems Private Ltd. v. Stepan Chemical Ltd. [1985] 58 Comp. Cas. 875 (P H), wherein Goyal J. had observed that where no agreement for the payment of interest existed and the creditor had claimed interest, no winding-up order could be passed. With respect, if the said observations are intended to cover the cases of the present kind, then we find ourselves unable to concur in that view. The said observations may be correctly applicable to a case where winding-up initially is sought by a party on the ground that certain amount by way of interest was due from the other party which the other party had failed to pay up despite demand notice and the other party raises a bona fide dispute as to the right of the creditors to claim interest in the absence of any agreement regarding payment of interest or any other plausible ground, but the position would be entirely different where the amount alleged to be due from the company sought to be wound up include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion. The Bombay High Court in Gangadhar Narsinghdas Agrawal v. Timble Pvt. Ltd. [1992] 74 Comp. Cas. 846 has held that when there is no stipulation for payment of interest, a winding up petition cannot be ordered on the ground that interest is not paid by the company. In that case, the creditor claimed an amount of Rs. 3,86,677.93 which represented the principal amount of Rs. 75,574.46 and interest thereon at 18 per cent. per annum. The petitioner therein could not show any contract entitling it to charge interest. The company in one of its letters agreed to pay interest at the rate of 10 per cent. per annum. But the same was not accepted by the creditor. The company has admitted, as per its books of account, that it owes Rs. 73,952.66 only. The learned single judge dismissed the petition for winding up with a direction to the company to pay the admitted amount of Rs. 73,952.66. I respectfully agree with the decision of the learned single judge of the Punjab and Haryana High Court in Unisystems Private Ltd. v. Stepan Chemical Ltd. [1985] 58 Comp. Cas. 875 and of the Bombay High Court in Gangadhar Narsinghdas Agrawal v. Timble (P.) Ltd. [1992] 74 Comp. Cas. 846. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not furnished. But in the bills, the date of despatch is shown as March 29, 1991. Mr. Y.N. Lohita, learned counsel for the petitioner, explains this discrepancy saying that they must have been raised before the financial year 1990-91 for Central excise purpose. But even accepting this explanation, the petitioner has not explained how it is entitled for interest from May 24, 1991, when the documents were sent to its Bombay office long after that date and goods were despatched to the respondent still after a couple of months. Thus, I agree with the contention of Mr. B.V. Subbaiah, learned counsel for the respondent that even assuming that the petitioner is entitled to interest, its claim is not consistent or definite and accordingly the claim of the petitioner for winding up is negatived. Before parting with the case, I have to observe that the petition ought not to have been numbered by the registry as it is not in conformity with rule 21 of the Companies (Court) Rules, 1959, which requires that in the case of a petition presented by a body corporate, it has to be verified by an affidavit in Form No. 3 signed by a director or secretary or other, principal officer and that permiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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