In winding-up proceedings, interest on debts is limited to simple interest at the agreed rate until the winding-up order date, and 4% per annum thereafter. Compound interest is prohibited unless explicitly stipulated by contract or statute.

JUDGMENT :

Deepak Khot, J.

Pursuant to the order dated 18.8.2025, the matter is heard today on affidavit Document No.45/2024 and Document No.12469/2025, taking into consideration the direction of this Court for admission/winding up of the respondent company issued vide order dated 22.1.2019 and 27.9.2024.

2. Counsel for the respondent no.1 has pressed upon the affidavit to decide the issue of interest to be payable on the admitted amount of claim of secured creditor/petitioner.

3. Taking exception to OLR No.3/2024, learned senior counsel for the respondent/promotor has submitted that the interest is on a higher side which is not permissible as per Rule 156 of the Company (Court) Rules, 1959 (hereinafter referred to as 'the Rules') on the admitted claim of the secured creditor and it can only be charged maximum to the extent of 4% per annum simple interest as per section 156 and 179 of the the Rules.

4. The respondent/Promotor has filed an affidavit Document No.45/2024 in compliance of the order dated 27.9.2024 passed by this Court to deposit a sum of Rs.3 Crores with the Official Liquidator. It is stated that the Promotor has expressed his willingness to discharge debt/liability of the Company in liquidation from its own resources pursuant to the order of winding up dated 22.1.2019. It is submitted that as per order dated 9.7.2024 this Court has directed the Official Liquidator to disburse an amount of Rs.2 Crores to the petitioner Company. The same has been reported by the Official Liquidator through OLR No.3/2024. It is further submitted that as per OLR No.5/2022 it has been informed to this Court about the availability of Rs.2,66,79,196/- as against the sale proceeds of the plant and machinery of Rs.3.22 Lacs. As per OLR No.3/2024, Rs.2 Crores has been disbursed to the petitioner against a secured loan of Rs.3,90,00,000/-. It is submitted that the Official Liquidator has accepted the claim of the petitioner of Rs.5,23,38,300/- and out of claim amount of Rs.7,62,05,151/- claim of Rs.2,38,66,851/- has been rejected. The respondent has submitted objection that the amount of Rs.5,23,83,300/- which has been accepted, is not in accordance with Rules 156 and 179 of the Rules. It is further submitted that Rule 154 provides that the value of all debts and claims against the Company shall, as far as possible, is estimated according to the value thereof at the date of the order of the winding up of the Company. As observed hereinabove that such value of the debt against the petitioner/secured creditor has been found to be Rs.3,90,00,000/- by the order of winding up dated 22.1.2019 passed by this Court.

5. It is submitted that the petitioner had claimed monthly compounded interest and the OLR has accepted the claim of interest of the petitioner of Rs.1,33,38,300/- under Rule 154 of the Rules. It is submitted that no calculation and rate of interest for the accepted claim of interest of Rs.1,33,38,300/- for the period from 1.4.2016 till the date of winding up on 22.1.2019 has been disclosed by the Official Liquidator and, accordingly, erred in allowing the monthly compounding rate of interest exceeding 4% in violation of Rule 156 of the Rules. It is submitted that as per Rule 156 , interest on any debt or certain sum payable at a certain time or otherwise, whereon interest is not reserved or agreed for, and which is overdue at the date of winding-up order, or the resolution as the case may be, the creditor may prove for interest at a rate not exceeding 4%