Punjab-Haryana High Court
Nuchem Ltd. vs C.S. Modi & Co. (P.) Ltd. on 17 August, 2000
Author: J.S. Khehar
Bench: J.S. Khehar
JUDGMENT Khehar, J.
1. The question which arises for consideration is whether this petition is maintainable in view of the fact that a statutory notice under Section 434 of the Companies Act, 1956 ('the Act'), which was despatched by the petitioner has been received back with the following endorsement :
'Unclaimed : Returned to sender.'
2. In this behalf, it is necessary to refer to the provisions of Section 434(1)(a), which is being extracted hereunder :
"Company when deemed unable to pay its debts (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 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;"
3. Section 434(1)(a) undoubtedly requires that a creditor must cause notice to be served on the company from which debt is claimed. Service must be effected by delivery notice at the registered office of the company through registered post or by some other means requiring the company to discharge its debt. The requirement to effect service of the notice in the manner aforesaid is a mandatory pre-requisite before filing a winding up petition.
4. The learned counsel for the petitioner has primarily relied upon Section 27 of the General Clauses Act, 1897, to drive home his submission that even though the communication sent by the petitioner to the respondent-company remained unclaimed, the same will be deemed to have been served on the respondent-company. Section 27, is being extracted here-under:
"27. Meaning of service by post.--Where any (Central Act) or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether expression 'service' or either of the expressions 'give' or 'send' or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, prepaying, and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post."
When examined in its totality, it is undoubtedly true that service will be deemed to have been effected by properly addressing a prepaid communication by registered post, unless the contrary is proved. In the instant case, by the endorsement made on the communication despatched to the respondent, it is clear that the notice sent by the petitioner to the respondent did not reach the respondent. Whether it did not reach the respondent fairly or unfairly is not for this Court to examine. Accordingly, even within the meaning of Section 27 extracted above, in my view, it cannot be held that the registered communication sent by the petitioner to the respondent stood served on the respondent in the facts and circumstances of the instant case.
5. The learned counsel for the petitioner then relied upon K. Bhaskaran v. Sankaran Vaidhyan Balan [2000] 99 Comp. Cas. 268 (SC), wherein the Apex Court examined a controversy similar to the one in hand by making the following observations :
"Here the notice is returned as unclaimed and not as refused. Will there be any significant difference between the two so far as the presumption of service is concerned ? In this connection a reference to Section 27 of the General Clauses Act will be useful. The section reads thus :
'27. Meaning of service by post.--Where any (Central Act) or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression 'serve' or either of the expression 'give' or 'send' or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time, at which the letter would be delivered in the ordinary course of post.' No doubt Section 138 of the Act does not require that the notice should be given only by 'post'. Nonetheless the principle incorporated in Section 27 (quoted above) can profitably be imported in a case where the sender has despatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee, unless he proves that it was not really served and that he was not responsible for such non-service. Any other interpretation can lead to a very tenuous position as the drawer of the cheque who is liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice." (p. 274)
6. The first thing that must be noticed is that the matter examined by the Apex Court in the aforesaid judgment was under the Negotiable Instruments Act, 1881, specifically under Section 138 thereof. Clause (b) of proviso to Section 138, provides as under:
138(a) *****
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and..."
7. It is clear from the aforesaid clause that requirement under the Negotiable Instruments Act is only of giving notice. There is no requirement of ensuring effective service of the said notice. For the aforesaid reason, it cannot be said that the deliberation of the Apex Court in the judgment relied upon by the learned counsel for the petitioner can be applied to the facts and circumstances of the present case. So far as the issue of giving notice is concerned, the same would definitely be governed by the observations made by the Supreme Court.
8. The Companies Act requires that a company which is to pay a debt must be informed of the same, and must be called upon to discharge its debt through a notice. The notice must actually be served on the respondent-company. Thereafter, if despite service of notice, the company does not discharge its debt, it is open to the creditor to file a winding up petition. Since I have already recorded above that in the facts and circumstances of the instant case, notice cannot be deemed to have been actually served on the respondent, it is, therefore, futile to proceed any further with this petition. Accordingly this petition is dismissed, as the statutory notice has not been served by the petitioner before filing the instant petition.
9. The learned counsel for the petitioner at this stage has brought to my notice that the petitioner has approached the Registrar of Companies and has been informed of the latest address of the respondent. He further states that he would now serve the notice on the respondent as contemplated under Section 434 at its present address. In case the petitioner is able to effect service of the notice under Section 434 upon the respondent even after disposal of this petition, it would be open to the petitioner to revive this petition by placing on record the averments of having effected service on the respondent.