TMI Blog2016 (8) TMI 872X X X X Extracts X X X X X X X X Extracts X X X X ..... of the respondent company on account of the alleged failure to pay interest at 24% p.a. on the admitted liability of ₹ 75.50 lakhs due by the respondent company to the petitioner, against the loan advanced by the petitioner to the respondent company. 2. The case set up by the petitioner in the present petition is that the petitioner Director advanced a sum of ₹ 1,41,00,000/- to the respondent company to square up the outstanding dues of Andhra Bank which had initiated action against the respondent company under the Securitization Reconstruction of Financial Assets Enforcement of Security Interest Act, 2002 claiming a sum of ₹ 2,64,69,938/- and no written agreement for the loan advanced by the petitioner to the respondent company was executed. But against the said advance of ₹ 1.41 crores, respondent company had paid only a sum of ₹ 65.50 lakhs and thus, the balance sum of ₹ 75.50 lakhs remained outstanding which was duly reflected in the books of account of the respondent company and despite service of legal notice under S. 434 of the Act by the petitioner vide Annexure G dated 20.9.2013 calling upon the respondent company to pay the balan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allow our client to generate the revenue to repay the loan to the financial institution viz., Andhra Bank. An application in CA 13/2009 was filed before the Company Law Board seeking an order to reopen the North Block premises belonging to our company which consists of 60 lodging rooms. After hearing the parties, the Hon'ble Company Law Board passed an order dated 5.5.2009 in CA 13/2009 directing your client to cooperate with Director of our client to reopen the North Block premises. With an intention to overcome order dated 5.5.2009 passed in CA 13/2009 and to deprive our client from opening the North Block, your client illegally took away keys of the North Block from the custody of our client, handed over the keys of North Block to one M/s. Cimec Enterprises and set up M/s. Cimec Enterprises to institute a suit in OS 3290/2009. Thereafter the Hon'ble Company law Board passed an order dated 30.7.2009 dismissing the Company Petition 494/2008 filed by your client. Being aggrieved by the said order, your client preferred an appeal in Comp.Appeal 12/2009 before the Hon'ble High Court of Karnataka, challenging order dated 30.7.2009, passed in Company Petition 494/2008. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of director of the company, did not adhere to the orders passed by the competent forum and did not allow the company to carry on its business in the north block premises, your client is not entitled for amount demanded in your legal notice under reply. Therefore, your legal notice is baseless, illegal and misconceived. 4. Learned counsel for the petitioner Ms Sukruta vehemently submitted that the debt of the respondent company to the extent of ₹ 75.50 lakhs was an admitted liability of the respondent company and vide order dated 26.6.2015, a co-ordinate Bench of this Court, after hearing both the counsel, had found that this was a fit case for admission but since there was a fervent plea on behalf of the respondent that there is a possibility of settlement if there is a concession shown by the petitioner, therefore, the matter was referred to the Mediation Centre at Bangalore. However, on 27.11.2015, it was recorded that the mediation talks have failed but the respondent company expressed its readiness and willingness to pay the amount claimed in the statutory notice on installment basis and a sum of ₹ 10,50,000/- was thus assured to be paid on the next date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice quoted above. He also submitted that on the contrary, the respondent company has instituted a civil suit viz., OS No. 6942/2011 Sri. Gururaja Enterprises (P.) Ltd. v. Cimec Enterprises including the present petitioner J S Srinivasa as the 6th defendant for claiming damages for the sum of ₹ 2.33 crores against the defendants including the present petitioner and that suit is still pending trial in the competent civil court. 6. Learned counsel for the respondent company also submitted that in any case, in the absence of any written agreement to pay the interest on the said claim of ₹ 75.50 lakhs, no such liability of interest can be stated to be an admitted liability of the respondent company and can be so fastened upon the respondent company and the demand of such interest at an abnormally high rate of interest of 24% p.a. was raised, for the first time only in the legal notice served by the petitioner's Advocate vide Annexure G dated 20.9.2013. He also drew the attention of the Court to para 6.59 of the Company Petition 9/2012 filed by the present petitioner before the Company law Board vide Annexure R7 in which, when a cheque for ₹ 2.50 lakhs dated 18.6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited at the Bar. 9. In the considered opinion of this Court, the present winding up petition has no merit and deserves to be dismissed. The reasons are as follows: A winding up petition under S. 433(e) of the Companies Act, 1956 is a very serious and drastic proceeding against the respondent company and it cannot be equated with a proceedings for recovery of a debt, even though an admitted debt, and much less when the debt is disputed. The moment the respondent company puts up a defense raising a bonafide dispute about the debt claimed to be due to the petitioner creditor, the court should refuse to exercise this wide jurisdiction which can result in the death of a juristic person viz., a limited company. The case laws on this proposition are umpteen in number and one need not multiply such authorities except by making a brief reference to para 25 of the recent judgment in the case of IBA Health (India) (P.) Ltd. (supra) referred by the learned counsel for respondent, which would be enough to support the said proposition. The said para 25 reads as under: An examination of the company's solvency may be a useful aid in determining whether the refusal to pay debt is a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest for the delayed payment', thereby making it clear that there was no earlier agreement for payment of interest. If that is so, the demand for interest is not in pursuance of any contract or agreement. There is no admission by the respondent to pay interest. On the other hand, the respondent has denied its liability to pay interest. Interest cannot be claimed or awarded under S. 62(1)(a) of the Sale of goods Act and/or S. 3 of the Interest Act as these proceedings are not proceedings for recovery of money. Therefore, this Court cannot hold in these proceedings that the respondent is due to the petitioner, any interest, nor quantify the same. There is also a bona fide dispute in regard to the liability to pay interest, the rate of interest and the date from which the interest is payable. While it may be open to the petitioner to establish a claim for interest in a civil suit, under S. 61(2)(a) of the Sale of Goods Act and/or S. 3 of the Interest Act, I am satisfied that the petitioner has not made out any admitted or undisputed liability to pay interest, in these proceedings. Having regard to the fact that the respondent has paid the entire principal amount during the pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vides that in the absence of a contract to the contrary the court may award interest at such rate as it thinks fit on the amount of the price to the seller in a suit by him for the amount of the price from the date of the tender of the goods or from the date on which the price was payable. The interest amount can be determined by the company court in exercise of the power under the provisions of the Sale of Goods Act or on the principles underlying the said provisions. Learned counsel for the Company relies upon a decision of Allahabad High Court in Ultimate Advertising and Marketing v. G.B. Laboratories Ltd., 66, Company Cases Page 232 holding that the winding up court could not investigate into the question of rate and quantum of interest and unless it was established that the amount claimed was either agreed upon or admitted or decreed by a competent court, the amount did not become a debt. The learned Judge came to the conclusion on the facts of that case that the amount claimed as interest had yet to be established as a debt inspite of the fact that the principal amount was paid in the proceedings for winding up initiated by the creditor. In the present case the petitioner has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on facts where a case of inability to pay the company was established on the basis of supply of certain goods by the petitioner and invoices raised against the respondent company and taking resort to S. 61(2) of the Sale of Goods Act, the court considered it appropriate to award interest at a reduced figure of 12% p.a. as against 18% p.a. claimed by the creditor whereas the present is a case of a loan given by the ex-director of the company without any agreement in writing of advancing such loan with interest rate stipulated therein and there is neither the period of loan is specified, nor the manner in which it was to be repaid is specified much less the rate of interest payable on such repayment. Therefore, for such unascertained liability of interest for which there exists admittedly no specific contract, the winding up proceedings is not only the least suited but an absolutely ill-suited remedy, in the considered opinion of this Court. Since the principal loan itself has been disputed and denied by the respondent company in the present case, the mere fact that it had to pay the same under the threat of winding up petition being pending in this Court, does not convert an un-ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
