1954 (10) TMI 29 - DSC - Companies Law

Issues Involved:
1. Whether the American company had established a place of business in Great Britain.
2. Whether the service of the writ at 36 Grosvenor Street was valid under section 412 of the Companies Act, 1948.

Detailed Analysis:

1. Establishment of a Place of Business in Great Britain:

The first issue examined was whether the American company had at any time established a place of business in Great Britain, specifically at 36 Grosvenor Street. The court noted that the American company did not comply with section 407 of the Companies Act, 1948, as it never considered that it had established a place of business in Great Britain. The plaintiff's argument hinged on the duties assigned to him as the director of the company for the sterling area and his activities at 36 Grosvenor Street. However, the court concluded that the plaintiff wholly failed to show that the American company ever established a place of business within Great Britain. This finding was sufficient to dispose of the case without considering the second issue.

2. Validity of Service Under Section 412:

Despite the resolution of the first issue, the court addressed the second issue due to its significance and prior judicial consideration. The question was whether the phrase "any place of business established by the company in Great Britain" in section 412 referred to an existing place of business at the time of service or any place where the company had ever established a place of business. The court interpreted section 412 to require that the place of service must be an existing place of business at the time of service. The court reasoned that the language of section 412, "by leaving it at or sending it by post to any place of business established by the company in Great Britain," necessitated that the place of service be a place which is then established as a place of business of the company.

The court found that the other construction would lead to absurd results, such as serving a company at a former place of business where it no longer conducted any business, which would not likely bring the proceedings to the company's notice. The court distinguished the present case from Sabatier v. Trading Company, noting that the latter involved a company that had filed with the registrar of companies the name of a person authorized to accept service, which was not the case here.

The court also rejected the plaintiff's argument that applying the principles of Sabatier's case would prevent an oversea company from gaining an advantage from its own non-compliance with the Act. The court held that the mode of service under section 412 must be at an existing place of business established by the company. The court emphasized that whether a place at which service is sought to be effected is an existing place of business must depend on the facts of each particular case.

Ultimately, the court concluded that the service effected at 36 Grosvenor Street was not good service under section 412, as it was not an existing place of business established by the American company at the time of service.

Conclusion:

The court allowed the appeal and directed that an order should be made setting aside the service of the writ in this action. The judgments of the other judges concurred with the primary judgment, emphasizing that the plaintiff failed to demonstrate that the American company had carried on business in Great Britain and that the service at 36 Grosvenor Street did not comply with section 412. The court underscored the importance of ensuring that service of process is likely to come to the notice of the foreign corporation, which was not the case here.

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