Dismissed

Iol Netcom Ltd. v. Reach Network P.Ltd., and Anr.

Bombay HC2 Aug 2012APP/462/2012

Case brief

AI extract

What is this about?

The Court dismissed the company's appeal against a winding-up order. It held that statutory notices were validly served at the registered office and that the notification in the official registry governs the address until officially updated. Memory of the facts confirmed default in payment.

What did the court decide?

Appeal dismissed with costs to be deposited by the appellant within one month.

Iol Netcom Ltd. Vs Reach Network P.Ltd., and Anr. — Company and Corporate | Bombay HC (2012)

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Appeal (L) No.430 of 2012

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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APPEAL (L) NO. 430 OF 2012 IN COMPANY PETITION NO. 439 OF 2010

IOL Netcom Ltd.

… Appellant

Versus

Reach Network Pvt. Ltd. and Anr. … Respondents

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Mr. Subhash Jha i/by M/s. Law Global for the appellant.

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Mr. Shailesh Shukla i/by M/s. AZB & Partners for the respondents.

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CORAM : MOHIT S. SHAH, C.J. &

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N.M. JAMDAR,J. DATE : 02 AUGUST 2012

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P.C.

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This appeal is directed against the judgment and order dated 3^rd May, 2012 passed by the learned Single Judge of this Court allowing the winding up petition for winding up of the Appellant Company M/s. IOL Netcom Ltd., under section 433 and 434 of the Companies Act, 1956.

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There is no dispute about the fact that the Appellant Company had failed

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to pay the amount of Rs. 50 lacs., which was due and payable by the Appellant Company to the respondents as per undertaking given to the Court that the Appellant Company shall pay the petitioning Creditors the said

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2 Appeal (L) No.430 of 2012

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amount on or before 26^th September, 2011. The undertaking was accepted and the Petitioning Creditor was granted liberty to file a suit for the balance claim forming the subject matter of the winding up petition. It was also provided that in case of default by the Company, the Company Petition would stand admitted and advertised.

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When the company petition was taken up for hearing and final disposal on 16^th March, 2012, it was contended for the first time by the learned counsel for the company that the statutory notice was not served by the petitioner at the registered address of the Company.

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The learned company Judge has noted that the following four statutory notices were served upon the company at its registered office address viz. 601, Raheja Centre, Nariman Point, Mumbai 400 021:

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(a) Letter bearing Ref. No. AZB/32/08/OG dated October 8, 2008 (Exhibit “B” to the Petition);

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(b) Letter bearing Ref. No. AZB/47/08/OG dated October 24, 2008 (Exhibit “C” to the petition);

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(c ) Letter bearing Ref. No. AZB/70/08/OG dated November 24, 2008 (Exhibit “D” to the Petition); (d) Letter bearing Ref. No. AZB/473/08/OG dated October 7, 2010 (Exhibit “G” to the petition).

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The Petitioners point out that even before sending the statutory notice

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dated 7^th October, 2010, the advocate for the Petitioners on 29^th September, 2010 took an online inspection of the public documents of the Company on

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3 Appeal (L) No.430 of 2012

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the website of the Ministry of Corporate Affairs and also downloaded Form 18 of the Company which showed that with effect from 29^th May, 2006, the registered office of the Company was 601, Raheja Centre, Nariman Point, Mumbai 400 021. The learned Judge also found from the affidavit of the Registrar of Companies that the Company had filed Form 18 intimating change in its registered office address on 21^st September, 2010 with effect from 16^th September, 2010 but the said form was taken on record as `approved' by the Registrar of Companies only on 8^th October, 2010 and it was available for viewing to public with effect from 8^th October, 2010. The last statutory notice issued by the petitioner to the Company is dated 7^th October, 2010 at the same address viz. 601, Raheja Centre, Nariman Point, Mumbai 400 021.

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In view of the above facts, the learned Company Judge held that the notice was served at the registered office address of the company on as many as four occasions and there was sufficient compliance of the provisions of section 433 and 434 of the Companies Act, 1956.

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The learned counsel for the appellant has submitted that the first three notices was a composite notice which was issued to the company upon dishonour of the cheques in the year 2008 and therefore, the said composite

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4 Appeal (L) No.430 of 2012

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notice purporting to be notice under section 138 of the Negotiable Instruments

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Act as well as for winding up cannot be treated as valid notice.

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We do not find any substance in the above submission. The first three notices issued in the year 2008 clearly indicate that the notices were given both under section 138 of the Negotiable Instruments Act and for winding up of the company in case of failure to pay the amount on dishonour of the cheques within a time limit indicated in the said notice. Hence, even without going into the controversy whether the notice dated 7^th October, 2010 was served at the registered office address of the company, there was sufficient compliance with the provisions of sections 433 and 434 of the Companies Act.

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The learned counsel for the appellant submits that the amounts in respect of which winding up petition has been filed are different from the amounts mentioned in the notices given in October/November, 2008. This submission is again without any substance. Obviously with the passage of time and accrual of interest liability, the amounts are bound to be higher as mentioned in the winding up petition. Therefore, winding up petition cannot be dismissed on the ground that there is difference in the amount claimed in the winding up petition and the amount claimed in the notices which were served earlier in the year 2008.

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5 Appeal (L) No.430 of 2012

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Furthermore, the notice dated 7^th October, 2010 was admittedly served at the registered office of the Company at the address which was shown on the website of the Ministry of Corporate Affairs showing the same as registered office address of the Company. Two learned Single Judges of this Court have held in Mukund Kanhaiyalal Patel Vs. Swaroop Sriyarn Private Limited (2002) 109 Company Cases 413 and in Ispat Industries Limited (2005) 2 Comp. L.J. 234 that until the change has been effected, the registered address of the Company would remain as disclosed in the register maintained by the Registrar of Companies. We approve the same view. Until and unless the change in the registered office address of the Company is entered into the register maintained by the Registrar of companies and the same is displayed on the official website of the Ministry of Company Affairs, the public at large are entitled to treat the address displayed on the official website as official registered address.

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The Appellant Company had given an undertaking before the learned Single Judge to pay Rs.50 lacs on or before 26^th September, 2011 and the Company did not pay the amount of Rs. 50 lacs in clear breach of the said undertaking. The four cheques given for the amount of Rs. 50 lacs i.e. each cheque of Rs.12.50 lacs., were dishonoured. The defence of the Appellant Company was dishonest and raised with sole intent to somehow avoid

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Appeal (L) No.430 of 2012

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admitted liability of the company. We therefore, find no merit in the appeal. The appeal is dismissed with costs of Rs.50,000/-. The costs to be deposited

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by the appellant in this Court within one month from the date of this order.

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CHIEF JUSTICE

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(N.M. JAMDAR,J.)

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H.V. Nilegaonkar

Iol Netcom Ltd. v. Reach Network P.Ltd., and Anr.

Case brief

What is this about?

What did the court decide?

Iol Netcom Ltd. v. Reach Network P.Ltd., and Anr.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

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