2009 (12) TMI 516 - HC - Companies Law

Winding up petition - Held that - The Delhi High Court in Hotline Teletubes & Components Ltd. case 2003 (7) TMI 572 - HIGH COURT OF DELHI held that the documents which were placed on the record indicated that the petitioner had sent the statutory notices to the Company at the address at which the Registered Office was located. In the meantime the Company changed the address of its Registered Office as a result of which the statutory notices were not served. The Court held that sending of the notices by the petitioner at the Registered Office of the Company in terms of the official records had to be regarded as legal and valid and the proceedings could not be held to be not maintainable because the Company had in the meantime changed its office. There is therefore no merit in the submission in regard to the maintainability of the Petition for want of a statutory notice under section 434(1)(a). Thus the Company Petitions are admitted. The petitioner shall advertise the Petitions in two local newspapers viz. Free Press Journal and the Maharashtra Times besides the Maharashtra Government Gazette. The petitioner shall deposit Rs. 10, 000 with the Prothonotary and Senior Master towards the publication charges within a period of three weeks with intimation to the Company Registrar failing which the Petitions shall stand dismissed for non-prosecution.

Issues Involved:
1. Whether the petitioner is a contributory entitled to present a petition for winding up under Section 439(4)(b) of the Companies Act, 1956.
2. Whether the petitioner has a valid claim for winding up the company under clauses (c), (e), and (f) of Section 433 of the Companies Act, 1956.
3. Whether the statutory notice for winding up was validly served.

Issue-wise Detailed Analysis:

1. Contributory Status under Section 439(4)(b):
The petitioner, a UK-based company, claimed to be a contributory of Polaris, asserting an entitlement to 50% of its share capital based on agreements and board resolutions. However, the petitioner was not registered as the owner of the shares in Polaris. Section 439(4)(b) stipulates that shares must either be originally allotted, held and registered for at least six months during the eighteen months before winding up, or devolved through the death of a former holder. The court noted that the petitioner did not satisfy these conditions as there was no original allotment or registration of shares. Consequently, the petitioner could not be considered a contributory of Polaris under Section 439(4)(b).

2. Grounds for Winding Up under Section 433:
The petitioner sought winding up on grounds under clauses (c), (e), and (f) of Section 433:
- Clause (c): The court found that the petitioner had invested significant amounts in the company for vessel acquisition, and the agreements (SHA and JVA) indicated an interconnected business venture aimed at repaying the petitioner's investment and debt. Despite the sale of vessels, the petitioner's debt remained unpaid.
- Clause (e): The court recognized that the company had not conducted business for over a year, and the vessels had been sold, leaving the company with no substantial operations or assets, thereby justifying winding up on the grounds of inability to pay debts.
- Clause (f): The court emphasized the obligation of the parties to act in good faith and noted that the agreements and correspondence demonstrated an acknowledgment of debt by the respondents. The failure to repay the petitioner and the absence of business activities indicated that the substratum of the company had disappeared, fulfilling the just and equitable ground for winding up.

3. Validity of Statutory Notice:
The petitioner had served statutory notices to the registered office address as per the records of the Registrar of Companies. The notices were returned with remarks indicating the addressee was not known. The court held that the service of notice at the registered office address was valid and that the company's failure to update its address did not invalidate the notice. The judgment cited precedent from the Delhi High Court, affirming that notices sent to the registered office address as per official records are legally valid.

Conclusion:
The court concluded that the petitioner was not a contributory of Polaris under Section 439(4)(b) but had valid grounds under clauses (c), (e), and (f) of Section 433 for winding up both Polaris and Falcon. The statutory notice was deemed validly served. Consequently, the petitions for winding up were admitted, with directions for advertisement and deposit of publication charges.

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