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2004 (10) TMI 349

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..... e at Khar is shown to be the registered office of the Company. Admittedly further no change has been effected pursuant to the notice. In that view of the matter the registered office of the Company remains as disclosed in the records of the Registrar of Companies. The judgment in K. Bhaskaran v. Sankaran Vaidhyan Balan [ 1999 (9) TMI 941 - SUPREME COURT] would apply to a notice u/s 434(1)( a ) of the Companies Act with greater force. Section 138 of the Negotiable Instruments Act entails criminal consequences, whereas section 434(1)( a ) involves only civil consequences. Moreover the requirements of a notice u/s 138 of the Negotiable Instruments Act are stricter and wider. Despite the same, the Supreme Court held that a person who properly addresses a notice and mails it would be deemed to have fulfilled his obligation of sending the notice even if the same is returned unclaimed. On a parity of reasoning, it must be held that a notice though returned unclaimed, if duly mailed by registered post addressed to the registered office of the Company, must be deemed to have been delivered within the meaning of that expression in section 434(1)( a ) of the Companies Act. The first contentio .....

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..... Rs. 500 is due. Thus, passed the order accordingly - ( i )The company is directed to deposit Rs. 1,00,00,000 within twelve weeks from today. It is clarified that this would be in addition to the amounts already deposited. ( ii )In the event of the amount being so deposited and in the event of the petitioner filing a suit for recovery of the amount claimed in the petition within eight weeks of such deposit being made the amount shall stand transferred to the credit of the suit. In the event of the suit not being so filed the amount shall be returned to the Company. ( iii )In case of failure on the part of the Company to deposit the aforesaid amount, the Petition shall stand admitted and shall be advertised in the Free Press Journal, Navshakti and Maharashtra Government Gazette. ( iv )The petitioner shall deposit an amount of Rs. 2,000 with the Prothonotary and Senior Master of this Court within four weeks from the date of default towards the cost of advertisement. ( v )In view of the fact that a sum of Rs. 15,50,000 is admittedly due and payable the petitioner is at liberty to withdraw the same with accretions thereto, if any, after a period of twelve weeks from today. This amount .....

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..... t was too low the obvious response of the Company would have been to insist that a higher amount be adjusted in respect of the credit notes. The stand taken by the company before me is that after issuance of credit notes and adjusting amounts due to the company by way of alleged damages, an amount of only Rs. 15,00,000 will be found due and payable to the petitioner. 4. Thereafter the petitioner between 26th May, 1999 and 21st June, 1999, called upon the company to clear the outstandings and issue debit notes in respect of interest. The first response to these letters was on 21st June, 1999 when the company stated that the issue of the credit notes ought to be finalised. Even at this stage the company did not state that the petitioner s suggestion of adjusting Rs. 15,00,000 on an ad hoc basis was unjustified as being too low. The petitioner therefore requested a meeting to resolve the issue of credit notes. Under cover of its letter dated 9th June, 1999, the petitioner enclosed a statement of accounts as per its record and called upon the Company to reconcile its account and finalise the amounts with reference to the credit notes to be issued by the petitioner. The petitioners requ .....

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..... d at the Pune and the Mahalaxmi offices of the Company. The second statutory notice was served at the Pune and Khar offices of the company. The third statutory notice was served at the Pune office of the company. 8. It is the company s case that its registered office is at Mahalaxmi. This contention is not well founded. Even assuming it is, it does not provide a defence to the petition for a statutory notice was also served at the Mahalaxmi office. 9. The statutory notice dated 8th March, 2000 was served at the Khar office which is in fact the registered office of the company. Mr. Shah however submitted, that it is not. He founded this submission on the fact that the Company had filed form 18 on 11th March, 1995 changing the situation of the registered office from Khar to Mahalaxmi. Admittedly however, in the record of the Registrar of Companies the office at Khar is shown to be the registered office of the Company. Admittedly further no change has been effected pursuant to the notice. In that view of the matter the registered office of the Company remains as disclosed in the records of the Registrar of Companies. This is the view taken by this Court in Mukund Kanaiyalal Patel v. S .....

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..... agraphs 22, 23 and 24 of the judgment read as under: "22. It is settled that a notice refused to be accepted by the addressee can be presumed to have been served on him, vide Harcharan Singh v. Smt. Shivrani (1981) 2 SCC 535 : (AIR 1981 SC 1284), and Jagdish Singh v. Natthu Singh (1992) 1 SCC 647 : (1992 AIR SCW 1747 : AIR 1992 SC 1604). 23. 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 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, 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 i .....

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..... clearly that under section 138(1) of the Negotiable Instruments Act, the payee or the holder in due course of a cheque is required to make a demand by giving a notice in writing to the drawer and the right to proceed under section 138 of the Negotiable Instruments Act arises only in the event of the drawer failing to make payment within fifteen days of the receipt of the said notice. The two essential ingredients of a notice under section 138 of the Negotiable Instruments Act are the giving of the same and the receipt of the same. Under section 434 of the Companies Act, the notice is required "to be delivered". The Supreme Court in paragraphs 18 and 19 of the judgment noted that "giving a notice" is not the same as "receipt of the notice". It is important to note that having noted the distinction, the Supreme Court however held in paragraphs 20 and 21 as follows: "20. If a strict interpretation is given that the drawer should have actually received the notice for the period of 15 days to start running no matter that the payee sent the notice in the correct address, a trickster cheque drawer would get the premium to avoid receiving the notice by different strategies and he could esc .....

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..... sing to claim the same from the postal authorities despite intimation of the delivery thereof. Take a simple example. Companies are known to have their registered office in premises where they do not carry on any significant manufacturing, trading or administrative activities. The premises are used as a registered office only for the purpose of convenience and for complying with statutory provisions. In such a case, the Company could well avoid service of notices and then refuse to claim the same despite notification from the postal authority to do so. 17. In K. Bhaskaran s case ( supra ) the Supreme Court in paragraph 21 held that section 138 of the Negotiable Instruments Act invites a liberal interpretation in so far as it relates to the giving of a notice. The Supreme Court in relation to a notice under section 138 of the Negotiable Instruments Act applied the principle in Maxwell s Interpretation of Statutes that provisions relating to giving a notice often received a liberal interpretation. In my view this principle is equally applicable and ought to be applied in respect of a question regarding the delivery of a notice issued under section 434(1)( a ) of the Companies Act. In .....

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..... stered office. [This is of course subject to Mr. Madon s alternative submission based on the judgment in the case of Manganese Ore (India) Ltd. ( supra ) which I have not thought necessary to consider. It is also subject to the point I have already decided in the petitioner s favour that a statutory notice was served at the Khar office which is the registered office of the Company.] There is however, nothing in the scheme of the Companies Act in general or of section 434(1)( a ) in particular that supports Mr. Shah s theory of a merger of a prior statutory notice in a later notice rendering the former non-existent. The doctrine of merger which applies to decrees of trial courts qua those of the appellate court cannot possibly apply to statutory notices under section 434(1)( a ). There is neither any reason nor purpose that supports such a view. In the circumstances, I see no reason why the Petition cannot validly be based on the first statutory notice dated 14th October, 1999 though it was succeeded by two other notices. The subsequent notices did not have the effect of rendering it invalid or no longer effective. The Petition is therefore maintainable based on the statutory notice .....

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..... pon the company for payment of more than what was due, that per se will not make the notice or the consequential winding-up order bad or invalid, provided that there was a debt in excess of Great Britain Pound 50 due to the creditor. Both the above decisions have been cited and followed by a single judge of the Calcutta High Court in Ofu Lynx Ltd. v. Simon Carves India Ltd. [1971] 41 Comp. Cas. 174; The learned single judge was considering the validity of a notice under section 434 of the Companies Act, 1956, and the contention raised was that the notice must be deemed to be had because a portion of the claim in respect of which notice had been given was disputed and prima facie the dispute was required to be upheld. It was observed (p. 193 of 41 Comp. Cas.) : I, therefore, hold that a notice under section 434 of the Companies Act, 1956, will not be rendered invalid only because of the fact that the amount of debt mentioned in the notice may not be exactly the correct amount of the debt due, provided the amount mentioned in the notice includes the debt due and exceeds the sum of Rs. 500. In our opinion, the aforesaid decisions set out the correct principle and once we have reached .....

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..... aim was disputed by the company, the defence cannot be said to be legitimate and bona fide. " 26. ( a ) Mr. Shah sought to support his submission on the basis of a judgment of a learned single Judge of this Court in Shantilal Khushaldas Bros. P. Ltd. v. Smt. Jayabala Suresh Shah [1997] 90 Comp. Cas. 399 , where it was held: "In my view having regard to the language of clause ( a ) of sub-section (1) of section 434 which contemplates that the statutory notice therein must relate to the amount then due and demand having been made to pay all the amount "so due", the petition for winding up based upon such notice would be relatable to the demand contained in the said notice. The possibility, therefore, of either the company paying some of the dues mentioned in that notice or some additional claim having become available to the creditors to seek the remedy of winding up in the second petition would not be ruled out. In other words on the date on which the notice is served on the company it must be clearly told as to what amount was claimed from it as the amount due on the date of the notice. In the instant petition in paragraph 24 reference has been made to the petitioners advocate s le .....

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..... ections 433 and 434 otiose. The argument is therefore rejected. RE : Submission IV 28. Lastly, Mr. Shah submitted that an amount of only Rs. 15,00,000 is due and payable as the company was entitled to credit on account of the price difference for the balance amount of Rs. 84,27,158.68. As I have already observed earlier, despite the fact that the petitioner had on 24th May, 1999 suggested withholding an amount of only Rs. 15,00,000 towards the credit notes out of the total sum of Rs. 1,50,00,000, the company did not responded stating that the amount suggested was absurdly low. The company had at no stage stated the same. The company had not suggested what according to it is the value of the credit notes. Even upon the receipt of the statutory notice dated 8th March, 2000, which stated that an amount of Rs. 10,19,485 was due to be adjusted towards the credit notes the company never disputed that the figure is absurd or unfair. Indeed, in this view of the matter, the entire claim of the petitioner stands established. In any event, in the circumstances, there can be little, if any, doubt that an amount in excess of Rs. 500 is due. 29. In the circumstances, the following order is passe .....

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