The company judge is the appropriate forum to determine whether the creditor is entitled to interest on the principal amount.

D. S. Tewatia, J.

1. Messrs Innosearch Ltd. , 2e/25, Jhandewalan Extension, New Delhi, petitioned this court under section 439 read with sections 433 and 434 of the Companies Act, 1956 , hereinafter referred to as "the Act", for winding-up Messrs Stephen Chemical Limited, Flat No.119-120, sector 17-B, Chandigarh, with the allegations that the former company supplied goods worth Rs.48,308 to the latter company against order No.572/211, dated December 18, 1979, under the petitioning companys bill No. B/a-III/5, dated December 25, 1979 ; that despite reminders, the said company did not clear the bill; that on November 18, 1981, the petitioning company issued demand under section 434 of the Act, requiring the other company to pay Rs.50,842.05, together with a sum of Rs.200 towards the costs of notices within the specified period; and that in spite of the said notices, the other said company failed to make payment.

2. Messrs Stephen Chemical Ltd. before the company judge admitted its liability regarding the price of the goods in question and paid up the principal amount. It, however, disputed its liability regarding the payment of interest on the said amount. The learned judge, vide his order dated May 31, 1984, directed Messrs Stephen Chemical Ltd. to pay the petitioning company twelve per cent. interest on the principal amount.

3. Messrs Stephen Chemicals Ltd. (hereinafter referred to as " the appellant") have challenged the said order of the company judge. The stand taken on behalf of the appellant is that there was no agreement between the parties regarding the payment of interest nor there existed any trade custom providing for the payment of interest. It is also the stand of the appellant that in case the company whose winding up is sought raises a bona fide dispute regarding its liability to pay to the creditor company, then the appropriate forum for determining that dispute is the civil court and not the company judge. In support of his submission, the learned counsel for the appellant placed reliance on Amalgamated Commercial Traders (P.) Ltd. V/s. A. C. K. Krishnaswami [1965] 35 Comp Cas 456 (SC), and drew pointed attention to the following observations of their Lordships made therein (at p.463):

" It is well settled that a winding-up petition is not a legitimate means of seeking to enforce payment of a debt which is bona fide disputed by the company- A petition presented ostensibly for a winding-up order but really to exercise pressure will be dismissed and under such circumstances, may be stigmatised as a scandalous abuse of the process of the court. "

4. In our opinion, the ratio of the Amalgamated Commercial Traders (P.) Ltd. s case [1965] 35 Comp Cas 456 (SC), is not attracted to the facts of the present case. That was a case where a bona fide dispute was raised regarding the liability of the company sought to be wound up to the creditor to pay any debt and their Lordships felt that the creditor had initiated winding-up proceedings to put pressure upon the said company. In the present case, the principal amount of debt is not only not disputed but, in fact, had been paid to the creditor after the winding-up proceedings had been initiated before the company judge. The only question that remains is as to whether the creditor was also entitled to interest upon that amount and whether the creditor should take proceedings in the civil court to recover the interest or the company judge was competent to go into that question.

5. In our opinion, where the company judge was seized of the matter and when the liability to pay the principal debt had not been disputed by the company sought to be wound up and, in fact, paid up the debt in order to avoid winding-up, the forum of the company judge is the appropriate forum for determining as to whether the creditor was entitled to interest on the amount in question or not. The basic policy of law is to avoid multiplicity of litigation.

6. The learned counsel for the appellan