9911796707
TMI Blog1997 (11) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... the years 1990 and 1993, to the respondent-company through invoices which are at exhibit P-1 to exhibit P-12. As on March 31, 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 exhibit P-13, under sections 433( e ) and 434(1)( a ) of the Companies Act, 1956. After receipt of this notice, the respondent-company paid a sum of Rs. 2,00,000 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. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 per cent. per annum amounting to Rs. 10,92,477. As per the consolidated statement of invoices, which is at exhibit P-1, 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 (P. H.) and Rashid Leathers ( P. ) Ltd. v. Super Fine Shin Traders [1990] 68 Comp Cas 684 (Mad.), it has been urged by learned counsel for the petitioner-company that, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d substantial defence denying the liability. It is further held that section 61(2)( a ) of the Sale of Goods Act gives discretion to the civil court 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 a 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 a 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 in spite of reminders. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "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; ....." And section 3 of the Interest Act reads as follows : "3. (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 or damages already paid is made, the court may, if it thinks fit, allow interest to the person entitled to the debt or damages or to the person making such claim, as the case may be, at a rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the date of institution of the proceedings. These provisions refer to the sole discretion of the civil court to award interest in a suit for 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, the 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, in addition to the unpa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and indefinite amounts, is not a matter to be considered for dissolution of a company, because, the company court has either to allow or disallow the petition, but has no jurisdiction to pass an order directing to pay the claim amount including an unascertained and indefinite amount of interest because 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 the Madras High Courts have not considered the position of law from the aforesaid angles. For the foregoing reasons, I reach the conclusion that there is no acceptable material on record to hold that the respondent-company ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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