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TMI Blog1997 (11) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... company through invoices which are at Ex. P1 to Ex.P12. As on31-3-1994, an amount of Rs. 9,02,322 was due to be paid by the respondent-company to the petitioner-company against supply of goods on credit. The respondent-company did not pay the said amount, therefore, the petitioner-company had sent notices as also the statutory notice, a copy of which is at Ex. P13, under sections 433(3) and 434(1)( a ) . After receipt of this notice, the respondent-company paid a sum of Rs. 2, lakhs leaving a balance of Rs. 7,02,322. The respondent-company paid the balance amount of Rs. 7,02,322 during the pendency of these proceedings to the petitioner-company. The petitioner-company on 7-7-1995 filed this petition for compulsorily winding up alleging tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoices which is at Ex. P 16, he has stated that in all the invoices, that is credit memos, it has been printed that interest at the rate of 21 per cent per annum will be charged if the payment is kept unpaid for more than 45 days. He has further admitted that there is no written agreement with the respondent-company for payment of interest, except the interest clause printed in the invoices. Relying on Stephen Chemical Ltd. v. Innosearch Ltd [1986] 60 Comp. Cas. 702 (Punj. Har.) and Rashid Leathers ( P. ) Ltd v. Super Fine Skin Traders [1990] 68 Comp. Cas. 684 (Mad.) it has been urged by the learned counsel of the petitioner-company that, in the counter, the respondent-company has not specifically denied that the petitioner- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to award interest in the absence of 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 seeking winding up of a company cannot invoke that section. The winding up proceedings are not an alternative for recovery of the money for which civil suit is ordinarily the remedy. For claiming winding up, the creditor has to establish that the respondent owes a definite and ascertained amount to it and that it has failed to pay the same inspite of reminders. The Company Court cannot be used as forum by the creditor to establish its rights either regarding that debt or regarding the interest. Section 3 of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est 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;" And section 3 of the Interest Act reads as follows: "3 Power of Court to allow interest. (1) in any proceedings for the recovery of any debt or damages or in any proceedings in which a claim for interest in respect of any debt of damages already paid is made, the Court may, if it thinks fit, allow interest to the person entitled to the debt of damages or to the person making such claim, as the case may be, at a rate not exceeding the current rate of interest, for the whole or part of the following period, that is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovery of money. Therefore, the concerned creditor is not at all entitled to interest until the Court so orders. In other words, it cannot be said that the creditor is entitled to interest as a matter of right before the institution of the proceedings in the Court. Before that, alleged amount of interest or damages is unascertained. The creditor cannot claim interest at any particular rate, in the absence of any agreement to pay the same, prior to the institution of the proceedings. He cannot claim that from the person liable to pay the price of goods he is entitled to, in addition to the unpaid price of goods, the interest claimed and calculated according to his unilateral act and, therefore, the concerned person cannot be said to be in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allow the petition, but has no jurisdiction to pass an order directing to pay the claim amount including unascertained and indefinite amount of interest be cause it is the function of a Civil Court to award interest and under these circumstances, on the mere ground of multiplicity of proceedings, it cannot be considered for issuing such a direction. The Punjab and Haryana and Madras High Courts have not considered the position of law from the aforesaid angles. 13. For the foregoing reasons, I reach the conclusion that there is no acceptable material on record to hold that the respondent-company had become commercially insolvent and, therefore, it is liable to be wound up. 14. In the result, the petition fails and is hereby dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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