2000 (11) TMI 1145 - HC - Companies Law

Summary

Issues Involved:
1. Whether the respondent-company received proper service of the petition and accompanying documents as per the Companies (Court) Rules, 1959.
2. Whether the petition should be dismissed due to alleged procedural defects in service.
3. Whether the respondent-company owes the petitioner the claimed debt.

Issue-wise Detailed Analysis:

1. Proper Service of Petition and Accompanying Documents:
The respondent argued that it received only the petition without the necessary affidavit and material papers as required under Rule 21 of the Companies (Court) Rules, 1959. The respondent claimed that the petition was not served in the form prescribed by Rule 27 and lacked proper information. The court examined the scheme of the Companies (Court) Rules, 1959, and noted that Rule 21 mandates every petition to be verified by an affidavit filed along with the petition. Rule 26 requires service of the petition on the respondent, and Rule 27 stipulates that the notice should be in Form No. 6. The court found that the rules distinguish between petitions and affidavits, and Rule 26 mandates only the service of the petition, not the affidavit. Therefore, the court concluded that the service of the petition without the affidavit did not violate the rules.

2. Dismissal of Petition Due to Procedural Defects:
The respondent contended that the petition should be dismissed under Rule 31 of the Companies (Court) Rules, 1959, due to non-compliance with the service requirements. The court referred to the Supreme Court's decision in A. Madan Mohan v. Kalavakunta Chandrasekhara, which held that non-service of certain documents did not warrant dismissal if the essential requirements were met. The court emphasized that the procedure of issuing notice before admission is discretionary and aimed at resolving disputes efficiently. The court observed that the respondent, despite being aware of the petition, chose to raise procedural objections instead of seeking the missing documents from the petitioner or the court. Consequently, the court found no substantial defense from the respondent and decided not to dismiss the petition based on procedural defects.

3. Debt Owed by Respondent-Company:
The petitioner claimed that the respondent-company owed Rs. 5,89,963 as of 31-3-2000, advanced as an inter-corporate deposit. The petition was supported by a letter from the respondent requesting the deposit, a demand promissory note, and a receipt acknowledging the amount. The court found prima facie evidence supporting the petitioner's claim. Consequently, the court admitted the company petition and ordered the publication of the petition as required under Rule 99 of the Companies (Court) Rules.

Conclusion:
The court admitted the company petition for winding up the respondent-company based on the prima facie evidence of the debt owed. The procedural objections raised by the respondent were dismissed as they did not warrant the dismissal of the petition. The court ordered the publication of the petition in specified newspapers.