2004 (10) TMI 334 - HC - Companies Law

Summary

Issues:
Petition for winding up under Companies Act, 1956 due to outstanding payment.

Analysis:
The petitioner sought winding up of Payal Granites Private Limited under Companies Act, 1956, due to an outstanding amount of Rs. 1,50,000. The petitioner supplied diamond impregnated segments to the respondent-company and issued an invoice for Rs. 8,11,655, with a principal sum of Rs. 1,50,000 remaining unpaid. Despite acknowledging the debt, the respondent failed to pay, leading to dishonored cheques and subsequent legal notices. However, the petitioner failed to prove service of notice at the registered office of the respondent-company, a crucial requirement under section 434 of the Act, 1956.

The Court noted that the petitioner did not produce any document confirming the registered office of the respondent-company, casting doubt on the validity of the notice served. The notices were sent to the factory address of the company and its Director, not the registered office as required by law. As per section 434(1)(a) of the Act, 1956, a demand notice must be served at the registered office to establish the company's inability to pay its debts. Since proper notice was not served, the Court held that the petition did not meet the legal requirements for winding up under the Act.

The judgment emphasized that the petitioner's failure to serve a notice at the registered office of the respondent-company was a fatal flaw in the petition. Without complying with the statutory provisions of section 434, the Court could not grant the relief sought by the petitioner. As a result, the petition for winding up was dismissed, and any associated applications were also rejected. The Court clarified that the case did not fall under section 434(1)(c) of the Act, 1956, as it was not pleaded by the petitioner, leading to the ultimate failure of the petition.