The liability to pay interest is a matter to be considered by the company court in the winding up proceedings and the creditor cannot be permitted to file a civil suit with regard to payment of interest alone.

SRINIVASAN J.

These two appeals arise out of a petition for winding up filed under section 433(e) of the Companies Act. The appellant in OSA No. 116 of 1987 was the respondent in Company Petition No. 87 of 1985 and the appellant in OSA No. 174 of 1987 was the petitioner in the company petition. The parties will be referred to hereinafter by their rank in the company petition. It is not a matter in dispute that the petitioner supplied skins of sheep and goats to the respondent from January, 1981, to July, 1982, under 17 bills marked as exhibits P-2 to P-18. There was no time limit fixed for payment of the price of the goods, nor was there any agreement to pay interest on delayed payments. It is admitted that a sum of Rs. 1, 24, 752.88 was due to the petitioner, and it was making demands on the respondent to pay the same. It issued a notice through a lawyer on December 8, 1982, and the notice is marked as exhibit P-45. In that notice, it had not only demanded the payment of the principal, but also the payment of interest at the rate of 18 per cent. per annum. There was no reply to the notice by the respondent. Thereafter, there was correspondence between the parties. On the one hand, the petitioner was demanding payment of money due to it ; and on the other, the respondent was repeatedly assuring the petitioner that it will settle the accounts shortly. Ultimately, a telegram was sent by the petitioner on November 1, 1985, demanding payment of principal and interest. Finding that it did not produce the desired result, the petitioner filed the company petition as stated above for winding-up the respondent company.

The respondent, while admitting that the principal amount was due, was raising a dispute with regard to its liability to pay interest thereon. During the pendency of the petition, the respondent made payments as follows :Rs.

1. 7-1-1986 10, 000

2. 6-2-1986 10, 000

3. 19-2-1986 30, 000

4. 19-3-1986 20, 000

5. 2-2-1987 20, 000

6. 17-2-1987 20, 000

Finally, it paid the balance due on April 29, 1987.

At the time when the petition was heard by the company court, the respondent contended that the liability to pay interest was in dispute and, therefore, it fell outside the purview of section 433 of the Companies Act. The contention on behalf of the petitioner was that the matter of interest was also covered by the provisions of section 433 of the Companies Act as the liability to pay the principal amount was not in dispute ; and the demand for interest had been made long prior to the filing of the petition.

The learned judge accepted the contention of the petitioner and relying upon

the decision of the Punjab and Haryana High Court in Stephen Chemical Ltd. v. Innosearch Ltd. 1986 (60) CC 702, 1985 TaxLR 2141, 1993 (1) CompLJ 195, held that the matter of interest fell within the scope of the company petition. With regard to the rate of interest, the learned judge directed the respondent to pay interest at the rate of 9 per cent. per annum on the principal amount and granted three months' time to the respondent to pay the same. The learned judge directed the petition to be called on July 29, 1987.

The petitioner has filed OSA No. 174 of 1987 contending that it will be entitled to interest at the rate of 18 per cent. per annum as claimed by it in the notice dated December 8, 1982. The respondent has filed OSA No. 116 of 1987 contending that it is not liable to pay any interest and, in any event, the question of liability to pay interest cannot be gone into in the proceedings for winding up.

Learned counsel for the petitioner referred to the decision of the Punjab and Haryana High Court in Stephen Chemical Ltd. v. Innosearch Ltd. 1986 (60) CC 702, 1985 TaxLR 2141, 1993 (1) CompLJ 195 and in Delhi Cloth and General Mills Co. Ltd. v. Stepan Chemicals Ltd. 1986 (60) CC 702, 1985 TaxLR 2141, 1993 (1) CompLJ 195. The proposition laid down in both the cases is that the question of payment of interest is a matter to be considered by the com