SUDHIR NARAIN, J. - (1.) The core question in this Special Appeal is as to whether the respondent having paid the pricinpal amount as claimed by the appellant in the Company petition for winding up the respondent company, is entitled to the interest on such amount. The facts in brief are that the appellant filed Company petition for winding up the respondent company under Section 433 (e) of the Companies Act 1956 (hereinafter referred to as 'the Act').
(2.) The allegation of the appellant was that the respondent company was incorporated as a private limited company in the year 1977. It became a public limited company on 5-10-1982. Its object was to manufacture allopathic medicines, dry syrups, tablets, capsules, ointments and oil syrups etc. In April-May 1984, the company was in the process of making public issue of its shares. It appointed the State Bank of India as the merchant bankers for the purpose of carrying out the public issue. It thereafter entered into an agreement with the appellant and certain other agencies for handling various works in co-ordination with the State Bank of India in connection with above public issue. The appellant was engaged to render certain advertising and publicity service in connection with the public issue of the shares of the company. It incurred the expenses in making advertisement of the public issue. The company had paid only sum of Rs. 75,000.00 as an advance before the public issue was advertised. It was liable to pay balance amount of Rs. 2,22,289-23 p. The letters were sent for payment of the balance amount but that remained unpaid. A notice under Section 434 of the Act was given to the respondent for payment of Rs. 2,22,289-23p. with interest at 18% with effect from 1/06/1984. The respondent sent a reply requesting to settle the accounts. A reply was sent by the appellant to the respondent on 7-7-1985. As the payment was not made, the appellant filed the Company petition No. 11 of 1985 on 29-8-1985.
(3.) In the company petition the respondent filed a counter affidavit denying its liability. The appellant filed a rejoinder affidavit.;