Post-winding up interest on debts is not admissible under the Companies (Court) Rules; claims must be quantified as of the winding up date.

Order

02/02/2024

1. The instant application has been preferred by the applicant- Bank under Rule 9 of the Companies (Court) Rules, 1959, after having been aggrieved of the rejection of the notice of proof of debt dated 17.07.2020, by the learned Official Liquidator, whereby the claim of the petitioner to the tune of Rs. 73,06,424.82 has been turned down.

2. Learned counsel for the applicant-Bank, Mr. Yash Sharma, has submitted that the State Bank of Patiala (hereinafter, erstwhile-Bank) merged into the State Bank of India (hereinafter, applicant-Bank) in the Year 2017, on account of which, the latter derived all the rights and liabilities of the erstwhile-Bank. Having established the fact of the said merger, learned counsel averred that the erstwhile-Bank filed an Original Application against the respondent-Company before the Debt Recovery Tribunal, Jaipur (hereinafter, DRT) on 06.09.1999. The DRT vide judgement and recovery certificate dated 18.06.2011, allowed the claim of the erstwhile-Bank to the tune of Rs. 79,42,711.94/- along with simple interest @ 12% p.a. payable from the date of application till the date of recovery.

3. It was further argued that the erstwhile-Bank in the Year 2009 filed S.B. Company Petition No. 03/2009 titled as ‘State Bank of Patiala vs. M/s Raunaq Finance Limited under Section 439 read with Section 433 (e) (f) and (i) of the Companies Act, 1956 (hereinafter, Act of 1956) before this Court, seeking winding up of the respondent- Company. Thereafter, vide order 28.07.2011, the said petition was allowed and resultantly, the respondent-Company was ordered to be wound up. The Official Liquidator attached to the Court was appointed as the Official Liquidator of the respondent-Company.

4. Learned counsel further contended that in pursuance to the said order of winding up, the Official Liquidator on 18.11.2015 issued a notice to the erstwhile-Bank, under Form No. 64 in terms of Rule 148(2) of the Companies (Court) Rules, 1959 (hereinafter, Rules of 1959) to prove its debt. Consequently, the erstwhile-Bank submitted the affidavit of proof of debts as per Form No. 66 inter-alia claiming an amount of Rs. 79,42,711.94 along with future interest @ 12% p.a. in terms of the DRT order dated 18.06.2001. Thereafter, time and again, the Official Liquidator sought certain information/documents from the erstwhile- Bank, which were duly provided.

5. In this background, learned counsel for the applicant-Bank submitted that the Official Liquidator vide notice of admission of proof of debt dated 17.07.2020, allowed the claim of the applicant-Bank to the tune of Rs. 1,76,79,752/- only. The said amount included the principle amount of Rs. 79,42,711.94/- along with interest from the date of judgement till the date of winding up order including the expenses. The Official Liquidator however, rejected the claim of Rs. 73,06,424.82/- vide notice to rejection of proof of debt dated 17.07.2020 on the specific ground that the said amount is pertaining to interest for the post winding up period and the same is not admissible under the provisions of Section 529/530 of the Act of 1956. Therefore, being aggrieved of the said rejection of claim to the tune of 73,06,424.82, the applicant-Bank has filed the instant Original Application.

6. In order to repudiate the ground adopted by the Official Liquidator whilst rejecting the applicant-Bank’s claim as noted above, learned counsel put forth the following arguments:-

6.1 That the Official Liquidator did not award interest to the applicant- Bank which was due in terms of the order of the DRT dated 18.06.2011, which categorically spells out that interest shall be applicable at the @ 12% p.a. from the date of filing of the application before the DRT till the date of recovery.

6.2 That post the passing of the winding up order dated 28.07.2011, the applicant-Bank has not been awarded any interest and the rejection thereof, in spite of having remained in surplus, is erroneous and bad.

6.3 That the notic