Madras High Court
Donghee Vision Industrial Company Ltd. vs Tube Investments Of India Ltd. And Anr. on 8 December, 2000
Equivalent citations: [2001]104COMPCAS460(MAD)
JUDGMENT N.V. Balasubramanian, J.
1. This application is filed to set aside the order dated September 29, 2000, passed in C. P. No. 90 of 2000, winding up the applicant-company, and to restore C. P. No. 90 of 2000 to be heard on the merits after the applicant files its objection to the winding up petition.
2. The applicant in C. A. No. 2389 of 2000 was the respondent in C. P. No. 90 of 2000 and the respondent in the company application is the petitioner in the company petition. The parties are hereinafter referred to as shown in the company application.
3. The respondent herein has filed company petition, C. P. No. 90 of 2000 for winding up of the applicant-company under Sections 433(e) and (f), 434(1)(a) and 439(1) and (b) of the Companies Act, 1956. In the petition filed for winding up, the respondent has stated that the applicant is a public limited company incorporated under the Companies Act, 1956, and having its registered office at "No. 722/T, Chesney Town House, Commander-in-Chief Road, Egmore, Chennai-8". This court, by order dated March 31, 2000, ordered notice regarding admission of the company petition returnable in four weeks. This court also granted permission to the respondent to take private notice. Accordingly the notice was issued to the applicant by the Registry and the Registry put up a note to the learned judge stating that "notice to respondent returned, unserved, vacated". It is relevant to mention here that in the application for service of process, the respondent has given the address of the applicant as under :
"Donghee Vision Industrial Co. Ltd., 722/T, Chesney Town House, Commander-in-Chief Road, Egmore, Chennai-600 008."
4. In pursuance of the order of this court permitting the private notice, the respondent-company has sent a registered notice to the said address and the postal endorsement shows that the letter was redirected to "4L/4K, Pioneer Arcade, 22-A, Cathedral Road, Madras-86", and there is also a postal endorsement, "left", and this court, by order dated June 22, 2000, made the following order :
"Notice sent to the respondent has been returned with the endorsement 'vacated the premises'. Petitioner to effect service by way of advertisement in a local daily. Date of hearing July 14, 2000."
5. On July 14, 2000, the learned judge made a note to the effect that the parties had stated that they would settle the matter and adjourned the matter by four weeks. When the matter came up for hearing on August 18, 2000, the learned judge found that the advertisement which had been directed to be made on June 22, 2000, has not been made and ordered the respondent to effect fresh advertisement as directed earlier fixing the date of hearing as September 22, 2000. Accordingly, the respondent advertised the petition in the English daily, News Today and in the Tamil daily, Makkal Kural both dated August 30, 2000, and in both the dailies, the address of the applicant is given as "722/T, Chesney Town House, Commander-in-Chief Road, Egmore, Chennai-8".
6. When the matter came up on September 25, 2000, the matter was adjourned to September 29, 2000. On September 29, 2000, the learned judge found that despite advertisement no one had come forward to oppose the winding up and the applicant failed to show as to why it should not be wound up, despite its inability to pay its debts, and ordered the applicant-company be wound up. The applicant-company has come forward with this application to set aside the order dated September 29, 2000.
7. According to the applicant, in the winding up petition the respondent has not given the correct address of the applicant and the address given as "722/T, Chesney Town House, Commander-in-Chief Road, Egmore, Chennai-600 008" is not a correct address and the applicant had already moved its registered office from the said address even in March, 1999 itself to B-9 and B-10, Irungattukottai SIPCOT Industrial Park, Sriperumbudur, Tamil Nadu" after informing the Registrar of Companies. It is the case of the applicant that the respondent did not give the notice to the correct address of its registered office in spite of its knowledge that the registered office of the applicant-company is not functioning at Commander-in-Chief Road address and the paper publication was also effected giving an incorrect address. It is the case of the applicant that no proper notice was served on the applicant before the winding up order was passed. The applicant has also filed a reply affidavit."
8. The respondent-company has filed a detailed counter affidavit stating that no advertisement of change of address of the applicant-company was given and the letter of the applicant did not even state where the registered office of the applicant-company is situate. It is the case of the respondent that the applicant-company continued to function at Commander-in-Chief Road, Chennai-8 and the application is devoid of merit. However, it is not necessary to notice the other averments made in the counter affidavit.
9. The principal submission of Mrs. Nalini Chidambaram, learned senior counsel appearing for the applicant is that the notice issued under Section 434 of the Companies Act is not a valid notice at all as the notice was issued to No. 722/T, Chesney Town House, Commander-in-Chief Road, Egmore, Chennai-600 008 which is not its registered office. Learned senior counsel referred to Section 434 of the Companies Act and submitted that notice should be served on the company by causing it to be delivered at its registered office by registered post or otherwise. Learned senior counsel referred to Form-18 wherein it is stated that the situation of the registered office of the applicant-company was changed from Commander-in-Chief Road to B-9 and 10, Irungattukottai SIPCOT Industrial Park, Sriperumbudur, Tamil Nadu, with effect from March 27, 1999, which was accepted by the Registrar of Companies, Tamil Nadu, Chennai. Learned senior counsel therefore submitted that there was no valid notice under Section 434 of the Companies Act and hence, the company petition itself should be dismissed. Learned senior counsel also referred to Rule 28 of the Companies (Court) Rules, 1959 (hereinafter referred to "the Rules") and submitted that since the notice of the petition was not served on the registered office or the principal place of business, there was no service of the petition and the order passed without service on the applicant-company is liable to be set aside. Learned senior counsel also submitted that advertisement was effected only in the newspapers having circulation in Chennai and in the advertisement, the address of the applicant-company is shown as 722/T, Chesney Town House, Commander-in-Chief Road, Egmore, Chennai-600 008. Learned senior counsel also referred to the copies of the letters filed in the typed set and submitted that the respondent-company was fully aware of the situation of the registered office of the applicant-company at Sriperumbudur and in spite of the same, the respondent has purposely given a wrong address and hence, the order winding up the applicant-company should be set aside. Learned senior counsel also submitted that the rejoinder has been filed without verifying the contents of the documents and the person who has sworn to the rejoinder is not competent to affirm whether the letter has been received by the respondent-company or not.
10. Mr. C.A. Sundaram, learned senior counsel appearing for the respondent-company, on the other hand, submitted that copies of the documents filed in the typed set are all fabricated documents. Learned senior counsel referred to the endorsement made in the letter dated August 11, 1999, and submitted that the endorsement of receipt was made on August 11, 1999 at 11.30 p.m. and there is no affixture of the seal of the company and therefore submitted that the document is a fabricated document. He also referred to the notices received by the respondent-company and submitted that there is no mention about the situation of the registered office of the applicant-company. Learned senior counsel therefore submitted that the applicant has purposely fabricated certain documents and letters to contest the winding up proceedings and since the applicant has come forward with a false case, the application should be dismissed. Learned senior counsel therefore submitted that the applicant has not produced any letter issued after November, 1999, showing the situation of its registered office at Sriperumbudur and the respondent has sent the statutory notice to the Commander-in-Chief Road address and also to the office at Sriperumbudur. Learned senior counsel also referred to the statutory notice sent on December 20, 1999. Learned senior counsel therefore submitted that even assuming that the provisions of Section 434(1)(a) were not complied with, the provisions of Section 433(e) would apply and hence, the order of winding up need not be set aside. Learned senior counsel submitted that the advertisement regarding the applicant-company was given in the newspapers and in spite of the efforts taken to serve at the registered office or the corporate, office of the applicant-company, the applicant has not responded and hence, this court has rightly held that the applicant has not come forward to oppose the winding up and the applicant has not made out any case to set aside the winding up order. Learned senior counsel also referred to the decision of the Delhi High Court in Devendra Kumar Jam v. Polar Forgings and Tools Ltd, [1995] 84 Comp Cas 766 and submitted that Section 434(1)(a) of the Companies Act does not require the creditor to state in the notice as to what would be the consequences if the sum due is not paid by the company to the creditor and the law does not require that the demand under Section 434(1)(a) must recite a threat of proceedings for winding up in the case of failure by the company to pay.
11. I have carefully considered the submissions of Mrs. Nalini Chidambaram, learned senior counsel appearing for the applicant and Mr. C.A. Sundaram, learned senior counsel appearing for the respondent. In my view, it is not necessary to express any opinion on the question whether the notice dated January 6, 2000, is a valid notice under Section 434(1)(a) of the Companies Act and also to decide the question in the absence of the postal seal in the acknowledgment whether the notice was properly served on the applicant-company or not. In my view, it is not necessary to express any opinion whether the respondent-company, in spite of its knowledge that the applicant-company has shifted its registered office to Sriperumbudur, has purposely given the address of the registered office of the applicant as Commander-in-Chief Road, Egmore, Chennai. I am also not inclined to express any opinion on the question whether the documents contained in the typed set filed before this court on November 2, 2000, are all fabricated documents or not.
12. Under Rule 27 of the Rules, the notice of every petition required to be served upon any company shall be in Form No. 6 and shall be served not less than 14 days before the date of hearing. Form 6 prescribes the procedure for issue of notice of petition. Under the said Rule, along with the notice of petition, a copy of the petition should be served on the company. Rule 28 prescribes the mode of service on the company. Rule 28 of the Rules says that when the petition is presented against a company, it should be accompanied by the notice of the petition in the prescribed form together with a copy of the petition for service on the company and an envelope addressed to the company at its registered office or its principal place of business and sufficiently stamped for being sent by registered post for acknowledgment and the Registrar, on admission, is also required to send notice together with a copy of the petition to the company by registered post. Under Sub-rule (2) of Rule 28 of the Rules, every petition shall be served on the company at its registered office and if there is no registered office, it should be served at its principal place of business or the last known principal place of business by leaving a copy thereof with an officer or employee of the company.
13. It is essential under the said rule that after the admission of the company petition, the petition should be served on the company at its registered office and only if there is no registered office, the petition can be served at the principal place of business or the last known principal place of business by leaving a copy thereof with an officer or employee of the company and if no such person is available, it is open to the judge to give suitable directions. Under Sub-rule (2) of Rule 28, the notice has to be served at the registered office of the company and only when there is no registered office, the notice can be sent to the principal or last known principal place of business by leaving a copy thereof with the office or employee of the company or in case no such person is available, to such other person as the judge or the Registrar may direct.
14. On the facts of the case, it is clear that the notice for admission was sent to the applicant-company at the Commander-in-Chief Road address. Section 146 of the Companies Act deals with the registered office of a company. Under Sub-section (2) of Section 146, notice of the situation of the registered office and of every change therein shall be given within 30 days after the date of the incorporation of the company or after the date of the change, as the case may be, to the Registrar who shall record the same. Under Section 147 of the Companies Act, every company shall print or affix its name and the address of its registered office and keep the same painted or affixed on the outside of every office or place in which its business is carried on in a conspicuous place, in letters easily legible and shall have its name engraven in legible characters on its seal and shall have its name and the address of its registered office mentioned in legible characters in all its business letters, bill heads and letter paper and in all its notices.
15. It is not necessary to consider the question whether the applicant-company has acted in violation of Section 147 of the Companies Act as some of the letters issued by it do not bear the address of its registered office at all. However, on the facts of the case, it is seen that the applicant-company has given notice of the change in the situation of its registered office to the Registrar of Companies in Form No. 18 informing that its registered office was changed from Commander-in-Chief Road address to B-9 and 10, Irungattukottai SIPCOT Industrial Park, Sriperumbudur, Tamil Nadu, with effect from March 27, 1999, and the Registrar of Companies also recorded the same by an endorsement dated April 7, 1999. The applicant has produced a copy of Form No. 18, certified by the Assistant Registrar of Companies, Chennai, which contains the office seal of the Registrar of Companies. I am of the view, there is nothing to disbelieve the document intimating the change in the situation of the registered office of the applicant-company to the Registrar of Companies, and it is clear from Form No. 18 that the registered office of the applicant-company is situate at No. B-9 and 10, SIPCOT Industrial Park, Irungattukottai, Sriperumbudur, Tamil Nadu. Probably, that is the reason for the respondent-company to send the notice dated December 20, 1999, to the applicant-company at SIPCOT address which was refused and returned to the sender.
16. In so far as the service of private notice of the company petition is concerned, the notice was sent to the address given in the company petition wherein the registered office of the applicant-company is shown as 722/T, Chesney Town House, Commander-in-Chief Road, Egmore, Chennai-8, and the notice was redirected to Pioneer Arcade, 22-A, Cathedral Road, Madras-86 and then it was returned to the respondent-company with the postal endorsement, "left". In so far as the court notice is concerned, a notice was sent before the admission of the company petition to the Commander-in-Chief Road address. This court, on the basis of the note put up by the Registry, ordered service by way of advertisement in a local daily and the order of the court was made before the admission of the petition. As a matter of fact, there was no formal order admitting the company petition. In the newspaper advertisements also, the Commander-in-Chief Road address was given and the publication was effected in local dailies having circulation in the city of Chennai, whereas the registered office of the applicant-company is situate at Sriperumbudur in a different district altogether. In my view, the company petition should be served on the applicant-company at its registered office. The respondent at the time of filing the company petition should have ascertained from the office of the Registrar of Companies, Chennai, as to the situation of the registered office of the applicant-company and it is not open to the respondent-company to proceed on the basis of the old address, particularly in view of the fact that the respondent-company was addressing its letters dated November 5, 1999, November 16, 1999 and November 25, 1999 (produced as documents Nos. 2, 4 and 6) to the applicant-company at its registered office at SIPCOT Industrial Park, Irungattukottai, Sriperumbudur. The fact remains that the applicant-company has given its address as Irungattukottai SIPCOT Industrial Park, Sriperumbudur in its letters dated November 13, 1999, and November 16, 1999 (produced as documents Nos. 3 and 6).
17. I am of the view that the service of the company petition in the manner provided under the Companies (Court) Rules is a mandatory requirement that must be fully complied with and if a company is ordered to be wound up without proper service on the company, it will have serious and disastrous consequences on the status, business and functioning of the company. Therefore it is essential that the service in the manner contemplated under Rule 28 of the Rules is mandatory. It is not the case where there is no registered office of the applicant-company. As already seen, the registered office of the applicant-company is situate at Sriperumbudur and the applicant-company was ordered to be wound up without giving notice to its registered office of the applicant-company. Hence the order of winding up passed on the basis of the substituted service on the company at the incorrect address given is liable to be set aside. Though the respondent-company might have incurred certain expenditure by way of advertisement and deposit of money with the official liquidator, since the winding up order was passed on the basis of service at the incorrect address given by the respondent-company, it cannot be compensated.
18. The result is that the earlier order winding up the applicant-company dated September 29, 2000, is set aside and the application is allowed. The company petition is restored to file. No costs.