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TMI Blog2016 (8) TMI 872X X X X Extracts X X X X X X X X Extracts X X X X ..... tten agreement for the loan advanced by the petitioner to the respondent company was executed. But against the said advance of Rs. 1.41 crores, respondent company had paid only a sum of Rs. 65.50 lakhs and thus, the balance sum of Rs. 75.50 lakhs remained outstanding which was duly reflected in the books of account of the respondent company and despite service of legal notice under S. 434 of the Act by the petitioner vide Annexure G dated 20.9.2013 calling upon the respondent company to pay the balance amount of Rs. 75.50 lakhs along with interest at the rate of 24% p.a., the outstanding dues were not cleared by the company and the company therefore, deserves to be wound up under S. 433 (e) read with S. 439 of the Act. 3. The respondent company replied to the said statutory notice vide Annexure H dated 15.10.2013 and while denying its liability to pay the said amount of Rs. 75.50 lakhs, the respondent company through its advocate, gave the following reply and the relevant extract of which is quoted below for ready reference: "Our Client instructs us to state that, your client has not properly instructed to you and therefore you have issued this notice without ascertaining factual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , handed over the keys of North Block to one M/s. Cimec Enterprises and set up M/s. Cimec Enterprises to institute a suit in OS 3290/2009. Thereafter the Hon'ble Company law Board passed an order dated 30.7.2009 dismissing the Company Petition 494/2008 filed by your client. Being aggrieved by the said order, your client preferred an appeal in Comp.Appeal 12/2009 before the Hon'ble High Court of Karnataka, challenging order dated 30.7.2009, passed in Company Petition 494/2008. The Hon'ble High Court of Karnataka by order dated 20.10.2009 dismissed the Company Appeal 12/2009 with cots, confirming order dated 30.7.2009 passed by the Hon'ble Company Law Board in Company Petition 494/2008. Our client instructs us to state that your client is the reason for depriving our client from running the hotel business in North Block premises. Your client's action of committing illegalities further continued. Your client with an ulterior motive created documents against the interest of the company and also misused seal of the Company against the interest of our client. To deprive our client to carry on its business in North Block premises, your client fabricated an alleged work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent that there is a possibility of settlement if there is a concession shown by the petitioner, therefore, the matter was referred to the Mediation Centre at Bangalore. However, on 27.11.2015, it was recorded that the mediation talks have failed but the respondent company expressed its readiness and willingness to pay the amount claimed in the statutory notice on installment basis and a sum of Rs. 10,50,000/- was thus assured to be paid on the next date of hearing. On 4.12.2015, the said sum of Rs. 10,50,000/- was paid and the balance amount of Rs. 65 lakhs was assured to be paid in ten equal monthly installments and therefore, the case was adjourned. Learned counsel for the petitioner submitted that thus, in installments the entire amount of principal amount due of Rs. 75,50,000/- was paid by the respondent company during the pendency of this winding up petition. However, thereafter, the respondent company has stopped payment of the remaining part of the debt, viz., the interest claimed by the petitioner at the rate of 24% p.a. and on account of the failure to pay the interest part of the debt of the petitioner, the company petition deserves to be admitted now and advertised, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany and the demand of such interest at an abnormally high rate of interest of 24% p.a. was raised, for the first time only in the legal notice served by the petitioner's Advocate vide Annexure G dated 20.9.2013. He also drew the attention of the Court to para 6.59 of the Company Petition 9/2012 filed by the present petitioner before the Company law Board vide Annexure R7 in which, when a cheque for Rs. 2.50 lakhs dated 18.6.2011 was offered to the petitioner in part repayment of his loan, but he did not encash the same and on the contrary, raised it as a ground of oppression against the respondent company. Learned counsel for respondent company, therefore, urged that even if the liability of interest could be assumed against the petitioner, while denying the same, such a liability ceased after the said date of 18.6.2011 when the payment was offered to the petitioner, it ceased to so exist. He also submitted that even the payment in installments made by the respondent company during the pendency of this winding up petition has been adjusted by the petitioner only against his claim of principal amount of Rs. 75.50 lakhs and not against the interest claimed by him now and theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d one need not multiply such authorities except by making a brief reference to para 25 of the recent judgment in the case of IBA Health (India) (P.) Ltd. (supra) referred by the learned counsel for respondent, which would be enough to support the said proposition. The said para 25 reads as under: "An examination of the company's solvency may be a useful aid in determining whether the refusal to pay debt is a result of a bonafide dispute as to the liability or whether it reflects an inability to pay. Of course, it there is no dispute as to the company's liability, it is difficult to hold that the company should be able to pay the debt merely by proving that it is able to pay the debts. If the debt is an undisputedly owing, then it should be paid. If the company refuses to pay, without good reason, it should not be able to avoid the statutory demand by proving, at the statutory demand stage, that it is solvent. In other words, commercial solvency can be seen as relevant as to whether there was a dispute as to the debt, not as a ground in itself, that means it cannot be characterized as a stand alone ground." 10. A learned Single Judge of this Court (Hon'ble R V Raveendr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st is payable. While it may be open to the petitioner to establish a claim for interest in a civil suit, under S. 61(2)(a) of the Sale of Goods Act and/or S. 3 of the Interest Act, I am satisfied that the petitioner has not made out any admitted or undisputed liability to pay interest, in these proceedings. Having regard to the fact that the respondent has paid the entire principal amount during the pendency of this petition and thereby established its financial and commercial solvency and in view of the bonafide dispute regarding interest, there is no liability to pay any debt and consequently this petition for winding up is dismissed." This Court respectfully agrees and endorses the view taken by the learned Single Judge in the case of Jyoti Ltd. (supra). 11. This Court finds it difficult to agree with the view expressed by the learned Single Judge of Delhi High Court in the case of Devendra Kumar Jain (supra) wherein the Delhi High Court held that, relegating the creditor petitioner to avail the remedy by way of a civil suit, without determination of the liability towards interest on the debts, would multiply the litigation and therefore, the company court sitting in a windin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was either agreed upon or admitted or decreed by a competent court, the amount did not become a debt. The learned Judge came to the conclusion on the facts of that case that the amount claimed as interest had yet to be established as a debt inspite of the fact that the principal amount was paid in the proceedings for winding up initiated by the creditor. In the present case the petitioner has specified the balance amount payable by the company and specified the rate of interest at 18% p.a. Due dates when the balance price of the goods was payable have also been specified. The rest is a matter of mathematical calculation and the petition for winding up cannot be dismissed on the ground that mathematical calculation as to the amount of interest have not been stated. The exact amount of interest payable is likely to change depending upon the time when the payment of the principal amount is made. The court in its discretion, on consideration of all the facts and circumstances of the case and the financial market conditions, in the absence of agreement as to rate of interest between the parties, can award a reasonable rate of interest. There may not be a specific contract for payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ific contract, the winding up proceedings is not only the least suited but an absolutely ill-suited remedy, in the considered opinion of this Court. Since the principal loan itself has been disputed and denied by the respondent company in the present case, the mere fact that it had to pay the same under the threat of winding up petition being pending in this Court, does not convert an un-admitted and disputed liability into an admitted one. On the contrary, there is ample material on record to indicate that the present petitioner was hell bent upon coercing the respondent company to cough up whatever he has demanded from the respondent company and one after the another, several legal proceedings have been initiated by him against the respondent company. It is also worthy to note that this Court in Company Application 12/2009 under S. 10 F of the Act filed by the same petitioner against the respondent company itself, in a matter arising against transfer of shares under S. 111 of the Companies Act, dismissed the said company application of the present petitioner with costs of Rs. 6,000/- with the following observations: "There is a great distinction between the first appellant being ..... X X X X Extracts X X X X X X X X Extracts X X X X
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