TaxTMI 
TaxTMI 
2007 (6) TMI 290
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....ent of wheat was delayed for more than three days then the respondent-company was liable to pay customary interest at 18 per cent per annum on the delayed payment. The petitioner-firm purchased wheat for the respondent-company during the years 1994 to 1997 and sent the same to the respondent-company through trucks along with bills and bilties. The petitioner-firm obtained "LL" forms after deposit of the market fee and "E" forms for having deposited the fee in the market committee. The respondent-company continued to make part payments up to March 18, 1998. During the years 1994-95 and 1995-96, the respondent-company made all payments but in the year 1996-97 the respondent-company could not make complete payment and as on April 1, 1997, a sum of Rs. 5,25,476.28 (including customary interest) was outstanding towards it. This amount was paid by the respondent-company by April 26, 1997. In the year 1997, the petitioner-firm purchased and supplied to the respondent-company wheat valued at Rs. 34,27,719. The respondent-company could only make part payments. It is claimed that the respondent-company issued a confirmation certificate dated September 30, 1997 and confirmed credit balance of....
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.... 121.60 61,909.00 2148 26-06-97 121.60 61,866.00 2149 27-06-97 199.50 1,01,641.00 2152 06-07-97 114.00 55,514.00 2158 17-07-97 123.60 64,331.00 2160 21-07-97 142.50 77,171.00 2161 21-07-97 142.50 77,053.00 2162 22-07-97 171.00 92,556.00 2163 23-07-97 101.65 54,959.00 2164 24-07-97 118.75 64,766.00 2165 24-07-97 118.75 64,981.00 2166 25-07-97 118.75 64,780.00 2172 28-07-97 133.95 72,662.00 2180 11-08-97 123.50 65,081.00 2181 12-08-97 120.00 62,943.00 Interest up to 31-03-98 1,30,858.00 Total Balance as on 31-03-98 41,84,053.28 38,01,027.28 3,83,026.00 Year 1998-99 No. Bill dated Quantity of Wheat Amount Payments made Q.K. Rs. P. Dated Rs. P. Balance due as on 01-04-98 Interest up to 31-03-99 3,83,026.00 069,902.00 -- -- Total 4,52,928.00 From dated 01-04-99 to 30-06-9....
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....ol and pressure tactics for recovery of the alleged amount, which according to the respondent-company is not due and payable to the petitioner-firm. It has been asserted that the control of the respondent-company was earlier held by late Shri Murari Lal, late Shri Anil Kumar Garg and Smt. Minal Garg. It has been admitted that the petitioner-firm made supplies of wheat during the periods April 1, 1997, to August 12, 1997, when the respondent-company was being run by the aforementioned persons. Shri Murari Lal died on September 19, 1997 and Shri Anil Kumar Garg died on October 7, 1997. Thereafter, the shareholdings devolved in favour of Mrs. Minal Garg, wife of late Shri Anil Kumar Garg, and his children. The functioning of the respondent-company came to a grinding halt as there was no regular management of the company in place. It has further been disclosed that after the death of two active directors-Shri Murari Lal and Anil Kumar Garg, the respondent-company was not able to carry on its affairs in accordance with law and consequently Mrs. Minal Garg, the surviving shareholder moved an application before the Company Law Board for convening a general body meeting under section 186 o....
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....tition were reiterated. On September 6, 2001, a supplementary affidavit was filed on behalf of the respondent-company as further reply to the petition in which almost same averments were made as were contained in the earlier preliminary objections. This time order of the Company Law Board, dated February 2, 1998 (respondent No. 1), minutes of the meeting of the creditors held on January 15,1998 (R2), and a statement of payments made to various creditors by the respondent-company (R3) were placed on record. On November 5, 2001, a reply by way of affidavit was filed on behalf of the petitioner-firm to the aforementioned supplementary affidavit of the respondent-company. Along with the said affidavit, the petitioner-firm has also placed on record annexures P128 to P132, i.e., proceedings of the civil suit filed by the petitioner-firm against the State Bank of Patiala and the State Bank of Bikaner and Jaipur, seeking the relief of mandatory injunction directing the banks to honour and clear their demand draft No. 654282, dated March 18, 1998, which was given by the respondent-company to the petitioner-firm. It is apposite to mention here that another creditor, namely, M/s. Munshi Ram....
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.... respondent-company on documents annexures R2 and R3 is wholly misplaced. Moreover, the petitioner-firm had to file a suit for mandatory injunction seeking encashment of demand draft No. 654282, dated March 18, 1998, in which averments have been made that the aforementioned demand draft was issued by the respondent-company in lieu of the wheat supplied by the petitioner-firm to it and thereafter the aforementioned demand draft was purchased from the State Bank of Bikaner and Jaipur. The demand draft was handed over to the petitioner-firm as part payment. Eventually, the payment of demand draft was made, which is evident from the order dated March 31, 1998 (annexure P131). Therefore, it is clear that a sum of Rs. 2,51,716 is due to the petitioner-firm, which is inclusive of the customary interest at 18 per cent, per annum on the delayed payment as on March 28, 1998. Therefore, it is evident that after acknowledging the liability to pay, the respondent-company has failed to substantiate its plea that a settlement between the petitioner-firm and the respondent-company had taken place wherein the petitioner-firm has waived 50 per cent of its due by accepting rest of the 50 per cent in ....
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....ax at source shows that an amount of Rs. 13,30,000 has been shown credited as on March 31, 1997 and an amount of Rs. 13,000 has been shown as deduction at source. On the basis of the aforementioned document, learned counsel has submitted that the rate of interest as agreed between the parties was paid. He has then referred to the legal notice, dated June 25, 1999 (P125), sent by counsel for the petitioner-firm wherein payment of Rs. 4,77,658 along with future customary monthly interest at 18 per cent, per annum from July 1, 1999, till the realisation of the due amount was claimed. Learned counsel has maintained that from these documents the claim of the petitioner-firm for payment of interest stand completely substantiated. Dr. Surya Parkash, learned counsel for the petitioner-firm has also argued that once the money has been retained without any authority of law involving the petitioner-firm in a series of litigation then the rate of interest could not be reduced below 18 per cent, per annum. In support of his submission, learned counsel has placed reliance on the observations made in paragraph 8 of the judgment by the hon'ble the Supreme Court in the case of Aditya Mass Communic....
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....so raised a preliminary objection asserting that a petition under section 433(e) of the Act for claim of interest is not maintainable. In support of his submission, he has placed reliance on two Division Bench judgments of the Karnataka High Court in the cases of Smt. Nagaveni Bhat v. Canara Leasing Ltd. [2002] 109 Comp. Cas. 841 and Shakti Prakash Metal Finishers (P.) Ltd. v. Hindustan Machine Tools Ltd. [2002] 108 Comp. Cas. 310 (Kar.) and argued that any violation of the terms of contract would not ipso facto come within the purview of the aforementioned provision. He has also referred to the view taken by the learned single judge of the Andhra Pradesh High Court in the case of Bombay Glass Blowing Industries v. Bio Vaccines (P.) Ltd. [1999] 98 Comp. Cas. 174. The question of awarding interest and its rates has been the subject-matter of consideration of the hon'ble the Supreme Court in numerous judgments including the case of Aditya Mass Communications (P.) Ltd. v. A.P.S.R.T.C, AIR 2003 SC 3411. In paragraph 8 of the judgment it has been laid down that the quantum of interest which a court may allow is governed by the facts of the case and not by any precedent. The aforementio....