OFFICIAL RECEIVER, HIGH COURT Vs. RAO AND CO

JUDGEMENT

(1.) This is an application by the Official Receiver as Official Liquidator for directions regarding the payment of interest to the creditors of the company and the amount to be paid to the contributories of the company.

(2.) When this application first came before me, I directed notice to issue to the creditors, as I desired to give them an opportunity of being heard on the application as regards the payment of interest. One creditor has appeared and is represented before me by Counsel. This company is able to pay all its debts including in the case of those bearing interest, interest up to the date of payment. There is also sufficient to pay interest on the debts which do not carry interest, if such payment is permissible in law. The directions asked for by the Official Receiver are on this point and the question accordingly is whether a creditor of a company whose debt does not carry interest is, in any circumstances, entitled in winding up to payment of interest.

(3.) It has been held in England consistently since 1869 that, where a company in liquidation turns out to be solvent, creditors whose debts carry interest by agreement or otherwise, are entitled out of the surplus assets to payment of interest accruing after the commencement of the liquidation until payment is made. The doubt which the Official Receiver feels is as regards those creditors whose debts do not carry interest by agreement or otherwise and the creditor who is represented before me is a creditor of that class, his debt being an amount due in respect of professional services.