This Company Appeal has been filed under Section 483 of the
Companies Act, 1956 against the judgement and order dated 16.07.2010
passed by the learned Company Judge in Company Petition No.09 of 1995
preferred under Section 433 read with Section 434 and 439 of the
Companies Act. In the impugned order the learned Company Judge has
provided that the respondent is liable to pay the interest on the principal
amount at the rate of 12% per annum with effect from August, 2008 till the
date of actual payment of the principal amount and accordingly direction has
been issued to the respondent to pay the same.
The short question involved for consideration in this appeal is as to
whether the appellant is entitled to get the payment of interest on the
principal amount from 28.9.1994, when for the first time the liability was
admitted by the respondent or the interest on the principal amount shall be
paid to the appellant with effect from August, 2008, as directed by the
learned Company Judge.
In 1993 the respondent company had placed various orders to the
appellant's company for supply of Amber Glass and empty Beer Bottles. It
did not raise any grievance regarding quantity or quality of the goods
supplied by the appellant's company. The bills were submitted to the
respondent company for payment of the supply of the goods against which
the respondent company had paid certain amounts. However, after due
adjustment an outstanding amount of Rs.2,66,848.70 remained unpaid. It is
alleged that the respondent company admitted the said due amount in its
letter dated 28.09.1994 written to the appellant's company. On 20.10.1994
the appellant's company gave statutory notice under Section 434 of the
Companies Act, demanding the due amount of Rs.2,66,848.70 along with
interest at the rate of 24%. In the reply dated 16.11.1994, the respondent
company admitted the payment of the aforesaid amount but did not pay the
same. Ultimately, the company petition was filed on 24.11.1995 for winding
up of the respondent company.
In the counter affidavit filed by the respondent company on 2.7.1996,
in paragraph-10, it was admitted that there is an outstanding dues of
Rs.2,66,848.70, which is required to be paid by the respondent company to
the appellant's company. However, the liability of payment of interest was
denied. It was only after the order dated 28.07.2009 passed by the Company
Judge for payment of the admitted amount, the respondent company paid the
principal amount in three instalments on 19.08.2009, 15.09.2009 and
26.10.2009.
The learned counsel for the appellant-company vehemently submitted
that since the liability of payment of the said principal amount was duly
admitted by the respondent company, however, the same was not paid, as
such the appellant was fully entitled to claim the winding up of the
respondent company and it was also entitled to get the interest on the
principal amount from 28.09.1994, when the respondent company in its letter
dated 28.09.1994, had accepted its liability and admitted to pay the said
outstanding amount. It is further submitted that in the counter affidavit dated
02.07.1996, the respondent company had admitted the liability of the
payment of said amount, therefore, in view of the settled preposition of law
as enunciated in number of decisions of the Hon'ble Apex Court, the
appellant is entitled to get the payment of interest on the withheld or differed
amount.
In support of his argument the learned counsel for the appellant
company has relied on the following decisions:
1. 2009 (10) S.C.C. Page 187, Indian Hume Pipe Company Ltd.
vs. State of Rajsthan and others.
2. 2002 (1) S.C.C. Page 367, Central Bank of India vs. Ravindra
and others.
3. 1992 (1) S.C.C. Page 508, Secretary, Irrigation Department,
Government of Orissa and others vs. G.C. Roy.
4. 2009 (3) S.C.C. Page 527, Vijay Industries vs. Natl
Technologies Ltd.
In the aforesaid judgements the Hon'ble Apex Court has consistently
held that a person deprived of the use of money to which he has legitimate
right shall be compensated for the deprivation, though it may be called by
any name, i.e. interest, compensation or damages. The person deprived is
entitled to get the interest on the withheld amount, whether there is any
clause in the agreement or not.
It is contended by the learned counsel for the appellant that the
learned Company Judge had failed to appreciate that the appellant-company
was entitled to get the interest on the principal amount for the entire period
from the date the amount had fallen due till the date of its actual payment,
and in any case, at least for the period from the date, on which the liability of
payment of principal amount was admitted till the date of its actual payment.
It is submitted that the learned Company Judge has wrongly held that the
respondent company is liable to pay the interest on the principal amount with
effect from August, 2008 till the date of actual payment.
The learned counsel for the appellant tried to emphasize that the
petitioner (appellant) had not agreed for payment of the said principal amount
without interest in July, 2008 when his counsel had met to the Manager of the
respondent-company. A personal affidavit to this effect has also been brought
on record by the counsel for the appellant Sri Shailendra Srivastava,
Advocate. It is further submitted that even if, though not admitted, it is
presumed that the counsel for the petitioner (appellant) had given a proposal
to the respondent company to make the payment of principal amount without
interest, it can not be said that the appellant company has lost his rights to
claim interest on the withheld amount as the said proposal was never
accepted or honoured by the respondent company and against the said
proposal no payment was made by the respondent company. It was only
under the directions of the learned Company Judge dated 24.07.2009, the
outstanding principal amount was paid in instalments sometime in August,
2009 to October, 2009, as such the appellant is fully entitled to get the
interest on the said principal amount from the date of admission of the liability
of payment of the said amount till its actual payment.
The learned counsel for the respondent company has very candidly
accepted that a sum of Rs.2,66,848.70 was the principal amount which was
liable to be paid to the appellant-company and the same could not be paid
due to financial problems of the respondent company. It is also admitted by
the counsel for the respondent company that in the reply dated 28.09.1994,
the respondent company had admitted its liability to pay the said amount,
however, it had denied to pay the interest.
The learned counsel for the respondent company contended that the
counsel for the appellant had made a statement before the Company Judge
that in July, 2008 he met the Manager of the respondent company and asked
him to pay the principal amount even without interest. On the basis of the
statement of the counsel for the appellant, the learned Company Judge has
proceeded to hold that the respondent company is liable to pay the interest
on the principal amount only with effect from August, 2008 till the date of
actual payment of the principal amount, as such there is no infirmity or
illegality in the order under challenge, which is just and proper.
We have considered the various submissions made by the learned
counsel for the parties and perused the records.
It is admitted case that the principal amount of Rs.2,66,848.70 had
become due to the appellant-company, which was liable to be paid by the
respondent company. It is also admitted that the said liability of payment was
accepted by the respondent company in its letter dated 28.09.1994.
From the perusal of records of Company Petition No.9 of 1995, it is
very much clear that in paragraph-10 of the counter affidavit dated
02.07.1996, the respondent company had accepted the outstanding dues of
Rs.2,66,848.70 to the appellant-company. The contents of paragraph no.10
of the counter affidavit is being quoted below:
“10. That the contents of para 9 of the company petition so far as
related to the amount of outstanding due to petitioner company viz.
Rs.2,66,846.70 are not disputed. However, the respondent company
denies that any amount as interest has become due or is payable to the
petitioner company by the respondent company.”
So far as the payment of interest on the outstanding dues is
concerned, the law is well settled that the aggrieved party is entitled to get
the interest. It is also well settled that it is the discretion conferred on the
Court to award or not to award interest on the withheld amount in the facts
and circumstances of the case.
In the present case there is no reason or justification for the Company
Judge to award the interest on the said admitted principal amount only w.e.f.
July, 2008 till the date of its actual payment when the said liability was
accepted in the letter dated 28.9.1994. Even if, it is presumed that the
learned counsel for the appellant (petitioner) had made any offer or proposal
to the Manager of the respondent company to make the payment of the
principal amount without interest, it can not be said that the appellant had
given up its right to claim interest on the said withheld amount, as first of all,
the said offer or proposal was not accepted or honoured by the respondent
company and secondly, no such offer or proposal can deny the appellant
from claiming the interest on the withheld principal amount.
