VIJAY INDUSTRIES Vs. NATL TECHNOLOGIES LIMITED

JUDGEMENT

(1.) LEAVE granted.

(2.) WHETHER interest payable on the sum due would be a debt so as to attract the provisions of Sections 433 and 434 of the Companies Act, 1956 is the question involved herein.

(3.) APPELLANT is said to have adjusted the amount first towards interest at the stipulated rate and balance against the principal amount. As despite demand the amount due and owed to it was not paid by the respondent, a legal notice was served upon it claiming interest on the said sum. It was stated that the appellant had appropriated account of payments made by it against the interest and balance, if any, against the principal amount. On the basis thereof, a demand for a sum of Rs. 64,58,457/- together with future interest at the rate of 2% per month was raised. The said legal notice was replied by the respondents, stating: "we have received a legal notice from Sri Rao raghunandan, Advocate dt. 06. 01. 2003. You are aware that after making payment of Rs. 10. 00 lakhs towards Castor Oil Supplies to our plant, we have received a notice under Section 226 (3) of the income Tax, 1961 from the Income Tax department. As per the notice, we are directed to pay the amounts due to you on account of Castor oil supplied directly to the department in view of your dues to the department to an extent of Rs. 25,43,737/ -. Subsequently, we have paid by way of cheques to Income Tax Officer Ward-8 (3) on account of supply of castor oil as detailed below:- <FRM>JUDGEMENT_2089_TLPRE0_2008Html1.htm</FRM>