2003 (2) TMI 324 - HC - Companies Law

Summary

Issues Involved:
1. Application to recall ex parte winding-up order.
2. Validity of service of statutory notice and substituted service.
3. Legitimacy of the loan agreement and authority of the director.
4. Frequent changes in the registered office of the company.
5. Knowledge and avoidance of winding-up proceedings by the respondent-company.

Detailed Analysis:

1. Application to Recall Ex Parte Winding-Up Order:
The application was filed to recall the ex parte order dated 9-8-2002, which wound up the company due to its failure to pay Rs. 23,81,400. The respondent-company argued that the registered office was at a different address than where the notice was sent, and the directors were unaware of the proceedings due to limited circulation of the newspapers used for publication.

2. Validity of Service of Statutory Notice and Substituted Service:
The petitioners sent statutory notices to the registered office at New Colony, Aam Ghat, Ghazipur, and the previous address at 14/44 Prag Narain Road, Lucknow. Notices were returned unserved, leading the Court to permit substituted service through publication in the 'Pioneer' and 'Aaj' newspapers. The Court deemed the service sufficient after multiple attempts and publications. The respondent-company claimed the notices were not received due to incorrect addresses and limited newspaper circulation.

3. Legitimacy of the Loan Agreement and Authority of the Director:
The respondent-company contested the loan agreement dated 28-3-2000, arguing that the director, Mr. Raj Narain Singh, was not authorized to sign on behalf of the company. However, it was not denied that the loan amount was credited to the company's account. The Court found that Mr. Raj Narain Singh, being a director, could represent the company and bind it to the loan agreement.

4. Frequent Changes in the Registered Office of the Company:
The company frequently changed its registered office, which complicated the service of notices. The registered office was shifted from 14/44, Prag Narain Road, Lucknow, to New Colony, Aam Ghat, Ghazipur, and later to Englishia Line, Varanasi. The Court noted that the company did not inform the creditors about these changes, and the changes were registered after the winding-up order was passed.

5. Knowledge and Avoidance of Winding-Up Proceedings by the Respondent-Company:
The Court found that the respondent-company had full knowledge of the winding-up proceedings but deliberately avoided service. The application to recall the order was filed promptly after the winding-up order was made, indicating awareness of the proceedings. The Court dismissed the recall application, concluding that the company was served appropriately and had knowledge of the winding-up process.

Conclusion:
The application to recall the winding-up order dated 9-8-2002 was dismissed. The Court found that the statutory notices and substituted service were valid, the loan agreement was legitimate, and the frequent changes in the registered office did not affect the validity of the winding-up proceedings. The respondent-company had knowledge of the proceedings and deliberately avoided service.