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2004 (10) TMI 349 - HC - Companies LawWinding up - company unable to pay its debts - Service of statutory notices at the registered office of the Company - Merger of statutory notices and its impact on the maintainability of the petition - Discrepancy between the amounts claimed in the statutory notices and the petition - HELD THAT - It is the company s case that its registered office is at Mahalaxmi. This contention is not well founded. Even assuming it is it does not provide a defence to the petition for a statutory notice was also served at the Mahalaxmi office. The statutory notice dated 8th March 2000 was served at the Khar office which is in fact the registered office of the company. Mr. Shah however submitted that it is not. He founded this submission on the fact that the Company had filed form 18 on 11th March 1995 changing the situation of the registered office from Khar to Mahalaxmi. Admittedly however in the record of the Registrar of Companies the office at Khar is shown to be the registered office of the Company. Admittedly further no change has been effected pursuant to the notice. In that view of the matter the registered office of the Company remains as disclosed in the records of the Registrar of Companies. The judgment in K. Bhaskaran v. Sankaran Vaidhyan Balan 1999 (9) TMI 941 - SUPREME COURT would apply to a notice u/s 434(1)( a ) of the Companies Act with greater force. Section 138 of the Negotiable Instruments Act entails criminal consequences whereas section 434(1)( a ) involves only civil consequences. Moreover the requirements of a notice u/s 138 of the Negotiable Instruments Act are stricter and wider. Despite the same the Supreme Court held that a person who properly addresses a notice and mails it would be deemed to have fulfilled his obligation of sending the notice even if the same is returned unclaimed. On a parity of reasoning it must be held that a notice though returned unclaimed if duly mailed by registered post addressed to the registered office of the Company must be deemed to have been delivered within the meaning of that expression in section 434(1)( a ) of the Companies Act. The first contention that no statutory notice was delivered at the registered office of the company is rejected. The doctrine of merger which applies to decrees of trial courts qua those of the appellate court cannot possibly apply to statutory notices under section 434(1)( a ). There is neither any reason nor purpose that supports such a view. In the circumstances I see no reason why the Petition cannot validly be based on the first statutory notice dated 14th October 1999 though it was succeeded by two other notices. The subsequent notices did not have the effect of rendering it invalid or no longer effective. The Petition is therefore maintainable based on the statutory notice dated 14th October 1999. Even assuming that the amount claimed in the petition is erroneous it would make no difference so long as the petitioner is found to be a creditor for a sum which would entitle him to a winding up order. The difference in the amount mentioned in the notice dated 14th October 1999 and the amount stated in the Petition is on account of the petitioner having given credit for the part payment of Rs. 46, 83, 757. In other words according to him if on receipt of a statutory notice for a certain amount a company makes part payment of a mere pittance another statutory notice would be required before filing a petition stating therein only the balance amount due. To accept this submission would lead to an absurdity and frustrate any petition under sections 433 and 434 of the Companies Act. This is established by an illustration I furnished during the course of argument. If his argument is accepted the company could again frustrate the filing of a winding-up petition by paying a mere fraction of this balance amount. This could go on ad infinitum rendering the filing of a winding up petition impossible and the provision of the sections 433 and 434 otiose. The argument is therefore rejected. The company had not suggested what according to it is the value of the credit notes. Even upon the receipt of the statutory notice dated 8th March 2000 which stated that an amount of Rs. 10, 19, 485 was due to be adjusted towards the credit notes the company never disputed that the figure is absurd or unfair. Indeed in this view of the matter the entire claim of the petitioner stands established. In any event in the circumstances there can be little if any doubt that an amount in excess of Rs. 500 is due. Thus passed the order accordingly - ( i )The company is directed to deposit Rs. 1, 00, 00, 000 within twelve weeks from today. It is clarified that this would be in addition to the amounts already deposited. ( ii )In the event of the amount being so deposited and in the event of the petitioner filing a suit for recovery of the amount claimed in the petition within eight weeks of such deposit being made the amount shall stand transferred to the credit of the suit. In the event of the suit not being so filed the amount shall be returned to the Company. ( iii )In case of failure on the part of the Company to deposit the aforesaid amount the Petition shall stand admitted and shall be advertised in the Free Press Journal Navshakti and Maharashtra Government Gazette. ( iv )The petitioner shall deposit an amount of Rs. 2, 000 with the Prothonotary and Senior Master of this Court within four weeks from the date of default towards the cost of advertisement. ( v )In view of the fact that a sum of Rs. 15, 50, 000 is admittedly due and payable the petitioner is at liberty to withdraw the same with accretions thereto if any after a period of twelve weeks from today. This amount shall not be refundable in any circumstances as it is an admitted amount. ( vi )The operation of this order is stayed for a period of twelve weeks from today to enable to the Company to carry the matter higher.
Issues Involved:
1. Service of statutory notices at the registered office of the company. 2. Effect of subsequent statutory notices on the efficacy of the initial notice. 3. Discrepancy between amounts claimed in statutory notices and the petition. 4. Actual amount due and payable by the company. Summary: Issue I: Service of Statutory Notices The petitioner addressed three statutory notices dated 14th October 1999, 8th March 2000, and 21st July 2000. The first notice was served at the Pune and Mahalaxmi offices, the second at the Pune and Khar offices, and the third at the Pune office. The company contended that its registered office was at Mahalaxmi, but the court found this contention unfounded. The registered office remained as per the records of the Registrar of Companies, which was Khar. The court held that a notice returned as unclaimed is presumed to have been served, citing K. Bhaskaran v. Sankaran Vaidhyan Balan AIR 1999 SC 3762. Issue II: Effect of Subsequent Notices Mr. Shah argued that the initial notice dated 14th October 1999 lost its efficacy due to subsequent notices and part payments. The court rejected this argument, stating that there is no doctrine of merger applicable to statutory notices u/s 434(1)(a) of the Companies Act. The petition can be based on the first statutory notice despite subsequent notices. Issue III: Discrepancy in Amounts Mr. Shah submitted that discrepancies between amounts claimed in statutory notices and the petition render the petition non-maintainable. The court found this submission unfounded, referencing Pfizer Ltd. v. Usan Laboratories P. Ltd. [1985] 57 Comp. Cas. 236 and Tata Finance Ltd. v. Kanoria Sugar & General Mfg. Co. Ltd. 2002(1) Mh.L.J. 6171. The court held that a petition is maintainable as long as the petitioner is a creditor for a sum exceeding the statutory limit. Issue IV: Actual Amount Due Mr. Shah claimed that only Rs. 15,00,000 was due, with the balance being adjusted for price differences. The court noted that the company never disputed the petitioner's suggestion of withholding Rs. 15,00,000 as too low. The court concluded that an amount in excess of Rs. 500 is due, thus establishing the petitioner's claim. Order: 1. The company is directed to deposit Rs. 1,00,00,000 within twelve weeks. 2. If the petitioner files a suit within eight weeks of the deposit, the amount will be transferred to the suit's credit; otherwise, it will be returned to the company. 3. Failure to deposit will result in the petition being admitted and advertised. 4. The petitioner to deposit Rs. 2,000 for advertisement costs within four weeks of default. 5. The petitioner may withdraw Rs. 15,50,000, an admitted amount, after twelve weeks. 6. The order is stayed for twelve weeks to allow the company to appeal.
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