TMI Blog1988 (2) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent to pay the same. It issued a notice through a lawyer on December 8, 1982, and the notice is marked as exhibit P-45. In that notice, it had not only demanded the payment of the principal, but also the payment of interest at the rate of 18 per cent, per annum. There was no reply to the notice by the respondent. Thereafter, there was correspondence between the parties. On the one hand, the petitioner was demanding payment of money due to it; and on the other, the respondent was repeatedly assuring the petitioner that it will settle the accounts shortly. Ultimately, a telegram was sent by the petitioner on November 1, 1985, demanding payment of principal and interest. Finding that it did not produce the desired result, the petitioner filed the company petition as stated above for winding-up the respondent company. The respondent, while admitting that the principal amount was due, was raising a dispute with regard to its liability to pay interest thereon. During the pendency of the petition, the respondent made payments as follows: Rs. 1. 7-1-1986 10,000 2. 6-2-1986 10,000 3. 19-2-1986 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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. Learned counsel for the appellant also referred us to the order of Goyal J. in Unisystems ( P. ) Ltd. v. Stepan Chemical Ltd. [1985] 58 Comp. Cas. 875 (P. H.), wherein Goyal J. had observed that where no agreement for the payment of interest existed, and the creditor had claimed interest, no winding-up order could be passed. With respect, if the said observations are intended to cover cases of the present kind, we find ourselves unable to concur with that view. The said observations may be correctly applicable to a case where winding up initially is sought by a party on the ground that a certain amount by way of interest due to one from the other party which the other party had failed to pay up despite demand notice, and the other party raises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt or advanced by nationalised banks in relation to commercial transactions". It is, therefore, submitted by learned counsel for the petitioner that interest could be awarded at the rate prescribed in the Interest. Act up to the date of the filing of the petition and at the rate prescribed by the Code of Civil Procedure after the date of the filing of the petition till the date of payment. As against this, learned counsel for the respondent relies upon the decision of the Karnataka High Court in Southern Industrial Polymers ( P. ) Ltd. v. Amar Formulators and Electronics ( P. ) Ltd. [1984] 56 Comp. Cas. 77. In that case, the respondent therein had certain transactions with the petitioner-company; and in respect of those transactions, the respondent-company was due and payable to the petitioner a sum of Rs. 2,69,308.38 as on March 31, 1981. When the petition for winding-up was filed on September 10, 1981, the claim was raised to Rs. 2,96,736.62. After the presentation of the petition, there was an agreement between the parties in a meeting held on November 10, 1981, by which it was agreed that a sum of Rs. 3,16,072.37 should be paid by the respondent to the petitioner- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 80 of the Negotiable Instruments Act, 1881, when no rate of interest is specified in the promissory note or bill of exchange, and the court may award interest at the rate of 6 per cent, per annum. The above decision was rendered long prior to the amendment of the Civil Procedure Code in 1976. That case does not help the respondent to contend that it has no liability to pay interest. If at all, it could rely on that decision only for the purpose of contending that the rate of interest should be fixed at 6 per cent. In view of the law as it then existed, the Supreme Court held that the rate of interest should be 6 per cent. The law has since changed. Learned counsel for the respondent has cited another decision of the Supreme Court in Hirachand Kothari v. State of Rajasthan, AIR 1985 SC 998. In that case, the Supreme Court had to consider the powers of court to award interest on equitable grounds on the compensation awarded. The court held that interest should be awarded on the compensation granted from the date of dispossession till the date of judgment of the trial court at 6 per cent, and, thereafter, at 9 per cent, till realisation. We do not see how this decision w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut already, there is no material on record to show that the prevailing rate of interest payable on bank deposits is 18 per cent, per annum. While the Interest Act refers to the interest payable on deposits in scheduled banks, the Civil Procedure Code refers to the rate of interest charged by banks on loans advanced. This is not a proceeding for recovery of money as such. This is only a proceeding for winding up the company. In the exercise of our equitable jurisdiction, we are directing the respondent-company to pay to the petitioner the amount due with interest thereon in order to avoid winding-up of the company. Hence, we consider that the interests of justice require fixation of rate of interest at 12 per cent, per annum as stated above. Learned counsel for the respondent contended that the court should not fix more than 6 per cent. He relied, upon the decision of the Supreme Court in Hirachand Kothari v. State of Rajasthan, AIR 1985 SC 998, in support of that propostion. We have already referred to that decision and we find that that decision does not lay down any principle of law that interest granted by the court should not exceed 6 per cent, per annum. Hence, we reject ..... X X X X Extracts X X X X X X X X Extracts X X X X
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