GANGESHWAR LTD Vs. STATE

JUDGEMENT

(1.) SUDHIR Narain, J. M/s. Coal India Traders, the petitioner, has filed this petition for winding up of Gangeshwar Ltd. (hereinafter referred to as the Company) on the ground that the company is unable to pay its debt due against the petitioner. The petitioner was supplying hard coke/coal to the company for manufactur ing sugar. The modus operendi of the deal ings were that the respondent-company used to send purchase orders to the petitioner and against those orders sup plies were made by it. The last order was made on 27th March 1992 and the last supply was made on 25th June, 1992. The respondent-company, according to the version of the petitioner, from time to time admitted its liability for the payment to be made to the petitioner and the letters were written by it acknowledging the same. The Manager of the company wrote a letter dated 12-3-1993 to the petitioner confirming that sum of Rs. 12,75,338. 45 stands towards credit balance in the ac count of the petitioner as on 31-3-1990. Another letter was written by the General Manager on 8-10-1991 certifying that a sum of Rs. 43,40,221. 20 is standing in credit balance in the books of account of the petitioner as on 30th September, 1991 and the third letter in this respect is dated 29-8-1992, wherein it has been certified that sum of Rs. 43,39,567. 95 stands in the account of the petitioner in the books of the respondent-company as on 31-7-1992.

(2.) THE petitioner sent notice dated 28-9-1993 asking the company to pay sum of Rs. 64,95,860. 54 as due on 28-9-1993 including the amount of interest at the rate of 18 per cent on the principal amount. THE respondent-company did not reply to this notice but started making payments on different dates from 29-11-1993 to 8-4-1995 and paid total sum of Rs. 19,00,000/-, the details of which have been given as follows: Date Draft No. Amount 29. 11. 83 39 2,00,000. 00 29. 12. 93 75 2,00,000. 00 27. 10. 94 16 2,00,000. 00 14. 02. 94 17 2,00,000. 00 21. 03. 94 127 2,00,000. 00 26. 04. 94 279 2,00,000. 00 08. 07. 94 628 1,00,000. 00 30. 08. 94 802 2,00,000. 00 12. 11. 94 36 2,00,000. 00 13. 02. 95 52 1,00,000. 00 08. 04. 95 51 1,00,000. 00 19,00,000. 00 3. THE respondent-company after making the last payment on 8-4- 1995 stopped making payment. THE petitioner sent a notice dated 12-3-1996 demanding the balance amount of Rs. 53,32,457. 36 as due on 12-3-1996. THE respondent gave a reply on 22-5-1996 pointing out that the interest was not payable by it and that amount has wrongly been included in the demand notice. THE petitioner gave a second notice on 10-3-1997 pointing out the fact that there was an agreement to pay interest and further the liability was ac knowledged by it and there was a running account between the parties. THE respon dent-company again replied to this notice oh 1st April 1997 denying that there was a running account but the payments were made re-asserting to each supply separate ly and relating the fact that there was no agreement to pay the interest. THE last statutory notice was given by the petitioner under Section 334 of the Indian Companies Act on 23rd June 1997 calling upon the company to pay the amount claimed by it. THE respondent-company by its letter dated 2-7-1997 denied its liability to pay the sum. 4. THE respondent-company has filed counter-affidavit. It is admitted that the petitioner was making supply of hard coke/coal to it and the payments were released to the petitioners according to each supply separately. THE amount as claimed by the petitioner, was not paid for the reason that some of the supplies made by the petitioner being of sub-standard quality were rejected by the respondent- company and the same were taken back by the petitioner. THE petitioner did not give any credit of the rejected supply. Further, the petitioner did not comply with the terms and conditions of the purchase order in as much as there was considerable delay in making the supplies although in various purchase orders the delivery posi tion was mentioned as 'immediately'. In so far as payment of interest of the alleged delayed payment is concerned, the said condition was not there in most of the purchase orders and further there was no usage, custom or trade practice to pay in terest and, therefore, the petitioner was not entitled to payment of any interest whatsoever. THE learned Counsel for the respondent- company contended that as there is bonafide dispute as to whether the petitioner is entitled to claim the amount in dispute, the petition be not entertained. 5. It is settled law that whenever a winding up petition is filed on the ground that respondent-company failed to pay the debt payable to the petitioner, the Court will consider the defence taken by the respondent-company. If the Court finds that the dispute raised is bonafide, it will not allow the winding up petition. THE Supreme Court enumerated various rules in M/s. Madhusudan Gordhan Das and Com pany v. Madhu Woolen Industries (P) Ltd. , AIR 1971 SC 2600 to test bona fides of the dispute. Paras 20 and 21 of the said judg ment are relevant which read as under: "20. Two rules are well settled. First if the debt is bona fids disputed the Court will not wind up the company. THE Court has dismissed a petition for winding up where the creditor claimed a sum for goods sold to the company and the company contended that no price had been agreed upon the sum demanded by the creditor was unreasonable (See London and Paris Banking Corporation, (11874) 19 Eq. (sic) Again, a petition for winding up by a creditor who claimed payment of an agreed sum for work done for the company when the company con tended that the work had not been done proper ly was not allowed. (See Re. Brighton Club and Norrfolk Hotel Co. Ltd. , (1865) 35 Beav. 204 ). 21. Where the debt is undisputed the Court will not act upon a defence that the com pany has the ability to pay the debt but the company chooses not to pay that particular debt (See Re. A Company 94 SJ 369 ). Where however there is no doubt that the company owes the creditor a debt but the exact amount of the debt is disputed, the Court will make a winding up order without requiring the creditor to quantify the debt precisely (See Re. Tweeds Garages Ltd. , 1962 Ch. 406 ). THE principles on which the Court acts are first that the defence of the company is in good faith and one of substance, secondly, the defence is likely to succeed in point of law and thirdly the company adduces prima facie proof of the facts on which the defence depends. " 6. THE petitioner has to prove the debt. If the debt itself is not proved, the winding up petition cannot be allowed but if the assertion of debt is made, the Court will examine the defence raised against the claim of the petitioner. In Madhusudan's case three tests have been laid down (1) the defence of the company is in good faith and one of substance. (2) THE defence is likely to succeed in point of law. (3) the Company adduces prima facie proof of the facts on which the defence depends. It is clear that a mere denial of the claim in regard to debt against the company is itself not sufficient to refuse winding up on a petition filed by a creditor vide T. P. Sahu and Company (P) Ltd. In re. (1982) 52 Com pany Cases 182, Wasting House Saxy Farmer Ltd, In Re. (1982) 52 Company Cases 479, Smt. Madan Debi Kundalia v. Alpine Dairy Ltd. (1983) 54 Company Cases 41 and Softsule Private Ltd. , In re. P. G. Bhatia and Company v. Softsule (P) Ltd. , (1977) 47 Company Cases 438. 7. If a defence is raised by a company, the Court has to examine the correctness of the version taken in defence. THE Court while scrutinising the defence and the material on the record is in doubt as to whether the defence is bona fide or not, still the Court will not exercise its discre tion to wind up the company. A. N. Sen, J. in Ofu Lynx Ltd. v. Simon Carves India Ltd. , AIR 1970 Cal 418, considering this aspect made following observation: "if in particular cases the Court is in some doubt as to whether the disputes are bonafide or not and is not in a position to come to any definite conclusion that the disputes are mala fide and manufactured only to create a defence to the winding up petition, the Court may stay the winding up proceeding and relegate the parties to an action on terms as to security or other wise. In other words, in any case where the Court entertains some doubt as to the bonafide of the dispute sought to be raised and has suspicion about the true nature thereof, the Court may direct the company to furnish security to prove its bona fides and solvency and relegate the claimant to a suit on such security being fur nished and the Court may stay the winding-up proceeding. " 8. This observation was made in the context that whenever a defence is raised by a company, it will examine whether it is bonafide or not and while examining it, it will not only consider the nature of dispute raised but shall also consider all the facts and circumstances of the case namely, the conduct of the parties and other relevant factors. If after examining the entire facts and circumstances the Court still is in doubt as to whether the defence raised is bonafide or not, it will exercise its discre tion not to allow the winding up petition as it did not come to a definite conclusion as to whether the dispute is bonafide or not. THE Court, however, when finds that the dispute raised is not bona fide but it has been raised only to avoid stay of the wind ing up proceedings, it may not stay winding up proceedings. 9. In this case the defence plea raised by the petitioner raises two questions first ly, whether the supplies made by the petitioners were of sub-standard quality and were rejected by the respondent- com pany and such goods were taken back by the petitioner after its rejection and whether there was any delay in making the supply after receiving the purchase order by the petitioner from the respondent-company. THE second question is whether the respondent-company is liable to pay interest on all the amount due against it. 10. THE Court has to examine as to whether such defence is based on any prima facie evidence adduced by the com pany. In Wasting House Saxby Farmer Ltd. , (1982) 52 Company Cases 479, the petitioners' claim was that it was entitled to price of goods delivered to the respon dent-company in pursuance of the various orders placed by it. THE winding up peti tion was contested on the plea that the petitioner, in collusion and in conspiracy with the employees of the company, com mitted fraud upon the Company in delivering indigenous material although the contract was for sale of foreign made material. THE Court examined the matter and rejected the defence with the observa tion that there was no material whatsoever on which the defence can be accepted save and except in the affidavit it, where al legations were made against the petitioner-creditor. 11. In Straw Board Manufacturing Company Ltd. v. Maha Lakshmi Sugar Mills Company Ltd. , (1991) 71 Company Cases 544, wherein the facts were that the company entered into a contract for purchases of 100 trucks of a particular goods from the petitioner and the supply was made thereunder, the petitioner made a demand for payment of the price but when the amount was not paid, it filed the peti tion for winding up. THE Company took up the defence that the material supplied was sub-standard and decomposed. On scrutinising the facts it was found that the defence raised by the company was an after thought. THE defence was found to be false and the letters, on the basis of which the defence, was based, were found to be fabri cated just to raise a false defence. 12. In this case the modus operendi of dealings between the parties were that the respondent-company used to issue pur chase orders to the petitioner and on such purchase orders the supplies were made by it. THE petitioner has annexed various pur chase orders for the period running be tween the year 1990 to 27th March, 1992. It is not denied that these purchase orders were issued by the respondent- company. THE last purchase order is dated 27th March, 1992. THE contention of the respondent is that with regard to each of the purchase order, the payments were made but there is nothing to show that in respect of each purchase orders the pay ments were made. In Para 12 of the peti tion the petitioner has given the details of the payments of Rs. 19,00,000. 00 made by the respondent-company on various dates from 29-11-1993 to 8-4-1995 after receipt of the notice dated 29-9-1993 sent by the petitioners to the respondent-company. This indicates that the respondent com pany had not paid the amount separately for the supplies made to it on the basis of the purchase order. THE respondent-com pany has not furnished any documentary evidence or the details of the payments made in respect of each supply order. 13. THE petitioner has filed letter dated 12-3-1993 written by the Manager of the respondent-company asking for con firmation that a sum of Rs. 12,75,338. 45 stands credited in the account of the respondent-company as on 31-3-1990. Again a certificate dated 8-10-1991 was issued by the General Manager of the respondent-company certifying that sum of Rs. 43,40,221. 12 has been shown in the account books of the respondent-com pany as against the account of M/s Coal India Trader, the petitioner. THEre is another certificate dated 29-8-1992 pur porting to have been issued by the Manager of the respondent-company cer tifying that sum of Rs. 42,39,569. 95 is recorded in the books of the respondent-company in the account of the petitioner as on 31-7-1992. In paragraphs 8 and 9 of the counter-affidavit it is asserted that the confirmation letter and the certificates an nexed by the respondent company as An-nexurcs-4,5 and 8 in the petition, were not issued by the respondent- company. But there is no clear assertion as to who was. Manager of the Company at the relevant-time. In the counter-affidavit there is a vague assertion that it was not clear as to who signed the letters and in any case, no Manager was authorised to issue any con firmation letter or certificate. Paragraphs 8 and 9 of the counter-affidavit have been sworn on the basis of the perusal of record. THE affidavit has been filed by one VP. Ghuliayai who is a Group General Manager (Legal) of the respondent-com pany. He has no personal knowledge about the signature on the letters. THE petitioners had sent a notice dated 28-9- 1993 demanding sum of Rs. 64,95,850. 54 and in Paragraph 4 a reference has been made that up to 31- 3-1990 a sum of Rs. 12,75,338. 45 was lying outstanding against it and in paragraph 5 of the notice it has been stated that up to 25-6-1992 against the supply and purchase of coal a sum of Rs. 42,31,072. 95 was shown outstandingin the books of the account of respondent-company. THE respondent-company has not denied the receipt of this notice and after receipt of this notice, the respon dent-company instead of denying the claims made by the petitioner in the said notice, it continued to make pay ment for about two years between the period 29-11-1993 to 8-4-1995 and paid Rs. 19,00,000. 00. This belies the version of the petitioner that the payments were made separately with regard to each of the supply order and there was no amount due against it. THE respondent-company is admittedly maintaining the account books and it has not furnished its own balance sheets or any of the entries made in its own account referring to the purchase made by it from the petitioner and the payments made against those supplies. 14. THE version of the respondent-company that the petitioner had supplied sub-standard material or the supply was made not within a reasonable time in ac cordance with the terms and conditions of the purchase order, is an after thought. THE petitioner had sent a notice demand ing a sum of Rs. 64,95,850/ -. THE claim of the petitioner was not denied by the respondent-company. It was nowhere stated that the goods were of sub-standard quality and, therefore, they were rejected and subsequently they were taken back by the petitioner. Further, the petitioner sent notice on 12th March, 1996 after about three years when the respondent-company started making the payments, the respon dent- company gave a reply to the said notice on 22-5-1996 but in the said reply there was no assertion that the petitioner was not entitled to claim the amount as sub-standard goods by the respondent-company and were taken back by the petitioner. THEre was no allegation either that the goods were not supplied within the reasonable time on account of which either the goods were returned or it was entitled to damages for late supply on ac count of any loss suffered by it. THE petitioner has not annexed any document even in the counter-affidavit establishing that any of the goods received by it on a particular purchase order between the period 1990 to 1992 were of sub-standard quality and were rejected. THE respon dent-company did not deny the fact that it had issued purchase orders and on each of such purchase orders the supplies were made by the petitioner. I prima facie find that the assertion of the petitioner that the respondent-company is liable to pay the principal amount on the purchase of coke/coal from the petitioner is correct. THE petitioner has furnished the details in its own balance sheet, a copy of which has been annexed as Annexure-24 to the peti tion. It shows that the principal amount due was Rs. 23,31,072. 95. THE respondent-company has not filed copy of its own balance sheet. THE version otherwise also appears to be correct taking into account letters dated 31-3-1990, 8-10- 1991 and 29-8-1992 alleged to have been issued by the respondent-company. 15. THE respondent company in para graph 3 (vi) of the counter affidavit has pointed out certain discrepancies in regard to the amount mentioned in the various notices. It is contended that the petitioner in its balance sheet and the statutory notice has shown sum of Rs, 23,31,072. 95 due against respondent-com pany but if the total amount of Rs. 43,40,221/- as mentioned in the certificate dated 8- 10-1991 is accepted as correct, and after adjusting Rs. 19,00,000/-, it will be Rs. 24,4q,22l/ -. THE petitioner has shown the balance sheet of its own account. It is on less side than the amount mentioned in the certificate. THE certificate purported to have been issued on behalf of the respondent-company indicates about the entry made in the account book of the respondent-company. This will hardly make any difference as regards the claim made by the petitioner in regard to its principal amount of Rs. 23,31,072. 95. 16. Learned Counsel for the respon dent submitted that winding up petition should not be entertained merely because the company has failed to pay the amount claimed by the petitioner. It should not be a means to pressurise and coerce the com pany when the dispute can be agitated and decided. in appropriate forum. He has placed reliance upon the observation of the Supreme Court in Amlgamated Commercial Traders (P) Ltd. v. A. C. K. Krishnas-wami and others, (1965) 35 Company Cases 456, wherein the passage of the Buckley on the Companies Acts, 13th Edn. 451 was quoted with approval which reads as under: "a winding up petition is not a legitimate means of seeking to enforce payment of the debt which is bona fide disputed by the company. A petition presented obstensibly for a winding up order but really to exercise pressure will be dis missed, and under circumstances may be stig matized as a scandalous abuse of the process of the Court. At one time petitions founded on disputed debt were directed to stand over till the debt was established by action. If, however, there was no reason to believe that the debt, if established, would not be paid, the petition was dismissed. THE modern practice has been to dismiss such petitions. Hut, of course, if the debt is not disputed on some substantial ground, the Court may decide it on the petition and make the order. " THE above noted observation was made in the context that when the dispute is bona fide then the petitioner is not en titled to seek the remedy of recovery of the debt against a company. THE facts were that the petitioners were claiming that they were shareholders of the company and were entitled to payment of the dividend on the shares held by them. It was found that there was no declaration of dividend and no liability to pay dividend arose. THE cases where it is found that the defence raised is not bona fide, the com pany cannot lake a plea that the petition has been filed to seek the recovery of a debt which is disputed by the company. Clause (e) of Section 433 of the Com panies Act, itself provides that a company may be wound up by the Court if the com pany is unable to pay its debts. When the company is unable to pay its debt, Section 434 provides for certain presumptions against the company which read as under: "434. Company when deemed unable to pay its debts.- (1) A company shall be deemed to be unable to pay its debts- (a) if as creditor, by assignment or other wise, to whom the company is indebted in a sum exceeding five hundred rupees then due, has served on the company, by causing it to be delivered at its registered office, by registered post or otherwise, a demand under his hand requiring the company to pay the sum so due and the company has for three weeks thereafter neglected to pay the sum, or to secure or com pound for it to the reasonable satisfaction of the creditor; (b) if execution or other process issued on a decree or order of any Court in favour of a creditor of the company is returned unsatisfied in whole or in part; or (c) if it is proved to the satisfaction of the Court that the company is unable to pay its debts, and, in determining whether a company is unable to pay its debts, the Court shall take into account the contingent and prospective liabilities of the company. (2) THE demand referred to in clause (a) of sub-section (1) shall be deemed to have been duly given under the hand of the creditor if it is signed by any agent or legal adviser duly authorised on his behalf, or in the case of a firm, if it is signed by any such agent or legal adviser or by any member of the firm. " 17. Learned Counsel for the respon dent vehemently urged that the winding up petition should be allowed only when the Court finds that the company is com mercially insolvent. In other words, if the financial position of the company is sound and the amount of the debt can be recovered by the petitioner after. deter mination of the dispute by a competent Court of law or in appropriate forum, the Court should not pass an order of winding up of the company as it has serious conse quences. He has placed reliance upon the decision Punjab National Bank Modinagar, Ghaziabad v. Modinagar Ltd. Modinagar, Ghaziabad, (1997) 5 Company Law Jour nal 356 (Allahabad ). THE facts in this case were that the Punjab National Bank had sanctioned the loan and disbursed to the company. THE amount of the loan was not paid by the Company. It sent statutory notice to the principal borrower company as well as to the two guarantor companies calling upon them to pay the outstanding dues. In the mean time, the principal bor rower company became a sick undertaking and the B. I. F. R. recommended for winding up of the said company under Section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985. THE appellate authority in appeal stayed the operation of the recommendation made by the BIFR. THE Court considering the circumstances and equity, decided not to wind up the com pany and in that context, it made an obser vation that the Court is to pass an order for winding up, after examining the commer cial solvency of the company. THE inability to pay a debt under Section 433 of the Companies Act, 1956 should be taken in a commercial sense. THE Court relied upon the following observation made by the ' Supreme Court in Pradeshiya Industrial and Investment Corporation of U. P. v. North India Petro Chemicals Ltd. and another, 1994 (3) Supreme Court Cases 348: "what then is inability when the section says "unable to pay its dues"? That should be taken in the commercial sense. In that, it is unable 10 meet current demands. As stated by William James, VC. It is "plainly and commercially insol vent-that is to say, that its assets are such, and its existing liabilities are such, as to make it reasonably certain-as to make the Court feel satisfied that the existing and probable assets would be insuffi cient to meets the existing liabilities". (In European Life Assurance Society Re. , W Krish na Iyer and Sons v. New Era Mfg. Co. Ltd.) 18. THE petitioner therein claimed winding up on the basis of an agreement. THE defence raised was that the agreement on which the claim was based, was itself cancelled and there was no debtor and creditor relationship between the petitioner and the company. THE Supreme Court found that the defence raised was substantial one and not mere moonshine and there was no relationship of creditor and debtor. This case nowhere lays down that if the respondent-company is able to pay its debt, the winding up petition will not be allowed only because of its financial stability. 19. In another case Alliance Credit and Investment Ltd. v. Khetan Hoston Spinels Ltd. , (1997) 3 Company Law Jour nal 200, it was observed that the purpose of Section 434 (l) (e), read with Section 433 (l) (e) is to determine the basic (sic) or commercial solvency of the company and for that purpose the Court has to examine the company's inability to pay its debt with reference to the date when it becomes ab solutely due for payment along with con tingent and prospective liability of the company. 20. In cases where a company is com mercially solvent but it deliberately or negligently fails to pay the amount or the debt, Section 434 (a) lays down that a com pany shall be deemed to be unable to pay its debt if a creditor, by assignment or otherwise, to whom the company is in debted in a sum exceeding five hundred rupees then due, has served on the com pany, by causing it to be delivered at its registered office, by registered post or otherwise, a demand requiring the com pany to pay debt the same so due and the company thereafter neglected to pay the sum, or to secure or compound for (sic) to the reasonable satisfaction of the creditor. This provisions will be redundant if the only defence is taken that the company is commercially solvent and is able to pay the debt, but it does not choose to pay the amount for the reason that it is disputed. THE commercial solvency itself cannot be treated as defence for rejecting a winding up petition. THE Company has statutory responsibility to maintain the accounts of Company, balance sheet and should have confidence of the creditors, secured and unsecured, as well as of the shareholders. In Mis Madhusudan Gordhan Das v. Madhu Woolen Industries (P) Ltd. , AIR 1971 SC 2600, such defence was held not permissible. It was observed: "where, however, there is no doubt that the company owes the creditor a debt entitling him to a winding up order, but the exact amount of the debt is disputed, the Court will make a winding up order without requiring the creditor to quantify the debt precisely. " 21. THE commercial solvency of a company may be relevant factor while ex ercising the discretion by the Court while refusing to wind up the company as the power conferred on the Court to wind up a company is discretionary. THE discretion should, however, be judicial one. In Aluminium Corporation of India Ltd, and another v. Mis Lakshmi Ratan Cotton Mills Company Ltd. and others, AIR 1970 All 452, Hon'ble M. H. Beg, J. (as he then was) pointed out that the power to wind up is discretion ary but it has to be exercised judicially and made the following observation. "although the power to wind up is discre tionary, it has to be exercised judicially. This means that it is only where the balance of equi ties is shown by a petitioner to tilt appreciably in favour of winding up order that it will be made "ex debito justitiae. " It is in this special sense that a petitioner relying on grounds contained in Section 433 can get a winding up order as a matter of right. It is issued as a matter of right when he proved contents of the right produce a compelling effect. It is not granted mechanically as a matter of course on proof of certain facts. In other words, equitable considerations have a decisive effect even when the powers to wind up a company is invoked under a clause of Section 433 other than the general just and equitable Cl. (f ). THE provisions of Section 434 (1) determina tion the requirements of Section 433 (e) will be deemed to be fulfilled, but they do not lay down when a winding up order must necessarily be passed. It is true that a creditor is not bound to wait and give time to the company beyond the time prescribed after the statutory notice, before filing his petition. But the Court may, if there are sufficient counter- balancing equitable grounds, deny an immediate winding up order, or, in appropriate cases, even refuse it al together in spite of the proved inability of a company to pay its debts. Exercise of such dis cretionary power must necessarily be governed by justice and equity. " 22. It is true that the advertisement under Rule 24 of the Companies Court Rules 1959 will have adverse effect on the company, its shareholders, stock market and the financial institutions. But when the company knows its consequences and takes a defence which is not found bona fide by the Court, it should pay the amount. It will be no defence that after winding up the company, it will not be able to function and possession of its assets shall be taken by the Official Liquidator under the orders of the Court. THE company being finan cially solvent is to pay the debt if it is found by the Court that the defence raised by it is not bona fide. 23. Another controversy is in regard to the liability of the respondent-company to pay 18 per cent interest on the principal amount due against the petitioner for supply of the goods. THE petitioner has relied upon the various purchase orders wherein there is a note-"as agreed, pay ment within one week from receipt of total consignment otherwise interest will be paid at 18 per cent per annum. " This en dorsement is on the purchase orders dated 27-3-1992, 7-2-1991, 25-2-1991, 6-5-1991, 20-11-1991, 31-10-1991, 6-2-1992 and 29-1-1992. In paragraph 5 of the counter af fidavit it has been stated "in so far as pay ment of interest on alleged delayed pay ment is concerned, the said condition was not there in most of the purchase orders. " It is true that in various purchase orders this condition was not written but in some of the purchase orders it was written. I prima facie find that in view of these docu ments the respondent company is liable to pay interest at the rate of 18 per cent on the principal amount of Rs. 23,31,072. 95. THE petitioner, in paragraph 8 of the notice dated 8-1-1998, stated that "a sum of Rs. 23,31,072. 95 has been due to my client from you since 8-4-1995. " THE respondent-company is liable to pay interest on this amount at the rate of 18 per cent with effect from 8-4-1995 till the date of the filing of this petition on 9- 4-1998 i. e. , sum of Rs. 12,58,830. 00. 24. In view of the above discussion the petitioner is granted one month time to pay sum of Rs. 23,31,072. 95 by a Bank Draft to the petitioner. As regards inter est, the respondent-company is directed to deposit fixed deposit receipt for a period of one year of Nationlised Bank bearing interest in the name of Registrar of this Court within two months from today for a sum of Rs. 12,58,830. 00. 25. THE respondent-company may file a suit for declaration in respect of the amount of interest within a period of one month from today. THE petitioner shall be entitled to withdraw the amount with in terest only in terms of the judgment in the suit which may be filed by the respondent-company against the petitioner. It is, how ever, made clear that the respondent-com pany may file suit not only with regard to the interest but other disputed amount also. THE suit will be decided on evidence produced by the parties and any observa tion made in this order will not taken as conclusive by the Court deciding the suit. 26. In case the respondent-company fails to comply with this order within the time granted, the petition shall be ad mitted and advertised under Rule 24 of the Companies (Court) Rules 1959. 27. List for orders immediately after the expiry of two months. .