Punjab-Haryana High Court
Sbi Mutual Fund vs Vikas Wsp Ltd. on 23 February, 2006
Equivalent citations: [2006]133COMPCAS542(P&H), (2006)146PLR636, [2006]71SCL368(PUNJ&HAR)
Author: Hemant Gupta
Bench: Hemant Gupta
JUDGMENT Hemant Gupta, J.
1. The present petition for winding up under Section 433(e) and (f) read with 434 and 439 of the Companies Act, 1956 (hereinafter to be referred as "the Act") is by a Trust set up by the State Bank of India, a bank constituted under the State Bank of India Act, 1955. The petitioner conduct the business of Mutual Fund by promoting the savings of small and individual investors through various schemes inviting subscriptions from prospective investors and to channalise the funds so collected into the capital market for attractive returns.
The respondent company is a public limited company by shares, the authorised capital of which is Rs. 12,75,00,000/-.
2. The grievance of the petitioner is that the respondent company after having declared dividend for the financial year 2000-2001 has failed to remit the same to the petitioner. The dividend payable to the petitioner was Rs. 35,52,882.50 on the record dated i.e. 2.6.2001. The said dividend is a debt due, and payable by the respondent to the petitioner and, thus, the respondent company is liable to be wound up.
3. Though the respondent company has raised a number of pleas in the written statement but it is admitted that the said amount of dividend has been paid to the petitioner in three installments during the pendency of the present petition. A sum of Rs. 73,000/- was paid on 25.9.2003, a sum of Rs. 5,50,000/- was paid on 16.6.2004; and a sum of Rs. 29,29,883/- was paid in February, 2005. In view of the said payment, the only dispute surviving is liability of payment of interest on the said amount. According to the petitioner, in terms of Section 205-A of the Act, the respondent company is required to pay dividend within 30 days of its declaration. If for any reason, such dividend remains unpaid, the same is to be deposited by the company in a separate account within next seven days. It is contemplated under Sub-section (4) of Section 205-A of the Act that if the amount is not paid, the company is liable to pay interest at the rate of twelve per cent per annum for the period "of default in making the deposit. The respondent company has failed to pay dividend for more than three years and, in fact, the entire payment has been made during the pendency of the present petition. Therefore, the respondent company is liable to pay interest at the rate of 12% per annum for the period the amount of dividend remained unpaid.
4. Learned Counsel for the petitioner has relied upon a Division Bench decision of this Court reported as Stephen Chemical Ltd. v. Innosearch Ltd. (1993)1 Company Law Journal 195, wherein the company has paid the principal amount of debt to the creditor after winding up proceedings have been initiated before the Company Judge. It was held that where the Company Judge is seized of the matter and when the liability to pay the principal debt has not been disputed by the company sought to be wound up, the forum of the Company Judge is the appropriate forum for determining as to whether the creditor was entitled to interest on the amount in question or not. Still further, reliance is also placed upon a decision of Division Bench of this Court report as Stephen Chemicals Ltd. v. Delhi Cloth & General Mills Company Ltd. (1985)1 Company Law Journal 359, wherein it has been held that it cannot be held that the dispute about the payment of interest is bona fide.
5. On the other hand, learned Counsel for the respondent has relied upon General Assurance Society Limited v. Life Insurance Corporation of India , to contend that the dividends declared entitles the shareholder to sue at law and the declaration does not make the company a trustee of the dividend for the shareholder. Thus, declaration of dividend becomes a debt. The petitioner is perfectly justified in law in seeking winding up of respondent company for non-payment of debt due to the petitioner. Since debt has been paid during the pendency of winding up proceedings, the question is whether the petitioner is entitled to interest thereon.
6. Learned Counsel for the respondent has relied upon Shakti Prakash Metal Finishers Pvt. Ltd. v. Hindustan Machine Tools Limited and Anr. (2002)108 Company Cases 310; Multimetals Limited v. Suryatronics Pvt. Ltd. (1997)89 Company Cases 259; and Bombay Glass Blowing Industries v. Bio Vaccines Pvt. Ltd. (1999)98 Company Cases 174, to contend that for payment of interest, respondent company cannot be ordered to be wound up. However, the said judgments are not applicable to the facts of the present case. Firstly, though the respondent alleged in the written statement that the dividend voucher was dispatched but in the additional affidavit took up a stand that the original dividend warrant is feared to have been burnt in respect of Rs. 29,29,883/-. Apart from the fact that the stand is contradictory, it is apparent that the respondent company has not disputed the liability to pay the dividend. The affidavit dated 27.10.2004 does not show that the amount of unpaid dividend or claimed was deposited in a special account. What is pleaded is that the amount was deposited in the special account known as "Unpaid Dividend Account" in the form of "Current Account". However, the respondent has not even disclosed the name of the bank, account number or produced any account statement of the said account. Thus, it is apparent that the respondent company has not complied with the requirement of Section 205-A of the Act and, therefore, on account of default, the respondent company is liable to pay interest at the rate of 12 per cent per annum from the date of such default.
7. Therefore, I am satisfied that the respondent company is unable to satisfy the debt due and payable to the petitioner company and, thus, the petition is liable to be admitted. Faced with the situation, learned Counsel for the respondent sought time to make the payment of interest now, provided interest calculation is communicated by the petitioner. Learned Counsel for the petitioner states that the petitioner shall communicate the interest due and payable by the respondent company within a week from today. Learned Counsel for the respondent company has undertaken to make payment of interest on or before 30.6.2006 in one or more installments.
8. Adjourned/to 13.7.2006 for further orders.