TaxTMI 
TaxTMI 
TaxTMI 
2008 (2) TMI 621
X X X X Extracts X X X X
X X X X Extracts X X X X
.....87. It is the case of the plaintiff that the defendant, did not raise any dispute regarding quality, quantity or price of the goods supplied. In fact, the defendant made part payment from time to time aggregating to Rs. 3,20,763, leaving an amount of Rs. 1,13,747.87 which according to the plaintiff is still due and payable by the defendant to the plaintiff. It is the further case of the plaintiff that the defendant agreed to pay interest at 21 per cent, per annum on the outstanding amount and/or late payment. That was an oral agreement between the parties. On the basis of the said agreement, the plaintiff sent debit notes in respect of such interest component to be paid by the defendant from time to time. It is also the case of the plaintiff that the defendant made payment of such interest amount after deducting tax therefrom which presupposes that the defendant admitted the liability to pay interest as claimed by the plaintiff. According to the plaintiff, the defendant was liable to pay aggregate sum of Rs. 1,29,733.31 as on April, 1979. As payment was not received from the defendant, the plaintiff sent legal notice to the defendant calling upon the defendant to pay the outstand....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ermitted to withdraw the amounts deposited by the defendant with the Prothonotary and Senior Master of this hon'ble court with interest accrued thereon towards the decree that may be passed herein; (c)for costs of the suit; (d)for such further and other reliefs as the nature and circum stances of the case may require." During the pendency of the present suit, another company petition filed against the defendant-company being Company Petition No. 308 of 1978 came to be allowed, on January 21, 1981. By that order, the defendant-company has been ordered to be wound up and the official liquidator, High Court, Bombay, has been appointed as liquidator of the defendant-company. In view of this development the plaintiff sought leave of the company court under section 446 of the Companies Act to continue to prosecute the present suit against the defendant. The said leave came to be granted on August 6, 1981, in Company Application No. 164 of 1981 filed by the plaintiff. As per the said leave, the plaintiff amended the present suit and brought on record the official liquidator, High Court, Bombay, to espouse the cause of the defendant-company. The defendant-company had already by then fi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and had informed about the defective quality of the goods and the nature of loss caused to the defendant on that account. The plaintiff had assured that any loss caused to the defendant on account of defective goods would be made good. In paragraph 4(d) the defendant has referred to the letter dated November 6,1978, sent to the plaintiff informing about the defective goods sent under bills Nos. 831 and 832, both dated November 4,1978, and bills Nos. 834 and 837, both dated November 6,1978, and reiterating the position stated in the previous letter dated October 31,1978. In paragraph 4(e) of the written statement, it is mentioned that the defendant wrote letter dated March 15, 1978, to the plaintiff and recorded the nature of loss caused to the defendant on account of defective goods which was to the extent of about Rs. 1.05 lakhs. According to the defendant, the plaintiff had agreed to pay the said amount of Rs. 1.05 lakhs to be adjusted by the defendant. On the above basis the defendant asserts that the defendant is not liable to pay any amount to the plaintiff. After the official liquidator has been brought on record in the present suit, written statement has been filed on beha....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in the plaint. The plaintiff has also proved the relevant documents placed on record along with the compilation of original documents. The original defendant-company nor the newly added defendant official liquidator insisted for cross -examination of the plaintiffs witnesses. Besides, the defendant has neither filed any compilation of original documents nor any affidavit of any witness in lieu of examination-in-chief. Left with this situation, it would necessarily follow that the defendants have failed to prove the matters in issue Nos. 2 and 3 respectively. In that sense, only issue No. 1 remains for consideration of this court. Issue No. 1 is in two parts. The first part refers to the principal amount and the latter part refers to the claim of interest. In so far as first part is concerned, namely, outstanding principal amount of Rs. 1,13,744.87 during the course of arguments, counsel appearing for the official liquidator in all fairness submitted that he will not be able to resist the said claim of the plaintiff. Inasmuch as, the defendant has not produced any evidence in rebuttal or to establish the facts stated in the written statement. Thus, understood, the plaintiff would....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be entitled to a decree in respect of principal amount of Rs. 1,13,747.87 but also towards interest amount at 21 per cent, per annum accrued on such outstanding amount till the same is paid by the defendant. That takes me to the contention raised by counsel for the official liquidator across the bar that after the date of winding up order the plaintiff would be entitled only for interest at 4 per cent, per annum and not beyond. However, learned counsel was unable to point out any provision in the Companies Act or the Rules made thereunder which would support such a proposition. Learned counsel, however, placed emphasis on Rules 156 and 179 of the Companies (Court) Rules, 1959. To buttress this submission reliance was also placed on the decision in the case of Kerala Financial Corporation v. Official Liquidator, High Court of Kerala [1996J 87 Comp. Cas. 183 (Ker.) and another decision in the case of Mattoor Chits and Finance P. Ltd. (in liquidation) v. Mrs. Mary Baby [1998] 94 Comp. Cas. 595 (Ker.); [1998] 5 Comp LJ 383. Reverting to the case of Kerala Financial Corporation v. Official Liquidator, High Court of Kerala [1996] 87 Comp. Cas. 183 (Ker.), the challenge was in respect o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Weaving Co. Ltd. [1970] 40 Comp. Cas. 689 (SC) ; [1970] 1 Comp LJ 151). Keeping in mind the above statement of law, the question is whether the plaintiff would be entitled for interest at the same rate even after the order of winding up has been passed. The winding up order has been passed against the defendant-company on January 21, 1981. The entitlement to receive the agreed interest, which agreement was much prior to the institution of the company petition, is reinforced from the contemporaneous record relating back to September, 1977 (Debit Note No. 157 of 1977 dated October 20, 1977 and Form No. 19A). It is not a case of any new right being created or completion of uncompleted rights as such. The only other provision pressed into service on behalf of the official liquidator is rule 179 of the Companies (Court) Rules, 1959, which reads thus: "179. Payment of subsequent interest.-In the event of there being a surplus after payment in full of all the claims admitted to proof, creditors whose proofs have been admitted shall be paid interest from the date of the winding up order or of the resolution as the case may be, up to the date of the declaration of the final dividend, at....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tive of the dividend to be paid by the official liquidator to the other creditors who are similarly placed. I would assume that the plaintiff's case is similar to that of a secured creditor, as the Division Bench of this court had ordered deposit of the amount to be transferred in the present suit account "as security for execution of the decree" to be passed in favour of the plaintiff. Even so, the plaintiff's claim would be as that of any other secured creditor. It is a different matter that the plaintiff stood outside the winding up action, but that does not mean that the plaintiff would still be entitled to recover the entire decretal amount irrespective of the dividend to be declared and disbursed, to the creditors similarly placed, by the official liquidator. To the extent the decretal amount exceeds such declared dividend, the plaintiff would be obliged to bring back such amount to be made over to the official liquidator for being disbursed to the other eligible persons as per the preferential order specified in sections 529 and 529A of the Companies Act. Counsel for the plaintiff had placed reliance on the exposition in the 22 case of Lalchand Radhakisan v. Ramdayal Ramnar....