9911796707
TMI Blog2001 (1) TMI 867X X X X Extracts X X X X X X X X Extracts X X X X ..... re this Court. As regards interest, the company was agreeable to pay at the agreed rates till 23-12-1996, and thereafter at the rate of 10 per cent per annum. It is significant, that the claim of Hindustan Development Corpn. Ltd., an intercorporate deposit holder of the company, had been admitted by an order of the Court made on 30-9-1997. The company failed to pay its dues, in spite of an opportunity afforded to it, and the petition was advertised by publication in the local newspapers. In the process, the matter acquired a representative character. According to the company, since this was the only petition which had been advertised, the company agreed to pay in terms of the order dated 30-9-1997. The reason why the company had proposed to pay the agreed interest from 23-12-1996, according to the counsel for the company, was because that was the date of the presentation of the petition by Hindustan Development Corpn. Ltd. In a further application made in this application, an order was made on 12-10-1999, directing the parties to file their respective affidavits, and all winding up petitions were adjourned till the disposal of the application. The application had been moved upon no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Hindustan Development Corpn. Ltd. and Kirloskar Investment Finance Ltd. In fact, their submissions had been adopted by the counsel appearing for the other opposing creditors. By way of additions, it had been submitted that the company had incorrectly computed the dues, by adjusting the amounts paid out of the principal instead of the interest, and that the petitions of some creditors had been admitted by the Court and interest from the date of presentation of their petitions had been allowed at the rate of 18 per cent per annum and that thus an order in this application would in effect amount to variation of the earlier orders of this Court, which this Court was not empowered to do. It was argued, by the counsel for Hindustan Development Corpn. Ltd., that there were orders of this court, admitting the winding up petitions of several creditors, and that such orders would be rendered ineffective and modified to the prejudice of those creditors, in the event an order was made in the present application. He contended, that a scheme application which had been made by the company in April, 1999, was pending before this Court, and another scheme application had been prepared by Ki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tlal v. Mafatlal Industries Ltd. [1996] 87 Comp. Cas. 792 2 (SC). 4. The company was not insolvent, in terms of section 434 of the Act, argued the counsel for the company and the petitioning creditors merely wanted reimbursement of their loan amount, with interest. This Court, he submitted, while considering winding up of a company was fully empowered under section 443( d ) of the Act, to make any other order that it thinks fit . He contended that the Court at the time of admitting winding up petitions, invariably afforded the company opportunity to pay its debt. Where the company did pay, he went on, the Court would direct the petition to remain permanently stayed. Yet such payment, he argued, was not and could not in law, be interpreted to mean, fraudulent preference. According to him once a winding up petition had been advertised all creditors were deemed to have notice, and if so advised they were at liberty to come to the Court, either to support the petitioning creditor or, oppose the winding up of the company, and those who did not choose to come to the Court could not expect to benefit from those proceedings. He agreed that the fund which was being held by the join ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spective computations of their alleged dues, and that they did not challenge the order dated 12-4-2000, and that in that view of the matter they were estopped from refusing to receive payment in terms of the order dated 30-9-1997. He submitted, that some of the creditors who were objecting, had in fact already received their principal dues from the company, and yet such payment was not regarded by them to be fraudulent preference. 5. In those circumstances it would appear, that the two scheme applications one made by the company and the other by Kirloskar Investment Finance Ltd. respectively, were pending before this Court as on date. It would also appear that by reason of the publication of advertisements of the winding up petition of Hindustan Development Corpn., it had acquired a representative character, and all lawful creditors of the company became entitled to come before this Court as and from the date of publication. The question was, would the Court in those circumstances entertain the prayer of the petitioner, and allow disbursement out of the fund, for the payment of debts of the intercorporate deposit holders and bill discounting creditors. I have already mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Finance Ltd. had even proposed that the company should allot shares in its favour, in lieu of its dues. The records also revealed, that Kirloskar Finance Investment Ltd. till date did not take any legal step whatsoever against the company, for the recovery of its alleged debt. It is significant, that none of the creditors made any objection when all the winding up petitions were adjourned, so that this application made by Capsulation Services Ltd. could be taken up by the Court and heard expeditiously which in effect would dispose of the winding up petitions as well. 7. I have given serious considerations to the arguments on behalf of the objecting creditors, that any payment without being approved in a sanctioned scheme would amount to preferential payment, and in contravention of the laws of the land in that respect. In an order admitting the claim of a petitioning creditor, the Court invariably affords the company an opportunity to pay the debt, often allowing instalments. Such payment, however, is not considered in law, to be preferential payment. In my view, the question whether any payment by the company was preferential payment would and could arise only when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch creditor would of course be at liberty to take such steps as the creditor or creditors may be entitled in law, to recover their debt, as they may be advised. The company, I have already observed, was admittedly solvent and a going concern. There could, therefore, be no impediment in making an order as prayed for in the instant application, and allowing disbursement out of the fund amongst all those creditors who were before this Court. The suggestion made by counsel for the company, that those creditors who were not agreeable to receive payment, this Court would direct their dues to be set aside, would appear to me to be just and fair. In the present socio-economic condition of the country, when employment was at a very low ebb, indeed it would be sheer shortsightedness and reckless disregard of the progress of the country s trade, commerce and industry, to allow the company to continue to remain indebted, with interest accruing, though admittedly there was sufficient fund for the Court to make an order for payment, and especially so as none of the creditors before this Court was inclined to wind up the company. In my view, even if some of the creditors are paid, out of so many, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th interest at the agreed rates till the filing of the petition, and thereafter at a rate to be decided by the Court, until the company paid the entire dues. Of course, there would be the usual default clause, and in the event of a default there would be directions for publication. The order proposed by the company in this application was an order, identical to the one I have enumerated above. Therefore, as matter stand today, the creditors could not expect to, and would not, obtain a different order in their pending petitions. I have carefully considered the law, sought to have been relied on by the counsel for the objecting creditors, and I am inclined to find that the objections were whimsical and without any force of law. Since the company was, as at present, agreeable to pay its creditors, in a manner as they would have received payment of their debts, had their respective winding up petitions been disposed of by an order of the Court, it is my considered view that no further interest should be allowed to accrue on their principal dues as and from the date when payment is made. For those reasons, I allow this application. The creditors who are willing to accept payment of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent per annum till the date when payment is made. Those creditors, however, who were not agreeable to receive payment and were not present in the meeting, the joint special officers shall record the same in the minutes of the meeting, to be drawn up by them, and make over the surplus money, if any to the Registrar, original side of this Court, who shall hold such money till further orders of this Court. The Registrar, original side shall invest the monies in a short-term deposit with the Standard Chartered Grindlays Bank, Church Lane Branch, Calcutta. The company shall continue to deposit monies with the Registrar, original Side, as it had been depositing in pursuance of the earlier orders of this Court. The joint special officers shall stand discharged after carrying out the above directions and filing a report in that respect in the Court, as regards compliance, together with the minutes of the meeting. It is made clear, that no further interest shall accrue on the principal dues of those creditors who appeared in this application and were represented before this Court, by the counsel, and were not agreeable to receive payment in terms of this order. The petition of those c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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