Premier Industries vs Anusha International Ltd.

R. Jayasimha Babu, J.—Counsel says that the respondent has paid the principal amount due, but asserts that the company will have to be

wound up for non-payment of interest thereon. I see no justification for accepting such a request. The company has demonstrated its ability to pay,

by making the payment of principal. Dispute regarding interest is a matter which the petitioner should pursue in the proper civil court. Counsel relies

on the judgment of this court in the case of Rashid Leathers (P.) Ltd. v. Super Fine Skin Traders [1990] 68 Comp Cas 684 in which it is held that

the company court has to adjudicate the inherent power. The exercise of such a power is a matter of discretion. I do not find it necessary to hold a

trial in this case, with a view to arrive at the amount of interest or the rate at which, it should be assessed to the petitioner.

The proceedings for winding up is a serious one concerning the very survival of the company and such survival is not to be judged on the

strength of its inability to pay the interest, which it may dispute for the time being, when its ability to pay has been amply demonstrated by the

payment of principal that is due. The winding up is not a substitute for recovery of the moneys due to a creditor by the normal method available to

such a creditor, namely, by way of instituting a civil suit in the trial court. The winding up is meant for the benefit of all creditors, and is to be

granted only when the financial condition of the company and other factors justify winding up.

The creditors are under the misconception in seeking a winding up as a substitute for normal action in the civil court for recovery of moneys due

to them. Assertions for payments of interest at the rate at which they claim to be paid is largely the basis of such a misconception. Wherever there

is dispute which can be regarded as bona fide and wherever the company has demonstrated its ability to pay, there is no reason at all to hold that

such a company is unable to pay its dues on the only ground that interest as claimed is not paid.

Leaving it open to the petitioner to take recourse to other civil remedies for recovery of interest, if any, that may be due in its perception, the

petition is closed.

Witness, the honourable Thiru Konakuppakattil Gopinathan Balakrishnan, the Chief Justice at Madras aforesaid, this September 17, 1999.