TaxTMI 
TaxTMI 
1989 (1) TMI 305
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....order, the company has preferred the present appeal. In order to appreciate the controversy which lies within a narrow compass, a few facts may be stated. The respondent claims to be a creditor of the company, the principal amount of the debt being Rs. 6,00,000. According to the respondent, in addition to the said principal amount, the company was liable to pay him interest of 1.70% per mensem and on account of such interest, an amount of Rs. 2,29,850 was claimed till the time the winding-up petition was filed. If the petition is perused, the same proceeds upon the allegation that the company is unable to pay its debts and the said allegation is based upon the fiction contained in section 434 of the Companies Act. According to the petiti....
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....hat the company has very large assets. It is clear from a perusal of the petition that the petitioner must swim or sink on the basis of the said legal fiction. The relevant portion of section 434 of the Companies Act reads as under:- "434(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 satisfactio....
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....t be any estoppel against the company disentitling it from raising such defence merely because it had failed to indicate the defence earlier. The plea will have to be considered on merits and the important point to be considered, therefore, is whether the learned judge was right in the view that he took that rule 33 of the Companies (Court) Rules was applicable to the present case. Rule 33 reads as under : "33. Validity of service and of proceedings.-No service under these rules shall be deemed invalid by reason of any defect in the name or description of a person in the list of contributories or in the petition, summons, notice or other proceeding, provided that the court is satisfied that such service is in other respects sufficient; and....
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.... preclude the application of that rule to any notice of demand made on the company under section 434. The matter is abundantly clear and requires no authority to justify our view. Even then, reference may be made to a decision of the Calcutta High Court in Bukhtiarpur Bihar Light Rly. Co. Ltd. v. Union of India [1954] 24 Comp. Cas. 507, where the Division Bench of the Calcutta High Court had occasion to consider the corresponding provisions of the Indian Companies Act, 1913. Facts of that case are briefly set out hereunder : The Union of India representing the East Indian Railway claimed a sum of Rs. 5,22,313 from the appellant company before the Calcutta High Court, but the said notice of demand was sent to the Patna office of the compan....
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.... notice of demand to be served under section 434. The requirement contained in section 434 has to be strictly complied with in order to raise the legal fiction. It was certainly open to the petitioner to make an alterative claim, viz., that the company is not only deemed to be unable to pay its debts but that, in fact, also it is unable to pay its debts. For the latter allegation, however, sufficient particulars must be given in the petition for winding up. These are not found in the present petition and, in our view, the petitioner has rested his case only on the deemed fiction under section 434. As, in our opinion, the said fiction was not available to the petitioner since he did not address the notice of demand to the registered office o....