Punjab-Haryana High Court
Jamna Auto Industries Ltd. vs Modern Steel Ltd. on 20 July, 2000
Equivalent citations: [2001]104COMPCAS296(P&H)
Author: Bakhshish Kaur
Bench: Bakhshish Kaur, Swatanter Kumar
JUDGMENT Bakhshish Kaur, J.
1. The appellant has filed this company appeal under section 483 of the Companies Act, 1956, for setting aside the order dated March 24, 2000, passed by the learned judge in Company Petition No. 296 of 1998.
2. Modern Steel Ltd., manufacturers of iron and steel billets/ingots and rolled products, filed a petition under section 433 read with section 434 of the Act seeking winding up of the appellant-company on the averments that Jamna Auto Industries Ltd., had purchased material from it and a sum of Rs. 27,30,353 became due. Since the amount was not paid, therefore, interest at the rate of 18 per cent. per annum was levied on the outstanding amount.
3. The appellant's case is that there was no contract between the parties for payment of interest and in the absence of any contract, the appellant is not liable to pay it. Thus, the company court has erred in entertaining the petition for winding up of the appellant-company when there is a bona fide dispute between the parties as to the payment of interest.
4. We have heard Shri Ajai Lamba, learned counsel for the appellant-company.
5. Mr. Ajai Lamba has tried to convince us that a company court is not empowered to decide and award the rate of interest payable in a business transaction when the parties are not ad idem. Secondly, the petition for winding up cannot be used as a mode of recovery as it is a case of recovery of outstanding dues. Thirdly, there was no contract between the parties to pay the interest. Therefore, on these grounds, the impugned order is liable to be set aside.
6. We have given a careful consideration to the submissions made by Shri Ajai Lamba. We have not felt convinced of the submissions made by learned counsel. In fact, this appeal is misconceived. The main dispute which was raised before the company court is liability of the appellant to pay interest. It has been observed by the learned judge that the appellant is rather estopped from raising objection by his own acts and conduct because by order dated May 8, 1998, annexure P-9, the appellant had requested the respondents not to insist upon payment of interest. Similarly, in the proposal annexure P-5 and also in the preliminary objections to the written statement, the appellant has pleaded as under :
"While the answering the respondent had suggested a credit of 60 days and if delay in payment is beyond 60 days, interest at prevailing bank rate would be paid while the petitioner was asking for exorbitant rate of interest which was never agreed upon."
7. The observations made by the learned judge are sufficient to disentitle the appellant from the relief claimed by him in this appeal. It reads as under :
"At that rate, the respondent was willing to pay the interest, it has also been requesting the petitioner-company not to charge the interest. Therefore, it does not lie in the mouth of the respondent-company that no interest is payable. As per admission of the respondent-company, it is liable to pay interest at the bank rate which is 18 per cent. per annum. That would be admitted rate to be calculated at the rate of 18 per cent. per annum."
8. The learned company judge has found it as a matter of fact based on evidence on record that there was no dispute to the receipt of the goods and utilisation thereof. Obviously the principal amount was not in dispute. It cannot be disputed that it is a commercial transaction. There could be an oral contract even in regard to payment of interest. In para. 9 of the petition the petitioner had specifically referred to their notice under sections 433 and 434 of the Companies Act dated September 2, 1998, wherein they had claimed interest at the rate of 25 per cent. with effect from July 1, 1998, till the date of payment. In the written statement filed on behalf of the company, receipt of the notice was not disputed. Rather it was stated that under postal certificate they had sent reply of the notice asking for accounts. The copy of the reply was not filed on the record of the company court. It was for the respondent-company to dispute its liability and specifically plead in reply to the notice that no interest or lesser interest was payable. This fact the respondent-company in response to the statutory notice read in the light of the above circumstances compels us to hold that the defence taken by the company now is not worthy of any credence. The respondent-company would be deemed to have admitted the rate of interest and would be bound by its own admission.
9. The present petition cannot be termed as a petition for suit of recovery simpliciter. The petition has been filed in consonance with the statutory provisions of the Companies Act and after serving the notice required under law. The company court has formed an opinion that the company was unable to pay its debts without any plausible cause and rightly so.
10. In view of the above, we do not find patent error of law.
11. Dismissed.