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Aar Bee Enterprises (Prop.Aar Bee Containers P. Limited.) v. Gyan Securtiy Press Limited - COMPANY PETITION No. 41 of 2000  RD-AH 4856 (26 October 2005)
Companies Act 1956-winding up- creditors winding up petition. Principle amount paid during the pendency of proceedings- No agreement on rate of interest. The proceedings may not continue, as the Company cannot be wound up for non payment of disputed interest.
Court No. 9.
Company Petition No. 41 of 2000.
AAR BEE Enterprises Pvt. Ltd. ... Petitioner
Gyan Security Press Ltd. ... Respondents.
Hon. Sunil Ambwani, J.
Heard Sri Piyush Agarwal, learned counsel for petitioner. No one appears for the respondents.
This creditors winding up petition was filed, after giving notice under section 434(1)(a) of the Companies Act, 1956, for non payment of Rs. 2,64,096.61 towards the supplies of 15 Kg. Ghee tin containers. In the notice dated 28.3.2000, the petitioner company also demanded 9% interest.
During the pendency of the winding up petition, the respondent company has paid the entire amount due towards the supply of the tin containers. The payments were made on 12.4.2002. According to the learned counsel for the petitioner now only the interest which has been compounded and calculated at Rs.2,08,990/ in its application No. 77941 of 2002 filed on 25.4.2002, is due from the respondent company. In para 16 of the Counter Affidavit , the respondent company has denied the liability and the rate of interest.
There is nothing on record to show that the respondent company had agreed to pay any rate of interest on any delay in payment of the amount for the material supplied, by the respondent company. No such contract custom or law has been pleaded or established by the petitioner-company.
There is no agreed rate of interest on the default in payment. Sri Piyush Agarwal has relied upon the Division Bench of Punjab and Haryana High Court in Stephen Chemical Limited Vs. Innosearch Limited reported in 1986(60) Company Cases, 702. In this case, the Punjab and Haryana High Court distinguished the judgment in Amalgamated Commercial Traders (P) Ltd. Vs. Krishnaswamy (A.C.K.) (1965) 35 Com. Cases 456 (SC), as well
as the judgment in Unisystems (P) Ltd. Vs. Stepan Chemical Ltd. (1985) 58 Com. Cases 875 ( P & H) wherein a Single Judge of Punjab & Haryana High Court observed that where no agreement for payment of interest existed and the creditors had claimed interest, no winding up order could be passed. The Division Bench of the Punjab & Haryana High Court was of the opinion that in order to avoid multiplicity of litigation in the matter where principal amount is paid during the pendency of the winding up petition, the Company Petition should not be dismissed with a direction to the petitioner company to claim interest in civil suit.
I respectfully disagree with the view taken by the Punjab & Haryana High Court. A company petition may not be allowed to continue and the respondent-company called upon to pay and in default be wound up on the ground that it has not paid the interest for which there is no agreement, pleaded or proved on record. The payment of interest on the principal amount is subject matter of agreement between the parties. In the absence of the contract under Section 34 of the Code of Civil Procedure, the Court may while passing of decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged from the date of suit to the date of decree. The Company petition cannot be treated to be a suit for recovery of the amount. A Company cannot be wound up unless the conditions precedent in section 433 of the Companies Act, 1956 are found to be established. The reasonable rate of interest has to be adjudicated by the Court. The winding up petition is not forum to decide such disputed questions.
In the facts and circumstances the company petition is dismissed with liberty to the petitioner to file civil suit for claim of reasonable interest, if any, due from the respondent company.
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