IMPORTANT POINT
The compensatory nature of interest and the power of the Company Court to order on interest were central legal principles established in the judgment.

ORDER :

1. The present company petition was filed in the year 2016 by the petitioner seeking winding up of the respondent-company on account of the outstanding debt of approximately Rs. 61.50 lakhs.

FACTS/BACKGROUND

2. This case has a chequered history. The undisputed principal due amount was for the goods supplied by the petitioner to the respondent-company during the period 01.04.2014 to 31.03.2015. When the statutory notice dated 17.09.2015 under Section 433(e) read with Section 434 of the Companies Act, 1956, demanding payment of the outstanding dues was not complied with, and looking to the fact that the respondent company was running into losses and had an accumulated loss of about Rs. 2.01 crores as on 31.03.2014, the instant winding up petition was filed in 2015, and notices were issued on 22.01.2016. The petition was admitted vide order dated 06.01.2017 after affording several opportunities to the respondent-company to file reply or to amicable settle the dues. However, the application for appointing provisional liquidator was kept pending to be considered on the next date.

3. An interim order was passed on 05.10.2017, again after affording several opportunities to the respondent-company, restraining the respondents from alienating any movable or immovable property of the respondent-company. Thereafter, the matter was listed several times wherein respondents sought time to clear the outstanding dues and therefore the matter had to be adjourned on respondent’s behest. Vide order dated 24.01.2019, the application of the respondent-company seeking partial vacation of stay was dismissed and the interim stay order dated 05.10.2017 was made absolute. Against the said orders, the respondent-company preferred an appeal before the Division Bench but the application seeking stay of orders of this Court was dismissed by Division Bench of this Court vide order dated 13.05.2019 in D.B. Special Appeal (Civil) No. 4/2019. Thereafter, the special appeal was ultimately dismissed as withdrawn vide order dated 11.11.2019.

4. By 21.01.2020, after seeking several opportunities from this Court, the respondent-company had repaid the principal outstanding amount, albeit in instalments. However, the interest amount of about Rs. 28 lakhs, calculated at 18% per annum was still pending. The respondent sought modification of the stay order with an undertaking that they would deposit a bank guarantee of the due amount of interest. Therefore, an order to this effect was passed on 21.01.2020 vacating the interim order dated 05.10.2017 subject to the condition that the respondent-company deposits bank guarantee in lieu of interest amount.

5. The matter was listed for several times thereafter but the order dated 21.01.2020 was not complied with by the respondent-company. When the matter was listed on 12.08.2021, learned counsel for the respondent had objected to the high rate of interest and the matter was adjourned with directions to parties to seek necessary instructions. When the matter was listed on 14.07.2022, the respondent-company expressed disinclination to even pay interest @ 9% and the matter was therefore directed to be listed on the prayer so made in the company petition. After this, an application was moved by the respondent under Section 151 of CPC read with Section 433(e) of the Companies Act, 1956 seeking amendment of order dated 21.01.2020 and argued that there was no liability on behalf of the respondent-company to pay any amount towards interest as the principal amount was already paid. The said application was dismissed on merits vide detailed order dated 17.02.2023 and the interim order dated 05.10.2017 was directed to be continued.

6. Thereafter, the matter was listed for final arguments on at-least 5 occasions and each time the matter had to be adjourned either on request of the respondent-company or on account of non-appearance by the respondents or their counsel.

SUBMISSIONS OF PETITIONER

7. Supporting the claim of interest, learned co