Delhi High Court
Bhajan Singh Samra vs M/S Wimpy International Ltd. on 18 May, 2012
Author: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 18th May, 2012
+ Co. App. No.42/2012
BHAJAN SINGH SAMRA ..... Appellants
Through: Mr. Rohit Sharma, Advocate
Versus
M/S WIMPY INTERNATIONAL LTD. . ..... Respondent
Through: Mr. Sudhir Nandrajog, Sr. Advocate
with Mr. Manan Gupta, Ms. Deepali
Sharma and Mr. Akhil, Advocates
CORAM :-
HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
RAJIV SAHAI ENDLAW, J
1. The appellant impugns the order dated 06.03.2012 of learned
Company Judge allowing the Co.Pet 246/2006 filed by the appellant for
winding up of the respondent company by giving an opportunity to the
respondent company to pay the principal amount of Rs.50,00,000/- (fifty
lakhs), being the debt owed by the respondent company to the appellant (and
which amount has already been paid), to the extent it finds no interest
whatsoever on the said principal amount to be due to the appellant. The
learned Company Judge declined to find any liability for interest on the
ground that there was no written contract specifying any interest payable.
2. Upon counsel for the appellant relying on Vijay Industries v. NATL
Technologies Ltd, (2009) 3 SCC 527, notice of this appeal was issued. The
counsels have been heard.
3. It was/is not in dispute that the appellant had on 5 th/8th December,
1994, advanced a sum of Rs.50 lakhs to the respondent. While the appellant
claimed the transaction to be of loan, repayable with interest at the rate of
22% per annum, the respondent company took a stand that the said amount
was paid as part payment towards the share application money and owing to
the failure of the appellant to pay the balance, the shares remained to be
issued.
4. The learned Company Judge held that in jurisdiction of winding up,
disputed questions of fact could not be adjudicated. It was however held that
since it was the stand of the respondent company itself that the amount was
towards share application money and since no shares had been issued, the
money was nevertheless refundable. Though the counsel for the appellant,
before the learned Company Judge also had relied on Vijay Industries
(supra), but the learned Company Judge observed that in the absence of any
written document specifying the rate of interest, no direction for payment of
any amount towards interest or of winding up for non-payment thereof could
be issued. Liberty however was granted to the appellant to file a civil suit
qua his claim for interest.
5. The Supreme Court in Vijay Industries (supra) held that Sec. 433 of
the Companies Act does not state that the debt must be precisely a definite
sum; that failure to pay the agreed interest or the statutory interest would
come within the purview of the word 'debt'; that it is one thing to say that
the amount of debt is not definite or ascertainable because of the bona fide
dispute raised thereabout but it is another thing to say that although the dues
as regards the principal amount stand admitted but a question is raised as to
whether any agreement had been entered into for payment of interest or
whether the rate of interest would be applicable or not - in the latter case,
the application for winding up cannot be dismissed; interest is payable by
way of restitution.
6. The counsel for the respondent company has, of course, sought to
oppose this appeal by challenging the very claim of the appellant to the
principal amount even. However, the said part of the judgment of the learned
Company Judge which is not challenged by the respondent company and
which has attained finality and rather with which the respondent company
has complied, is no longer open for being agitated.
7. Applying the aforesaid law laid down by the Supreme Court, we are
of the view that the respondent company cannot be held to be owing no debt
whatsoever on account of interest to the appellant. The demand of the
appellant for `50,00,000/- was indeed wrongly denied by the respondent
company compelling the appellant to institute the petition for winding up
and which itself dragged on for six years. The appellant cannot be relegated
to the remedy of a civil suit qua interest to which he is entitled by way of
restitution. We may notice that Justice Y.K. Sabharwal speaking for this
Court in Devendra Kumar Jain Vs. Polar Forgings & Tools Ltd. 49 (1993)
DLT 552 had also opined that where the liability to pay the principle amount
is not disputed, the creditor need not be forced to initiate separate litigation
for recovery of interest amount and the interest amount can be determined
by the Company Judge in the winding up proceedings and on the failure of
the Company to pay that amount, the Company can be ordered to be wound
up on the ground that it is unable to pay its debts. To the same effect is the
judgment of Division Bench of Punjab & Haryana High Court in
Unisystems P. Ltd. Vs. Stepan Chemical Ltd. MANU/PH/0244/1985.
However we find that though the amount of Rs.50 Lakhs was advanced by
the appellant to the respondent company in the Year 1994 but the same was
demanded from the respondent company only in the year 2002 and the
winding up petition was filed only in the year 2006. Applying the judgment
(supra) also, we find ourselves unable to find the appellant entitled to any
interest till the filing of the winding up petition.
8. The next question which arises is as to the rate of interest.
Considering all the facts and circumstances of the case, we are of the
opinion that direction for payment of interest at the rate of 6% per annum
from the date of filing of the petition for winding up and till deposit of the
principal amount of Rs.50 lakhs by the respondent company in the Court
would sub-serve the interest of justice and restitution.
9. We therefore dispose of this appeal with the direction to the
respondent company to, within ten weeks hereof, deposit the amount
computed as aforesaid in this Court, failing which the consequences as
provided in the order dated 21.11.2011 of the learned Company Judge, shall
follow and the winding up petition shall stand revived. Upon the amount
being deposited, the appellant shall be entitled to withdraw the same.
No order as to costs.
RAJIV SAHAI ENDLAW, J
ACTING CHIEF JUSTICE
MAY 18, 2012
'raj' ..
