Gujarat High Court
Smallwood vs Harsh on 11 October, 2010
Author: Jayant Patel
Bench: Jayant Patel
Gujarat High Court Case Information System
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COMP/11620/2010 1/ 3 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
COMPANY
PETITION No. 116 of 2010
=========================================
SMALLWOOD,
REYNOLDS, STEWART STEWART INTERNATIONAL, LTD - Petitioner(s)
Versus
HARSH
INTERTRADE PRIVATE LIMITED - Respondent(s)
=========================================
Appearance :
MR
DHAVAL M BAROT for
Petitioner(s) : 1,
MR NAVIN PAHWA for M/S THAKKAR ASSOC. for
Respondent(s) : 1,
=========================================
CORAM
:
HONOURABLE
MR.JUSTICE JAYANT PATEL
Date
: 11/10/2010
ORAL ORDER
1. The present petition for winding up of the Company has been filed by the petitioner under Section 433 read with Section 434 of the Companies Act on the ground that the Company is unable to pay the debt. 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 one lakh 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 company to pay the sum so due and the company has for three weeks thereafter neglected to pay the sum, or to secure or compound for it to the reasonable satisfaction of the creditor;
(b) if execution or other process issued on a decree or order of any Court or Tribunal in favour of a creditor of the company is returned unsatisfied in whole or in part; or
(c) if it is proved to the satisfaction of the Tribunal that the company is unable to pay its debts, and, in determining whether a company is unable to pay its debts, the Tribunal shall take into account the contingent and prospective liabilities of the company.
(2) The demand referred to in clause (a) of sub-section (1) shall be deemed to have been duly given under the hand of the creditor if it is signed by any agent or legal adviser duly authorised on his behalf, or in the case of a firm, if it is signed by any such agent or legal adviser or by any member of the firm.
2. The aforesaid Section shows that prior to initiation of the action for winding up of the Company, notice is required to be served to the Company concerned. It is an admitted position that in the present case, notice has been served to the Director of the Company and not to the Company.
3. Mr. Barot, learned Counsel appearing for the petitioner attempted to contend that the notice to the Managing Director was found as substantial compliance by the decision of the Punjab and Haryana High Court in case of Luxmi Industrial Gases Private Limited Vs. Punjab Chemi Plant International Ltd., reported in (103) 2001 Company Cases
429. As such in the present case, notice has not been served even to the Managing Director and further the facts and circumstances of that case cannot be equated with the present case, more particularly when the statute itself is clear in its own language. Hence, the said contention cannot be accepted.
4. Under these circumstances, the present petition cannot be maintained. Hence dismissed. However, it is observed that in the event, the statutory requirement is complied with by serving a fresh notice and thereafter, if there is no compliance by the Company, the present order shall not operate as a bar and the petitioner may be at liberty to file a fresh petition. Of course, at that stage, the rights and contentions of both the sides shall remain open.
[Jayant Patel, J.] mrpandya Top