TMI Blog2017 (11) TMI 1526X X X X Extracts X X X X X X X X Extracts X X X X ..... or the same. We therefore do not find any fault with the order passed by the Learned Single Judge allowing the Official Liquidator's report in terms of prayer clauses (a), (b) and (d), resultantly rejecting the Company Application filed by the Appellant. There is therefore no merit in the above Appeal which is accordingly dismissed. However, time to deposit the amount as directed by the Learned Single Judge is extended by a period of 4 weeks from date. - APPEAL L NO. 331 OF 2017 IN COMPANY APPLICATION L NO.95 OF 2017 WITH OFFICIAL LIQUIDATORS REPORT NO.18 OF 2017 IN COMPANY PETITION NO.270 OF 2001 - - - Dated:- 16-11-2017 - R. M. SAVANT, SARANG V. KOTWAL, JJ Mr. Rohan Cama a/w Mr. T. N. Tripathi a/w Ms Sapana Rachure i/b T. N. Tripathi Co. for the Appellant Mr. Prathamesh Kamat for the Official Liquidator ORAL JUDGMENT (PER R. M. SAVANT J.) 1 Admit. Considering the issue involved heard forthwith. 2 The above Appeal arises out of the order dated 23-6-2017 passed by a Learned Single Judge of this Court A. S. Gadkari J., by which order the Official Liquidator's report No.18 of 2017 was came to be allowed in terms of prayer clauses (a), (b) and (d) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved that he did not find any reason to interfere with reassessment carried out by the Official Liquidator as the same was done with the assistance of a Chartered Accountant. As indicated above, it is the said order dated 23-6-2017 which is taken exception to by way of the above Appeal. 5 Heard the Learned Counsel for the parties. 6 The principal contention of the Learned Counsel for the Appellant Mr. Cama is that though a subsequent Mortgage Deed was executed on 5-12-1990, there is virtually no change in the terms as regards payment of interest. The Learned Counsel by referring to the first part of the clause as appearing in the 1987 Mortgage Deed and the 1990 Mortgage Deed would submit that the said clause is identical in both the Deeds and therefore the interest calculated would have to be on the basis of the compound interest. The Learned Counsel sought to draw our attention to the document which is at page 102 i.e. document titled as Basis of Reassessment , wherein a table is appearing below paragraph (7) of the said document in which table in the second column the interest payable is mentioned as 15.5% compoundable interest which is referable to the clause as appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and contemplates the payment of additional interest @ 2.5% p.a. on the total amount in default. Hence it was the submission of the Learned Counsel that where compound interest was contemplated, it was specifically provided for in the clause as in the 1987 Mortgage Deed and when it was not so in contemplation the words rests and compound are conspicuously absent, that is in the 1990 Mortgage Deed. The Learned Counsel would contend that the Official Liquidator having regard to the terms of the contract has carried out the reassessment as the original clause as well as the amended clause as is appearing in form Nos.8 and 13 with the Registrar of Companies. 8 Having heard the Learned Counsel for the parties, we have considered the rival contentions. The issue that arises is whether the Appellant is entitled to interest which is compounded under of the clause as in the 1990 Mortgage Deed. To answer the said issue it would be apposite to refer to the clause as appearing in the 1987 Mortgage Deed and the clause as appearing in the 1990 Mortgage Deed which clauses for the sake of ready reference are reproduced hereinunder: Clause appearing in the 1987 Mortgage Deed The Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... picuously absent as in the 1990 Mortgage Deed. Hence the parties by contract having not provided for payment of compound interest the claim of the Appellant for computation of the amount on the basis of the usual banking practice of capitalisation of interest cannot be entertained. 10 Now coming to the judgment cited on behalf of the Appellant i.e. in Central Bank of India (supra), the Apex Court in the said case was concerned with the interpretation of the term principal sum adjudged and such principal sum as appearing in Section 34 of the CPC and it is in the context of the said issue that the Apex Court referred to the usual banking practice of capitalisation of unpaid interest. The Apex Court concluded that the principal sum adjudged may include the amount of interest charged on periodical rests and capitalised with the principal sum actually advanced so as become a part of the principal. Paragraph 44 of the said judgment is material and is reproduced hereinunder: 44. We are of the opinion that the meaning assigned to the expression the principal sum adjudged should continue to be assigned to principal sum at such other placed in Section 34(1) where the expre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In M/s. Good Luck Talkies Ors (supra) the Division Bench held that the unpaid interest merges in the principal which under the contract is to be treated as principal. The said judgments are predating the judgment of the Constitution Bench in Central Bank of India's case (Supra). The Constitution Bench Judgment of the Apex Court has settled the law in so far as the Principal Sum Adjudged is concerned. The Apex Court as well as the Division Benches hence concerned with the issue as to on which amount the interest under Section 34 was payable. It is in the said context that the components of the principal sum adjudged as appearing in Section 34 of the CPC were set out by the Apex Court. 11 In our view the aforesaid judgments would not aid the Appellant to contend that the Appellant is entitled to compound interest in terms of the clause as appearing in the 1990 Mortgage Deed, when the parties by contract have not provided for the same. We therefore do not find any fault with the order passed by the Learned Single Judge allowing the Official Liquidator's report in terms of prayer clauses (a), (b) and (d), resultantly rejecting the Company Application filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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