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Pay off creditors with interest, HC tells Shaw Wallace

Our Legal Correspondent

KOLKATA, Jan. 10

MR Justice Ronojit Kumar Mitra of the Calcutta High Court today directed Shaw Wallace & Co Ltd (SWC) to pay off the loan amount to its creditors with agreed interest up to December 1997, and simple interest at 12 per cent per annum till the loan amount i s fully liquidated.

The court further said the payment order was applicable to parties, who granted loan to SWC and also to the parties, who have filed winding-up applications in the court. The arguments pertaining to the case were concluded on September 4, 2000 and judgmen t kept reserved.

SWC raised the loan, for its own survival, from different corporate houses under an Inter-Corporate Deposit Scheme (ICDS). Hindustan Development Corporation Ltd (HDC), Kirloskar Finance & Investment Co Ltd (KFI), Peerless Abasan Ltd (ABL) and many other corporate bodies granted loans under ICDS, to SWC under valid agreements for repayment with accrued interest.

Majority of the creditors demanded their dues back, but SWC failed to repay these, triggering a host of litigations in the High Court for recovery of the loan amount. The said creditors, however, did not want to see SWC on the dock.

In the meantime, SWC filed a scheme in the court showing as to how the loan amount shall be paid back, and the matter went up to the Supreme Court. The SWC scheme was not approved by the apex court, and a fresh scheme was filed by SWC thereafter.

On April 12, 2000, the High Court directed SWC to calculate the interest amount payable to the parties and SWC assured the court full compliance of the order. But when this was not done, some creditors filed winding-up applications which were contested b y SWC, arguing that the creditors were interested to receive payment, and which it would make. HDC, KFI, ABL and many others agitated with confirmation to get back the dues owed by SWC with interest.

Mr Sudipta Sarkar, counsel for HDC and Mr Sanjib Bannerjee, counsel for KFI, argued that SWC was trying to scuttle the dispute by consuming time, which was objected to by Mr S.N. Mukherjee, counsel for SWC. However, by this order, the long-standing dispu te regarding repayment of ICDS loans appears to be over.

Earlier, Capsulation Services Ltd, a Mumbai-based inter-corporate depositor, claiming a sum of Rs 45 lakh, filed an application, asking for an order on special officers to disburse the entire amount lying with them to the creditors.