9911796707
TMI Blog2008 (9) TMI 574X X X X Extracts X X X X X X X X Extracts X X X X ..... companies, of certain rubber products to the M/s. Stanes Tyre and Rubber Products Ltd. (hereinafter called "the company") were not paid the contracted sums for the goods delivered and after statutory notices filed the applications for winding up under section 433( e ) read with sections 434(1) and 439 of the Companies Act, 1956. During the pendency of the petitions, the company paid the principal amounts due under the contracts but did not pay the interest component as demanded by the petitioners. The company denied its liability to pay interest but the learned judge while disposing of the petitions passed orders thus : "11. Now it is admitted by both the parties that after filing of the above company petition the principal outstanding amount alone was paid by the respondent-company and the interest accrued on the principal amount is still due and payable by the respondent-company. 12. The letter dated April 11, 2001, sent by M/s. Tolin Rubber P. Ltd., to the respondent-company and the letter dated April 16, 2001, sent by the respondent-company will make it very clear that the respondent has to make the payments within 90 days from the date of receipt of the materials and in su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt held that when there was a dispute as regards a huge component of Rs. 13.50 crores against a principal of Rs. 4.5 crore and a civil suit was also pending; and a genuine dispute existed for pendente lite interest, there was no-justification for winding up of the company. This, the court did after-a finding that the company was in a position to pay its debts. IV. Contentions by the respondent : 4. Although the original invoices made no mention of the payment of interest, when the company did not pay the amounts for the supplies effected, the petitioners had issued notices on April 11, 2001 arid April 16, 2001, requiring the company to make the payments within 90 days (emphasis 1 supplied) from the date of receipt of materials. He relied on a Division Bench decision of the Calcutta High Court in Rydak Syndicate Ltd. v. Roshanlal Agarwal [2007] 139 Comp Cas 814 where the company court had admitted a winding up petition and directed the payment of principal with interest from the date of service of statutory notice. According to him, the non-payment of interest was unjustified and the company court had jurisdiction to award such interest also as a condition to ward off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings, unless the court is satisfied that there are special reason why no interest should be given in respect of those damages. (3) Nothing in this section, ( a )shall apply in relation to ( i )any debt or damages upon which interest is payable as of right, by virtue of any agreement ; or ( ii )any debt or damages upon which payment of interest is barred, by virtue of an express agreement; ( b )shall affect ( i )the compensation recoverable for the dishonour of a bill of exchange, promissory note or cheque, as defined in Negotiable Instruments Act, 1881 ; or ( ii )the provisions of rule 2 of Order II of the First Schedule to the Code of Civil Procedure, 1908 ; ( c )shall empower the court to award interest upon interest." 6. Although the interest could well be a part of liability and hence included in the debt, the Act makes a dichotomy between a "debt" and so called "interest" for the purpose of the Act. The reading of the section (particularly, section 3(3)) makes it clear that the section is not attracted in relation to a debt where interest is payable as of right or in cases where there is an express bar under a particular agreement to pay interest. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents of the principal sum alone in six instalments between February 28, 2003 and December 3, 2004, that is, during the pendency of the proceedings. The interest component alone is denied. In a case, where the company court comes to the conclusion on appreciation of all relevant facts, there exists a debt due by the company and that it is unable to repay the same, by the application of the relevant tests laid down in the decisions referred to above, it would be justified in ordering winding up. The question is whether there exist circumstances that legally justify the order for winding up. 9. Here, the invoices do not refer to any date before which the amount shall be paid or whether the interest will be collected. Therefore, it is the second contingency that arises of a situation when the liability is cast by a demand, which is not expressly barred by the agreement. Admittedly, the notice had been issued, referring to the time for payment for the goods supplied to arise within 60 days and more importantly demanding interest at 18 per cent, per annum. The fact that the original invoice does not stipulate interest is irrelevant. If it does, there is no question of invoking the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
