TMI Blog2010 (12) TMI 1053X X X X Extracts X X X X X X X X Extracts X X X X ..... dra Bank the petitioner was admitted and the Official Liquidator attached to this Court was appointed as a provisional liquidator with the direction to take possession of assets and books of account of the respondent-company and proceed thereafter in accordance with the provisions of the Act. 3. The application raises two contentions. Firstly, the statutory notice under section 434(1)( a ) of the Act was not served at the registered office of the respondent-company and was returned back with the remark "closed office" and therefore, presumption under the said section does not arise. Secondly the respondent-company was not served with the notice of hearing in the winding up petition. It was the duty of the petitioner to serve the respondent-company. It is stated that consortium of banks have filed O.A. No. 186/1999 before the Debt Recovery Tribunal- II and the petitioner herein has filed an application under Order XXII, Rule 10 and Order VI, Rule 17 of the Code of Civil Procedure, 1908 and section 19(25) of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 for being substituted in place of ICICI on the basis of Deed of Assignment which is pending. It is contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4-2005. (D)The petitioner issued notice dated 27-9-2006 under section 433/434 of the Act calling upon the respondent-company to make payment of outstanding amount of Rs. 2.10 crores along with interest and legal expenses. The notices were sent by registered post as well as UPC at the registered office of the respondent-company and respondent No. 2. However the respondents did not make the payments. Along with the petition, copies of the receipts issued by the post office for having posted the notice dated 27-9-2006 have been enclosed. The postal receipts show that notices were issued by registered post at the registered office of the respondent-company at Karampura, Delhi and to respondent No. 2 at 12, Vaishali, Pitampura, Delhi - 88 and at 9/83, Punjabi Bagh (West), New Delhi - 110026. 6. After filing of the petition, objection was raised by the Registry as the petitioner had failed to file proof of service of demand notice under section 434(1)( a ) of the Act. The matter was listed before the Court subject to office objections on 23-3-2007. On the said date, the matter was adjourned at the request of the counsel for the petitioner to 23-4-2007. The petitioner thereafter fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vered 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." [Emphasis supplied] 10. Section 434(1)( a ) has to be read along with section 51 of the Act which reads : "51. Service of documents on company. A document may be served on a company or an officer thereof by sending it to the company or officer at the registered office of the company by post under a certificate of posting or by registered post, or by leaving it at its registered office : Provided that where the securities are held in a depository, the records of the beneficial ownership may be served by such depository on the company by means of electronic mode or by delivery of floppies or discs." [Emphasis supplied] 11. The contention of the respondent-company is that there is non-compliance of section 434(1)( a ) of the Act as the statutory notice was not delivered, in the sense that they could not be actually or physically served at the registered office address, and therefore th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erein had placed on record a postal envelope but it was noticed that the address mentioned on the postal envelope was not the registered office address of the Company but another address. 15. In Nuchem Ltd. s case ( supra ) it has been observed that the creditor must cause notice to be served on the company from whom the creditor is claiming and the service must be affected by delivering notice at the registered office through registered post or some other means requiring the company to discharge the debt. In the said case, finding was that the statutory notice sent by the petitioner therein did not reach the respondent-company. Decision in the case of K. Bhaskaran v. Shankaran Vaidhyan Balan AIR 1999 SC 3762 referring to section 27 of the General Clauses Act, 1897 and provisions of section 138 of the Negotiable Instruments Act, 1881, relating to proof of service was distinguished as the requirement under the Negotiable Instruments Act was/is only giving of notice, whereas the Act ( i.e., the Companies Act, 1956) requires delivery of notice. In the case of Nuchem Ltd. ( supra ), the Punjab Haryana High Court did not examine the effect of section 51 of the Act i.e., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Maxwell s Interpretation of Statutes, the learned author has emphasised that "provisions relating to giving of notice often receive liberal interpretation" ( vide p. 99 of the 12th Edn.). The context envisaged in section 138 of the Act invites a liberal interpretation for the person who has the statutory obligation to give notice because he is presumed to be the loser in the transaction and it is for his interest the very provision is made by the Legislature. The words in clause ( b ) of the proviso to section 138 of the Act show that the payee has the statutory obligation to "make a demand" by giving notice. The thrust in the clause is on the need to "make a demand". It is only the mode for making such demand which the Legislature has prescribed. A payee can send the notice for doing his part for giving the notice. Once it is dispatched his part is over and the next depends on what the sendee does. 22. It is well-settled that a notice refused to be accepted by the addressee can be presumed to have been served on him ( vide Harcharan Singh v. Shivrani and Jagdish Singh v. Natthu Singh ) 23. Here the notice is returned as unclaimed and not as refused. Will there be an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was no reason for the Court to believe that delivery could not be affected at the registered address. Referring to the language used in section 434(1)( a ) of the Act it was observed that it does not use the words "delivered to" but speaks of "delivered at". In a subsequent decision, the Bombay High Court in Cavendish Shipping Ltd. v. Polaris Marine Management (P.) Ltd. [2010] 156 Comp. Cas. 108 1 has been observed as under:- "That apart, in the present case, it has been averred in the company petition that the statutory notice was addressed to the registered office of the company as stated in the records of the Registrar of Companies, Maharashtra (Registrar of Companies). The petitioner obtained a certified copy from the record of the Registrar of Companies with regard to the registered office address of the company. However, the notices having been remitted on the address of the registered office as shown in the record of the Registrar of Companies, all notices came back with the remark "not known". The affidavit in reply does not proceed on the basis that the address mentioned in the statutory notice is not the registered office of the company. In a judgment of the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent is, however, that the same is not the registered office of the respondent-company as the respondent shifted its office to 57, Kalu Sarai, Hauz Khas, New Delhi with effect from 11-10-2001. The said fact of change of the address of the registered office of the respondent was, however, brought to the notice and filed with the Registrar of Companies by the respondent only on 7-11-2001 when it submitted the statutory Form No. 18. It is also apparent on the face of the records that the cheques were issued by the respondent as against the outstanding balance which were dishonoured by the bank on their presentation. 7. The first objection that is raised is with regard to the maintainability of the company petition on the ground that the statutory notice as required under the provisions of the Companies Act was not served on the respondent-company. The documents placed on record, however indicate that the petitioner sent the statutory notices to the respondent at the address at which the registered office of the respondent was located. But in the meantime the respondent changed the address of its registered office. Therefore, the statutory notices sent by the petitioner were not se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 51 of the Act. The word "served" in section 434(1)( a ) is followed by the words "by causing it to be delivered at its registered office." The later words have to be given due effect and are not redundant. They refer to the steps which a creditor has to take if the creditor wants to rely on section 434(1)( a ) of the Act. Notice under section 434(1)( a ) of the Act can be sent by registered post or otherwise (subject of course to the reservation/doubt about certificate of posting as expressed in several cases). The section 51 prescribes the mode and manner of service of a document. The document which includes notice under section 434(1)( a ) of the Act may be treated as served if it is sent in the manner specified under section 51 of the Act. As per section 51, leaving a document at the registered office of a company is sufficient service. Registered office of a company is to be designated and informed to the Registrar of Companies as per the requirements of the Act. The Act has specific purpose and object behind the said designation which is to ensure delivery of/service of documents of the company. A company being a juristic person and a corporate body and not a natural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouses and Shops Rent Control Act, 1966. In the said case, the landlord had initiated proceedings for eviction under the said section on the ground of arrears of rent. One of the prerequisites was service of notice in writing through post office under registered cover to the tenant to pay arrears within the specified period. In the said case, notice was sent by registered post but returned back with the endorsement "left without address, returned to the sender". The contention raised by the tenant was that the word "served" postulates actual service and therefore eviction order was not sustainable. The Supreme Court felt that this interpretation should not be adopted, as too strict and literal interpretation would make the section impracticable and unworkable. All that the landlord is required, in compliance with the provisions of the Act, is to send a prepaid registered letter to the tenant s correct address. Once he has posted a letter, he has no control over it. Similarly, the postman is required to deliver the letter and in case he is unable to contact the addressee or the person authorized to receive is not available, he has to return the letter. The postman neither has power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e posting is proved, onus shifts on the respondent-company. Service of notice under section 434(1)( a ) of the Act entitles the petitioner to raise a presumption and file a petition for the debt due and payable. The respondent-company has the right to defend the proceeding and show that the debt is not due or is bona fidely disputed. 21. In view of the above, the first contention of the respondent-company is rejected. It is held that notice under section 434(1)( a ) of the Act was duly delivered and served on the respondent-company. 22. The second contention of the respondent-company and the respondent No. 2 relates to service of notices after filing of the petition. Affidavit of service filed on 3-5-2007 states that notices sent to the respondent-company by courier as well as by registered post at their registered office were received back with the report "left without address". It is after this service report that notices were directed to be published in the newspapers " Hindustan Times " (English) and " Veer Arjun " (Hindi). These were published and thereafter Order dated 5-12-2007 was passed. Interestingly, in the application filed by respondent No. 2, he has not deni ..... X X X X Extracts X X X X X X X X Extracts X X X X
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