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TMI Blog2008 (2) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... - A. M. KHANWILKAR, J. Shailesh Shah ,Pandya and Poonawalla for the plaintiff . Debashish Mitra for the official liquidator. JUDGMENT A.M. Khanwilkar, J . This suit is filed for recovery of a sum of Rs. 1,49,805.91 with further interest on Rs. 1,13,747.87 at 21 per cent, per annum till repayment of the amount. An incidental relief is claimed by the plaintiff that the plaintiff be permitted to withdraw the amounts deposited by the defendant with the Prothonotary and Senior Master of this court with interest accrued thereon towards the decree that may be passed in the present suit. The plaintiff asserts that between April 19, 1978 and November 6,1978, the plaintiff sold, delivered and supplied goods to the defendant under eighteen different invoices from time to time as per the orders placed by the defendant in that behalf. According to the plaintiff, the value of the goods supplied to the defendant was in the sum of Rs. 4,34,510.87. It is the case of the plaintiff that the defendant, did not raise any dispute regarding quality, quantity or price of the goods supplied. In fact, the defendant made part payment from time to time aggregating to Rs. 3,20, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uit in this court, the amount deposited by the defendant would stand transferred to the suit account to remain as security towards the decree that may be passed in that suit. As per the said order passed by the Division Bench, the defendant deposited the amount of Rs. 1.20 lakhs within the specified time. Similarly, the plaintiff instituted the present suit in this court for recovery of the outstanding dues from the defendant-company. As per the order passed by the Division Bench, the amount deposited by the defendant stood transferred to the present suit account which, in turn, has been invested by the Prothonotary and Senior Master in fixed deposit scheme. Accordingly, the present suit is filed for the following reliefs: "( a ) that the defendant be ordered and decreed to pay to the plaintiff a sum of Rs. 1,49,805.91 with further interest on Rs. 1,13,747.87 at the rate of 21 per cent, per annum from the date hereof till payment; ( b ) that the plaintiff may be permitted to withdraw the amounts deposited by the defendant with the Prothonotary and Senior Master of this hon'ble court with interest accrued thereon towards the decree that may be passed herein; ( c )for costs of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, 1978, it is the case of the defendant that the same was found to be defective which fact was brought to the notice of the plaintiff forthwith. It is the case of the defendant that the plaintiff assured the defendant that the plaintiff would make good any loss that would be caused to the defendant on account of defective goods. It is further stated that by letter dated October 31, 1978, the defendant recorded that 80D polytex yarn supplied by the plaintiff under bill No. 826 dated October 28, 1978 and bill No. 830 dated October 30, 1978, were defective as there was filamentation in the yarn. In the said communication the defendant also placed on record that even the previous supplies made by the plaintiff were also found to be defective. The description about the nature of defect is also highlighted in the said communication. In paragraph 4( c ) of the written statement it is stated that one R.S. Samaria, the financial controller of the defendant, had contacted the plaintiff and had informed about the defective quality of the goods and the nature of loss caused to the defendant on that account. The plaintiff had assured that any loss caused to the defendant on account of defect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, per annum) is due and payable by the defendants? 2. Whether the defendants prove that the goods sold and supplied by the plaintiffs was of inferior quality as more particularly set out in paragraph 4( a ) to 4( d ) of the written statement? 3.If answer to issue No. 2 is in the affirmative whether the defendants prove they had suffered a total loss of Rs. 1,10,000 on account of inferior quality of goods supplied by the plaintiff and therefore are entitled to (get adjustment) to that extent as more specifically set out in paragraph 4( c ) of the written statement ? 4.What decree ? 5.Further and other relief." The plaintiff has filed compilation of original documents of the relevant eighteen invoices, debit notes. Form No. 19A and copy of letters, affidavit and the orders passed in the company petition by single judge as well as of the Division Bench. Besides, the plaintiff has filed an affidavit in lieu of examination-in-chief sworn on January 19, 2006, reiterating the case made out in the plaint. The plaintiff has also proved the relevant documents placed on record along with the compilation of original documents. The original defendant-company nor the newly added defe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amaria, financial controller, which concedes the position that the amount paid by the defendant to the plain tiff was in respect of carrying charges and interest at 21 per cent, per annum on the stated amount. The defendant has deducted 10 per cent of such amount towards tax deducted at source. The said certificates are part of the compilation of the original documents at pages 46 to 52. These are strong circumstances and contemporaneous record relied on by the plain tiff to establish his claim towards agreement to pay interest for delayed payment at 21 per cent, per annum. Indeed, the plaintiff also relies on the legal notice sent to the defendant which records this position, which remained unrefuted by the defendant. Suffice it to observe that even the case made out by the plaintiff that there was an agreement between the parries that the defendant would pay interest at 21 per cent, per annum for delayed payment has been established by the plaintiff. On this finding the plaintiff would not only be entitled to a decree in respect of principal amount of Rs. 1,13,747.87 but also towards interest amount at 21 per cent, per annum accrued on such outstanding amount till the same is pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the defendant-company regarding interest rate payable on the outstanding dues towards late payment. In such a case, rule 156 will have no application. Suffice it to observe that the exposition in the aforesaid two decisions pressed into service will have to be understood in the context of the fact situation of those cases. Indeed, it is well established position that once a winding up order is passed, the undertaking and the assets of the company pass on and remain under the control of the official liquidator, whose statutory duty is to realise them and to pay from out of the sale proceeds to its creditors. Such creditors acquire, on order of winding up being passed, a right to have the assets realised and distributed amongst them pari passu . No new rights can thereafter be created and no uncompleted rights can be completed. For, doing so would be contrary to the creditors' right to have the proceeds of the assets distributed amongst them pari passu (see J.K, (Bombay) P. Ltd. v. New Kaiser-I-Hind Spinning and Weaving Co. Ltd. [1970] 40 Comp. Cas. 689 (SC) ; [1970] 1 Comp LJ 151). Keeping in mind the above statement of law, the question is whether the plaintiff woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decretal amount, that would be subject to the plaintiff giving an undertaking that the surplus amount than the amount specified for the other similarly placed secured creditors keeping in mind the parameters of sections 529 and 529A of the Companies Act, will be brought back to be made over to the official liquidator so that the same can be disbursed to the eligible persons. That takes me to the next contention raised on behalf of the official 21 liquidator. It was argued that as the company was already wound-up, this court has no jurisdiction to permit the plaintiff to withdraw the amount lying deposited in this court to the extent of his decretal claim and interest. I am in agreement with the argument canvassed on behalf of the plaintiff that, the plaintiff already having taken leave to prosecute the present suit, will not be required to go back to the company court for seeking leave to execute the decree to be passed by this court. That, however, cannot authorise the plaintiff to execute the decree in its entirety irrespective of the dividend to be paid by the official liquidator to the other creditors who are similarly placed. I would assume that the plaintiff's case is si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral assets held by the bank for distribution for winding up of bank. Even this decision is of no avail. In the present case, even if the plaintiffs claim is to be treated as similar to that of a secured creditor, it is obvious that the plaintiff will be entitled to receive such amount from the company in the same proportion as would be receivable by the other secured creditors similarly placed and subject to the preferential order stipulated by sections 529 and 529A of the Act. I am considering the claim of the plaintiff as similar to that of a secured creditor in view of the observations made by the Division Bench in the company petition while deciding the appeal arising out of the Company Petition No. 287 of 1979 filed by the plaintiff praying for winding up of the defendant- company. Till that order was passed, the status of the plaintiff was one of an unsecured creditor. However, the order passed by the Division Bench on February 5, 1980, directs the amount to be transferred, deposited by the defendant-company, to the present suit account, to be invested as security against the decree to be passed in the present suit. Notwithstanding that order, the amount deposited by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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