Punjab-Haryana High Court
Delhi Cloth & General Mills Co. Ltd. vs Stepan Chemicals Limited on 27 September, 1984
Equivalent citations: [1986]60COMPCAS1046(P&H)
JUDGMENT Rajendra Nath Mittal, J.
1. Briefly the facts are that the petitioner supplied goods of the value of Rs. 1,52,708 to the respondent from November 28, 1979, till June 25, 1980. The respondent did not make the payment of the bills. Consequently, the petitioner moved an application for winding-up of the respondent on July 24, 1982. The respondent filed a reply in which the liability was admitted. Thereafter, the respondent paid some amounts on different hearings. On April 1, 1983, it was agreed between counsel that the respondent would pay the principal amount in instalments of Rs. 10,000 each. The first instalment would be paid by April 15, 1983, and subsequent instalments by 15th of each month. Regarding interest, it was agreed that the respondent would discuss the matter with the general manager of the petitioner. Thereafter, the respondent paid the principal amount. However, it did not pay any interest nor the general manager of the respondent discussed the matter regarding the interest with the petitioner. Consequently, counsel for the petitioner has prayed that as the respondent has not paid the interest, the petition be ordered to be advertised. The case was adjourned on August 23, 1984, for arguments to September 6, 1984. On September 4, 1984, C. A. No. 142 of 1984 was filed by the respondent, inter alia, stating that the principal amount had been paid and the amount of interest was disputed by the respondent. It is further stated that the respondent was willing to furnish security for the amount claimed as interest by the petitioner who should be directed to establish its claim by way of a civil suit.
2. The only question that arises for determination is as to whether an order of winding-up can be passed if after filing of the petition under section 439 of the Companies Act, the respondent pays the principal amount during the pendency of the petition but refuses to pay the interest. It is not necessary to elaborate the point as the matter stands concluded by a judgment of the Division Bench of this court in Company Appeal No. 16 of 1984, Stephen Chemical Ltd. v. Innosearch Ltd. [1986] 60 Comp Cas 702 (P & H) decided on July 25, 1984. In that case, Messrs Stephen Chemical Ltd., respondent, in similar circumstances, raised a dispute that the petitioner was not entitled to claim interest after the principal had been paid. I, after hearing learned counsel, granted interest at the rate of 12 percent. per annum to the petitioner-company, i.e., Messrs Innosearch Ltd. Messrs Stephen Chemical Ltd., having felt aggrieved, went up in appeal. The learned Division Bench held (at p. 704):
"...where the company judge was seized of the matter and when the liability to pay the principal debt had not been disputed by the company sought to be wound-up and, in fact, paid up the debt in order to avoid winding-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. The basic policy of law is to avoid multiplicity of litigation."
3. In the abovesaid circumstances, I am of the opinion that if after filing of the petition under section 439 of the Act, the petitioner pays the principal amount during the pendency of the petition but does not pay the interest, the company can be ordered to be wound up.
4. A dispute has been raised on behalf of the respondent that it is not liable to pay interest. The petitioner supplied the goods, vide invoices F-1 to F-6 and under the invoices it is mentioned that if the amount is not paid before a particular date, the respondent would be liable to pay interest at the rate of 19'5 per cent. per annum. The goods were accepted by the respondent and it did not raise an objection regarding the said clause. Otherwise also from the general custom of the trade, the purchaser is liable to pay the interest in case the price of the goods is not paid within a reasonable time. It is common knowledge that the bank rate has gone up very high. In the circumstances, I hold that the petitioner is entitled to interest at the rate of 12 per cent per annum till the date of payment. If the respondent fails to pay the amount of interest within a period of one month, the petition shall be advertised in the Indian Express, Chandigarh, Punjab Tribune and the Punjab Government Gazette. Adjourned to November 22, 1984.
5. C. A. No. 142 of 1984 is disposed of accordingly.