Case: M/s. Hind Paints &amp; Chemicals Vs. M/s. Accurate Transformers Ltd

It appears that on being provisionally appointed the Official Liquidator went to the premises of they to take possession thereof. Thereafter, the respondent filed an application before the Company Judge for recalling the order of appointment of the Official Liquidator on the ground that they had already paid the principal amount and that only the question of interest remains to be decided. The matter was heard by the Company Judge, who also recorded the said fact and having regard to the provisions of the Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, directed the respondent to pay to the appellant interest on the principal amount @ 9 per cent per annum, with liberty to the appellant herein, to move the civil court in order to establish its claim under the provisions of the aforesaid Act. An appeal was preferred by the respondent herein before the Division Bench, which modified the order of the learned Company Judge by withdrawing the leave granted to the appellant to move the civil court for claiming higher interest.

Court's reasoning:
Having heard learned counsel for the respective parties, we are of the view that the Division Bench committed an error in withdrawing the liberty which had been granted by the learned Company Judge, to approach the civil court, having particular regard to the provisions of Section 4 of the aforesaid Act of 1993.