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TMI Blog2010 (10) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... its report within two months of taking over possession of the assets and records of the company. - COMPANY PETITION NO. 132 OF 2008 - - - Dated:- 25-10-2010 - P. JYOTHIMANI, J. P.S. Raman and K. Rajasekaran for the Petitioner. R. Thiagarajan, G. Ethirajulu and K. Murthy for the Respondent. JUDGMENT 1. The above company petition is filed under sections 433(1)( e ) and 434 read with section 439(1)( b ) of the Companies Act, 1956, for a direction to wind up the first respondent-company and to appoint the official liquidator as the liquidator. 2. The Industrial Development Bank of India (IDBI) was impleaded as the second respondent as per order dated 22-7-2010. Notice regarding admission was ordered in the company petition and the arguments of Mr. P.S. Raman, learned senior counsel appearing for the petitioner and Mr. R. Thiagarajan, learned senior counsel appearing for the first respondent-company who raised objection about the maintainability of the company petition and Mr. K. Murthy, learned counsel appearing for IDBI were heard. 3. The first respondent-company is a limited company with authorised share capital of Rs. 5 crores divided into 50 l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first respondent-company, one M/s. Dipalee Traders, Mumbai filed C.P. No. 295 of 2003 for winding up, which is pending in this court. It is the case of the petitioner that after doing conversion work for some time, the first respondent failed to continue the same due to electricity disconnection and requested the petitioner to advance further amount of Rs. 32.32 lakhs towards electricity bills and the same was also paid by the petitioner under a supplementary agreement dated 17-4-2007, under which the first respondent agreed to repay the said amount at the rate of Rs. 5 lakhs per month on 25th of every month. ( f )The petitioner also gave a further amount of Rs. 68,79,261 at the request of the first respondent for the purpose of electricity payment and other liabilities and a simple mortgage deed was executed by Mrs. J.S.P. Jeyarani wife of R. John Sundara Pandian, who is one of the directors of the first respondent in favour of the petitioner on 12-7-2006 and the said document was registered as document No. 2679 of 2006 in the office of the Sub-Registrar, Chokkikulam and under the mortgage, the properties described therein were furnished as security for repayment of a total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4,69,492 and the said suit is pending and I.A. No. 132 of 2007 for attachment filed by the petitioner was also allowed. ( i )It is stated that the first respondent mill also appeared before the court and undertook that it would not alienate the mill. In the meantime, as against the notice issued by the IDBI under the Security Interest Enforcement Rules, 2002, the first respondent moved the Madurai Bench of this court in W.P. (MD). No. 2547 of 2007 to prevent IDBI from auctioning the properties of the first respondent. In the statement filed before the High Court, the first respondent has categorically admitted that the first respondent is liable to pay Rs. 8,27,45,000 to the secured creditors and Rs. 6,38,21,000 to unsecured creditors. It is stated that the petitioner is entitled as on 31-1-2007, to Rs. 2,03,00,441 with interest up to date and there is a persistent default on the part of the first respondent and hence, the petitioner issued a statutory notice on 29-2-2008, calling upon the first respondent to pay the amount within 21 days with interest and the first respondent gave an evasive reply on 9-5-2008, for which a rejoinder was issued by the petitioner on 19-3-2008. Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the first respondent under the SARFAESI Act. It is stated that the first respondent-company is a sick company pending before the BIFR and its assets are charged with IDBI as well as other banks and the first respondent has no right to sell or alienate its properties without the written permission of the secured creditors and the BIFR. 7. The petition is resisted by the first respondent on the ground that the company petition is not maintainable since notice was not sent to the registered office of the first respondent. Mr. R. Thiyagarajan, learned senior counsel appearing for the first respondent would vehemently contend that in the winding up proceedings, the statutory provisions are to be strictly followed and even though the statutory notice is stated to have been issued to two addresses, it was not sent to the registered office of the first respondent company : ( a )It is his contention that even if a reply notice was issued on behalf of the first respondent, the violation of statutory provision will make the entire winding up proceedings as not maintainable, as the same was initiated on the basis of statutory notice, which was not addressed to the registered office. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jected on that ground. It is his further submission that in fact, even in the scheme of amalgamation, the address of the first respondent was given as No. 2, Kiruba Nagar, Thiruppalai, Madurai, Tamil Nadu and sending of notice to the Dindigul address cannot be said to be either mala fide or illegal since previously the office of the first respondent was situated at No. 61, Mengles Road, Nagal Nagar, Dindigul-624 003. ( b )He would also submit that there are abundant records to show that the first respondent acknowledged its liabilities and there is unimpeachable evidence to show that the first respondent received various amounts. It is his submission that filing of a civil suit is not a bar for filing winding up petition by relying upon the judgment in Varinder Sahni v. MGRM Net Ltd. [2010] 156 Comp. Cas. 36 (Delhi) and Indian Oil Corporation Ltd. s case ( supra ). 9. I have heard learned senior counsel for the petitioner as well as the first respondent and given my anxious thoughts to the issues involved in this case. 10. The fact that the first respondent-company was originally having its registered office at No. 2, Kiruba Nagar, Thiruppalai, Madurai is not in dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... memorandum and articles of association of the first respondent-company, the address of the managing director is given as having situated at Dindigul and therefore, it is clear on facts that the first respondent-company was having its registered office at Dindigul which was shifted to Madurai and after amalgamation with M/s. Sivakami Textiles Ltd., the first respondent shifted its registered office to Thenur, Samayanallur Post, Madurai with effect from 7-5-2002, which is reflected in Form No. 23AC filed by the first respondent as per section 220 of the Companies Act to the Registrar of Companies. But, the fact remains that the first respondent received the statutory notice issued by the petitioner. 15. The present company petition was filed by the petitioner under section 433( e ) read with section 434(1) on the ground that the company is unable to pay off its debts. Sections 433( e ) and 434(1) of the Companies Act, 1956, are as follows : "433. Circumstances in which company may be wound up by Tribunal. -( e ) if company is unable to pay its debts. 434. Company when deemed unable to pay its debts. (1) A company shall be deemed to be unable to pay its debts ( a )if a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial that notice must be addressed and sent to the registered office, on the facts of the case, the fact remains that the notice was received by the respondent. The Department of Post, India has also issued a certificate to the effect that the registered notice was delivered to the addressee on July 22, 1997. I am of the view that the petitioner has acted in good faith and it is also seen that the company petition was also served on the respondent. I therefore hold that the petitioner has acted bona fide, because the respondent had issued more than one letter to the petitioner and in all letters the address of the registered office of the respondent was shown as No. 36, Wallajah Road, Chennai. Further, prior to the issue of the statutory notice, viz., July 16, 1997, the petitioner had received the letter of the respondent dated June 17, 1997, showing the address of its registered office as No. 36, Wallajah Road, Chennai. Even assuming that the respondent has already changed its registered office to the new address with effect from May 1, 1997, when the petitioner has acted on the basis of the letter issued by the respondent immediately before the despatch of the statutory notice, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08 Comp. Cas.) : "In other words, it is sought to be contended that in the absence of service of notice in conformity with section 434(1)( a ) by serving a notice on the registered office of the company, no application for winding up is maintainable. In this case the liability is not being denied and the receipt of notice by the respondent-company at its administrative office is not disputed. But the hyper-technical objection raised is that such notice should have been served at its registered office and for want of service of notice on the registered office of the company, the company application is not maintainable, is the only and substantial contention advanced. The petitioner being a creditor is required to make a demand for payment. It is not in dispute that the statutory notice had been served on the respondent-company at its administrative office, but it has not been served at its registered office. Learned counsel for the respondent-company relied upon the decision of the Bombay High Court in N.L. Mehta Cinema Enterprises (P.) Ltd. v. Pravinchandra P. Mehta [1991] 70 Comp. Cas. 31, in support of its contention that the demand notice under section 434(1)( a ) must be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compliance of section 434(1)( a ) of the Companies Act, if it is proved to the satisfaction of the court that the company is unable to pay off its debts, the application for winding up cannot be thrown out and the relevant portion of the judgment is as follows (page 207) : "It is an admitted fact that notice under section 434(1)( a ) of the Act was not served on the respondent-company on its registered address. Therefore, the presumption of inability to pay the debts may not be drawn against it under this section. Under clause ( b ) ibid, the company shall be deemed to be unable to pay its debts when a decree remains unsatisfied while under clause ( c ), if it is proved to the satisfaction of the court that the company is unable to pay its debts. And in determining whether the company is unable to pay its debts, the court shall take into account the contingent and prospective liabilities of the company. Thus, it appears that even in the absence of notice under section 434(1)( a ) of the Act, if the applicant proves to the satisfaction of the court that the company is unable to pay its debts, the court shall take into account the contingent and prospective liabilities of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Companies Act had clearly given all the facts. The period of 21 days was also specified in the notice and it was specifically averred that in default a petition for winding up would be filed. It is also not disputed in the reply that the registered office of the respondent-company is at the address, on which the notice was sent." 22. On the facts of the present case, which stand better than those cases decided and narrated above, it is not only clear that the first respondent received the statutory notice but also chose to give reply through its counsel and therefore, there is absolutely no point for learned senior counsel appearing for the first respondent in harping upon the hyper-technicalities. Further, as far as the address of registered office of the first respondent is concerned, there are at least three addresses by way of change effected in respect of the first respondent-company and it is not as if the statutory notice issued by the petitioner was sent to a totally unknown place as held by this court (E. Padmanabhan J.) in the above said judgment. Certainly, two Bombay High Court judgments and the earlier judgment of the Madras High Court in B. Viswanathan s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplementary agreement entered into between the petitioner and the first respondent dated 17-4-2006, by which the first respondent received a sum of Rs. 32.32 lakhs against electricity charges and further agreement dated 7-9-2006, by which the first respondent received an additional sum of Rs. 70 lakhs by hypothecating the property of the managing director Mr. R. John Sundara Pandian. The accounts maintained by the first respondent and the books of account also clearly prove various amounts received by the first respondent from the petitioner. 25. These are all documents which go to show about the receipt of various debts by the first respondent from the petitioner. The confirmation letter sent by way of fax message by the first respondent dated 20-9-2006, shows the receipt of Rs. 30,73,197 by the first respondent from the petitioner. Again, the receipt of Rs. 16.62 lakhs from the petitioner by the first respondent for payment of wages to the employees of the first respondent for Deepavali in 2006 was admitted by way of fax message issued by the first respondent dated 17-10-2006 and that was also followed by a letter issued by the first respondent. Further, the ledger account ..... X X X X Extracts X X X X X X X X Extracts X X X X
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