M/S. VIJAY INDUSTRIES versus M/S. NATL TECHNOLOGIES LTD.

M/S. VIJAY INDUSTRIES versus M/S. NATL TECHNOLOGIES LTD.

Interest payable on sum due can constitute 'debt' for winding up petitions under Companies Act if principal liability is admitted and there is an agreement (express or implied) to compensate by way of interest; winding up cannot be declined merely because the quantum of debt is debated or part remains disputed.

Parties
Appellant: M/s. Vijay Industries; Respondent: M/s. Natl Technologies Ltd.
Jurisdiction
India
Judgment Date
17 December 2008
Procedural Posture
Civil Appeal / Final Judgment
Outcome
appeal allowed, High Court judgment set aside
Legal Topics
Winding Up, Interest on Delayed Payment
Company Law Winding Up Interest on Delayed Payment

Case Brief

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Parties

M/s. Vijay Industries

Appellant

M/s. Natl Technologies Ltd.

Respondent

Procedural Posture

Civil Appeal / Final Judgment

Legal Issues

  1. 1 Whether interest payable on the sum due would be a 'debt' so as to attract ss. 433 and 434 of Companies Act, 1956

Ratio Decidendi

Interest payable on sum due can constitute 'debt' for winding up petitions under Companies Act if principal liability is admitted and there is an agreement (express or implied) to compensate by way of interest; winding up cannot be declined merely because the quantum of debt is debated or part remains disputed.

Court Disposition

appeal allowed, High Court judgment set aside

Orders

  • Respondent to pay simple interest on admitted sum at 12% per annum on balance amount within eight weeks from date amount became due, failing which legal consequences shall ensue.
  • No costs.