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TMI Blog2007 (6) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... as delayed for more than three days then the respondent-company was liable to pay customary interest at 18 per cent per annum on the delayed payment. The petitioner-firm purchased wheat for the respondent-company during the years 1994 to 1997 and sent the same to the respondent-company through trucks along with bills and bilties. The petitioner-firm obtained "LL" forms after deposit of the market fee and "E" forms for having deposited the fee in the market committee. The respondent-company continued to make part payments up to March 18, 1998. During the years 1994-95 and 1995-96, the respondent-company made all payments but in the year 1996-97 the respondent-company could not make complete payment and as on April 1, 1997, a sum of Rs. 5,25,476.28 (including customary interest) was outstanding towards it. This amount was paid by the respondent-company by April 26, 1997. In the year 1997, the petitioner-firm purchased and supplied to the respondent-company wheat valued at Rs. 34,27,719. The respondent-company could only make part payments. It is claimed that the respondent-company issued a confirmation certificate dated September 30, 1997 and confirmed credit balance of Rs. 5,51,716 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 72,647.00 72,798.00 87,325.00 No. Bill dated Quantity of wheat Amount Payments made Q.K. Rs. P. Dated Rs. P. 2145 25-06-97 122.05 62,224.00 2146 26-06-97 142.50 72,647.00 2147 26-06-97 121.60 61,909.00 2148 26-06-97 121.60 61,866.00 2149 27-06-97 199.50 1,01,641.00 2152 06-07-97 114.00 55,514.00 2158 17-07-97 123.60 64,331.00 2160 21-07-97 142.50 77,171.00 2161 21-07-97 142.50 77,053.00 2162 22-07-97 171.00 92,556.00 2163 23-07-97 101.65 54,959.00 2164 24-07-97 118.75 64,766.00 2165 24-07-97 118.75 64,981.00 2166 25-07-97 118.75 64,780.00 2172 28-07-97 133.95 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent-company. It has further been claimed that the petitioner-firm is also entitled to customary monthly interest at 18 per cent, per annum from July 1, 1999, till the date of realisation of the outstanding amount. On June 25, 1999, the petitioner-firm also sent a notice under section 434 of the Act demanding payment of Rs. 4,77,658 along with future customary monthly interest at 18 per cent, per annum from July 1, 1999, till the realisation of the amount due (P125). The notice was duly received by the respondents but no reply was given. In response to the notice of motion having been issued to the respondents, preliminary objections were filed on behalf of the respondent-company on January 13, 2000. It was, inter alia, pleaded that the company petition is not bona fide and has been filed merely to exert undue pressure and to use it as a tool and pressure tactics for recovery of the alleged amount, which according to the respondent-company is not due and payable to the petitioner-firm. It has been asserted that the control of the respondent-company was earlier held by late Shri Murari Lal, late Shri Anil Kumar Garg and Smt. Minal Garg. It has been admitted that the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nary objections specifically controverting the stand taken by the respondent-company that the petitioner-firm was also part and parcel of the alleged committee of creditors, which was formed. It has been denied that any committee of creditors was constituted. The petitioner-firm has further denied that it has ever accepted the amount of Rs. 3,00,000 as full or final settlement of its claim out of Rs. 5,51,716. It has been disclosed that the respondent-company had lastly made payment of Rs. 2,99,550 (3,00,000) only by way of demand draft not in pursuance to settlement but as a part-payment. However, the said demand draft was not honoured by the bank on the pretext that the same was stolen. The petitioner-firm received the aforementioned amount through court on March 28, 1998. The other averments of the preliminary objections were also denied and that of petition were reiterated. On September 6, 2001, a supplementary affidavit was filed on behalf of the respondent-company as further reply to the petition in which almost same averments were made as were contained in the earlier preliminary objections. This time order of the Company Law Board, dated February 2, 1998 (respondent No. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal affidavit, dated September 6, 2001 (annexures R2 and R3) do not show that the same were accepted by the petitioner-firm. There are no signatures on either of the documents by the partners of the petitioner-firm or any one authorised by it. It is also pertinent to mention that the documents annexures R2 and R3 have also shown the name of Munshi Ram Om Parkash who have filed connected C.P. No. 287 of 1999, with a prayer for winding up of the respondent-company. Had these documents been authentic then the same would have been produced in C.P. No. 287 of 1999 also. The aforementioned petition was admitted and an amount of Rs. 10,14,486.92, which was found to be the principal amount due, was paid to M/s. Munshi Ram Om Parkash in the court. The dispute with regard to interest has also been decided, by a separate order of even date. Therefore, the reliance of the respondent-company on documents annexures R2 and R3 is wholly misplaced. Moreover, the petitioner-firm had to file a suit for mandatory injunction seeking encashment of demand draft No. 654282, dated March 18, 1998, in which averments have been made that the aforementioned demand draft was issued by the respondent-company in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent, per annum on the delayed payment as on March 28, 1998. Therefore, interest from March 28, 1998, till date is also payable and now the question which is to be determined is in respect of rate of interest. Dr. Surya Parkash, learned counsel for the petitioner-firm has argued that it was orally settled between the parties that if the payment of wheat was delayed for more than three days then the respondent-company was liable to pay customary interest at 18 per cent, per annum on the delayed payment. In order to substantiate its claim that the respondent-company used to pay interest at 18 per cent, per annum, C.A. No. 846 of 2006 has been filed by the petitioner-firm to place on record a copy of the certificate of deduction of tax at source under section 203 of the Income-tax Act, 1961 (P123). A perusal of the aforementioned certificate of deduction of tax at source shows that an amount of Rs. 13,30,000 has been shown credited as on March 31, 1997 and an amount of Rs. 13,000 has been shown as deduction at source. On the basis of the aforementioned document, learned counsel has submitted that the rate of interest as agreed between the parties was paid. He has then referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 287 of 1999, to show that the respondent-company had never conceded the rate of interest of 18 per cent, and it had only agreed to pay the rate of interest as per the usage of the mandi. Learned counsel for the respondent-company has then submitted that the petitioner-firm has not pleaded any agreement with regard to mutual settlement of the rate of interest. Mr. Chetan Mittal, learned counsel for the respondent-company has then submitted that in any case the rate of interest should not be more than prime lending rate because as per the facts and circumstances of this case the interest at 18 per cent, per annum cannot be charged. In that regard he has referred to the sudden death of Shri Murari Lal on September 19, 1997, followed by the death of his son Shri Anil Kumar Garg on October 7, 1997, which resulted in complete setback to the business of the respondent-company. He has also raised a preliminary objection asserting that a petition under section 433( e ) of the Act for claim of interest is not maintainable. In support of his submission, he has placed reliance on two Division Bench judgments of the Karnataka High Court in the cases of Smt. Nagaveni Bhat v. Canara Leasing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to take a realistic view of the whole situation in awarding the rate of interest. There is indication in the subsequent events showing that the settlement on March 31, 1998, was reached and a large number of creditors settled their total dues by accepting 50 per cent, of the same. Therefore there is ample evidence on record to show that the respondent-company went into a deep financial crisis on account of two sudden deaths and then change of management. It has been rescued by acts of good management on the part of all concerned. These circumstances cannot be kept out of view while deciding the rate of interest. Applying the principle that the rate of interest should be decided in accordance with the facts of a particular case, as laid down by the hon ble the Supreme Court in the case of Aditya Mass Communications (P.) Ltd. v. A.P.S.R.T.G, AIR 2003 SC 3411, I deem it just and appropriate to award interest at 12 per cent, per annum from March 28, 1998, till date on the total amount of Rs. 2,51,716. The argument of learned counsel for the respondent-company that no petition under sections 433 and 439 for realising interest from the respondent-company would be maintainable has t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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