Appeal allowed, dismissal order set aside, winding-up petition restored. Parties bear own costs.

The appeal was allowed, the dismissal order was set aside, and the winding-up petition was restored for further consideration by the company judge. The parties were directed to bear their own costs, and any opposing affidavits regarding the principal amount claim were to be considered. The Notice of Motion was also disposed of accordingly with no costs awarded.

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Issues involved: Impugning the order of the learned company judge dismissing the winding-up petition based on a dispute over the claimed amount and interest rate.

Summary:
The appellants filed a winding-up petition claiming an amount due from the respondent company, comprising the principal amount and interest. The respondent had promised to supply an equivalent quantity of rejected goods or make repayment. The appellants' attorneys' letter served as a notice u/s 434 of the Companies Act, 1956, demanding repayment. The company judge dismissed the petition stating the interest rate claimed was unjustified. The appellants challenged this order, arguing that even if the interest claim was unjustified, the dismissal of the petition was incorrect if the principal amount claim was valid. The main issue was whether a winding-up petition could be dismissed solely based on a disputed interest rate when the principal amount exceeded the statutory limit.

The court referred to precedents from English and Indian courts, emphasizing that a winding-up order should not be refused solely due to a dispute over the exact amount owed. The court held that if a portion of the claim was in dispute but the remaining amount exceeded the statutory limit, the petition should not be dismissed. Disputes over interest rates should not invalidate the statutory notice or warrant dismissal of the petition. The company judge should have considered the validity of the principal amount claim and whether a genuine dispute existed before dismissing the petition. The court set aside the dismissal order and restored the winding-up petition for reconsideration by the company judge.

In conclusion, the appeal was allowed, the dismissal order was set aside, and the winding-up petition was restored for further consideration by the company judge. The parties were directed to bear their own costs, and any opposing affidavits regarding the principal amount claim were to be considered. The Notice of Motion was also disposed of accordingly with no costs awarded.

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