2017 (11) TMI 1301 - HC - Companies Law

Winding up order eligibility - Copy of the said Company Petition was sought to be served at the address of the Respondent Company appearing in the record of the Registrar of Companies - the address mentioned of the Respondent Company was an address in Koparkhairane, Navi Mumbai however, the packet which was sent at the said address camhe back with the remark that the company is not available - Held that - As per R.28. Service on company the requirement is that a copy of the Company Petition along with notice in the prescribed form is to be lodged with the Company Department of this Court for facilitating the service to be effected on the Company of which winding up is sought. At this stage, it is required to be noted that on behalf of the Petitioner as many as three affidavits of service have been filed. However, the said affidavits of service are pre dating the admission of the Company Petition. The said affidavits disclose the three addresses at which the notice prior to the admission of the Company Petition was sought to be served on the Respondent Company. Insofar as the third address is concerned, the said address has been furnished to the Petitioner after a search was taken by the Petitioner in the office of the Registrar of Companies. The said address forms part of the Company Master Details of the Respondent Company. In the extract furnished by the office of the Registrar of Companies, the address mentioned is the aforesaid third address namely Koparkhairane, Navi Mumbai. It is required to be noted that the preadmission notice was sought to be served at the said address. However, the packet came with remark as not available at the said address . As indicated above, the Company Petition came to be admitted on 30/07/2012 and in terms of Rule 28, it was required on the part of the Petitioner that the notice be once again served on the Respondent at the said address i.e. Koparkhairane, Navi Mumbai. Admittedly, this has not been done. It is not possible to accept the contention urged on behalf of the Petitioner that since the packet which was sought to be served on the Respondent Company at the Koparkhairane, Navi Mumbai address had returned with the remark that the Company was not available at the said address, the Petitioner was not required to amend the cause title so as to incorporate the said Koparkhairane, Navi Mumbai address in the cause title. In our view, in a matter as serious as a Company Petition which seeks direction for winding up of a Company which obviously has a serious consequence for the Company, the procedure cannot be short circuited as in the matter sought to be contended by the learned Counsel for the Petitioner i.e. the Appellant herein. Since the Koparkhairane, Navi Mumbai address was the address appearing in the Company Master Details of the Registrar of Companies, the Appellant was required to take steps to serve the notice post the admission of the petition at the said address. It is also not possible to accept the contention of the learned Counsel for the Petitioner that Rule 28 (2) provides for service to be effected at the last known address. The said provision would apply only if there is no registered address of the company. In our view, therefore, there is no merit in the above Appeal. The order passed by the learned Single Judge, in the facts and circumstances of the case, condoning the delay whilst setting aside / recalling the order dated 14/11/2014, cannot be found fault with.

Summary

Issues Involved:
1. Validity of service of the Company Petition notice.
2. Compliance with Rule 28 of the Companies (Court) Rules, 1959.
3. Justification for condonation of delay in filing the application for recall of the winding-up order.

Issue-wise Detailed Analysis:

1. Validity of Service of the Company Petition Notice:
The primary contention revolves around whether the notice of the Company Petition was validly served on the Respondent Company. The Petitioner attempted to serve the notice at three addresses: Santacruz, Goregaon, and Koparkhairane, Navi Mumbai. All attempts were unsuccessful, with remarks such as 'shifted,' 'unclaimed,' and 'not available.' The Petitioner argued that there was no necessity to amend the cause-title to incorporate the Koparkhairane address since the packets were not claimed. However, the Respondent contended that service of the notice post-admission of the petition was mandatory at the registered address, which was Koparkhairane, Navi Mumbai, as per Rule 28 of the Companies (Court) Rules, 1959.

2. Compliance with Rule 28 of the Companies (Court) Rules, 1959:
Rule 28 mandates that after the admission of a Company Petition, a notice along with a copy of the petition must be served on the company's registered office. The Division Bench in MODERN DEKOR PAINTING CONTRACTS PVT. LTD. VS. JENSON & NICHOLSON (India) LTD. emphasized the mandatory nature of this rule. The learned Single Judge in SKOL BREWERIES LTD. VS. SANMAN DISTRIBUTORS PVT. LTD. reiterated this requirement. The Petitioner failed to serve the notice post-admission at the Koparkhairane address, which was the registered address as per the 'Company Master Details' from the Registrar of Companies. The court held that the procedure could not be short-circuited and that compliance with Rule 28 was essential.

3. Justification for Condonation of Delay in Filing the Application for Recall of the Winding-up Order:
The Respondent No.2, the Ex-Director of the Respondent Company, filed an application for condonation of delay of 530 days in filing the application for recall of the winding-up order. The delay was justified on the grounds that the Applicant became aware of the winding-up order only on 27/04/2016, and the application was filed on 06/05/2016. The learned Single Judge condoned the delay, emphasizing the mandatory requirement of serving the notice at the registered address post-admission of the petition. The court found that the Petitioner had not complied with this requirement, justifying the recall of the winding-up order.

Conclusion:
The court concluded that the order dated 14/11/2014 directing the winding-up of the Respondent Company was rightly recalled due to non-compliance with Rule 28 of the Companies (Court) Rules, 1959. The appeal was dismissed, upholding the learned Single Judge's decision to condone the delay and set aside the winding-up order. The judgment emphasizes the importance of strict adherence to procedural rules in matters with serious consequences such as winding-up of a company.