9911796707
TMI Blog1989 (1) TMI 305X X X X Extracts X X X X X X X X Extracts X X X X ..... a company which was ordered to be wound up by the company judge by an order passed on August 25, 1988, in. Company Petition No. 204 of 1987. Aggrieved by that order, the company has preferred the present appeal. In order to appreciate the controversy which lies within a narrow compass, a few facts may be stated. The respondent claims to be a creditor of the company, the principal amount of the debt being Rs. 6,00,000. According to the respondent, in addition to the said principal amount, the company was liable to pay him interest of 1.70% per mensem and on account of such interest, an amount of Rs. 2,29,850 was claimed till the time the winding-up petition was filed. If the petition is perused, the same proceeds upon the allegation that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d one entirely based on the aforesaid fiction, there was no warrant for holding that the company was unable to pay its debts. As a matter of fact, we are told that the company has very large assets. It is clear from a perusal of the petition that the petitioner must swim or sink on the basis of the said legal fiction. The relevant portion of section 434 of the Companies Act reads as under:-- "434(1). A company shall be deemed to be unable to pay its debts -- (a) if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding five hundred rupees then due, has served on the company, by causing it to be delivered at its registered office, by registered post or otherwise, a demand under his hand requiring the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order for costs, but surely cannot affect the merits, if any, of the defence. In other words, such conduct cannot prejudice the defence and thereby there cannot be any estoppel against the company disentitling it from raising such defence merely because it had failed to indicate the defence earlier. The plea will have to be considered on merits and the important point to be considered, therefore, is whether the learned judge was right in the view that he took that rule 33 of the Companies (Court) Rules was applicable to the present case. Rule 33 reads as under : "33. Validity of service and of proceedings.--No service under these rules shall be deemed invalid by reason of any defect in the name or description of a person in the list of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce at any administrative office of the company would be sufficient to raise a presumption or fiction under section 434. Similarly, the clear words of rule 33 would preclude the application of that rule to any notice of demand made on the company under section 434. The matter is abundantly clear and requires no authority to justify our view. Even then, reference may be made to a decision of the Calcutta High Court in Bukhtiarpur Bihar Light Rly. Co. Ltd. v. Union of India [1954] 24 Comp. Cas. 507, where the Division Bench of the Calcutta High Court had occasion to consider the corresponding provisions of the Indian Companies Act, 1913. Facts of that case are briefly set out hereunder : The Union of India representing the East Indian Railwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt) Rules was not under consideration by the Calcutta High Court. In our opinion, the said rule is of no assistance to the petitioner as it has no application to a notice of demand to be served under section 434. The requirement contained in section 434 has to be strictly complied with in order to raise the legal fiction. It was certainly open to the petitioner to make an alterative claim, viz., that the company is not only deemed to be unable to pay its debts but that, in fact, also it is unable to pay its debts. For the latter allegation, however, sufficient particulars must be given in the petition for winding up. These are not found in the present petition and, in our view, the petitioner has rested his case only on the deemed fiction u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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