SINHA WATCHES INDIA PRIVATE LIMITED Vs. GUJARAT STATE FINANCIAL CORPORATION

JUDGEMENT

(1.) The petitioners M/s. Sinha Watches (India) Private Limited and its managing director challenge by this application an order passed by me on 30/06/1981 in Company Petition No. 19 of 1981 which was filed by present respondents nos. 1 and 2 to get appropriate orders of this Court for winding up petitioner no. 1 company on the ground that the said company was unable to pay its debts. The order which I passed on 30/06/1981 in the said Company Petition No. 10 of 1981 requires to be reproduced at this stage as under:

(2.) The petitioner No.1 M/s Sinha Watches (India) Private Limited (hereinafter referred to as the company) is a company incorporated under the Companies Act 1956 Petitioner No. 2 is the managing Director-cumChairman of the company. There is one more director who is the wife of petitioner No. 2. The petitioner No. 2 was allowed to hold 13080 shares and Smt. Anna Elizabeth Sinha wife of petitioner no. 2 was allowed to hold 8720 shares of Rs. 100 each. The company was incorporated for the objects set forth in the memorandum of association the main object being to carry on the business of manufacturers assemblers distributors hirers repairers importers exporters stores and warehouses of and dealers in watches clocks and time pieces of all descriptions including transistorized electrically or mechanically driven tower clocks watches and time pieces and split second stop watches calculators time indicating device sets. The case of the petitioners is that they imported into India machinery for manufacture of watches. Major part of the machinery has already come at the factory shed situated in Kandla Free Trade Zone. The Government of India Ministry of Commerce Civil Supplies and Cooperation (Department of Commerce) by its letter dated 5/07/1979 has given its approval to the terms of collaboration of the petitioners with M/s. Bric Enggist Switzerland for setting up a unit in the Kandla Free Trade Zone for the manufacture of ladies and gents watches on the conditions mentioned in the said letter. It appears that for the purpose of establishing the aforesaid manufacturing unit at Kandla Free Trade Zone in this state the petitioners obtained a loan of Rs. 14.59 lakhs from respondent no. 1 and Rs. 1.5 lakh from respondent no. 2 Respondents 1 and 2 had also undertaken to the Indian Overseas Bank to pay Rs. 43 51 138.44 against the letter of credit which respondents 1 and 2 opened with the Indian Overseas Bank. It appears that the proposed project in its initial days and months had no smooth sailing. In the meantime respondents 1 and 2 served statutory notices to petitioner no. 1 company demanding their dues. 1 am told that petitioner no. 2s wife Mrs. Anna Elizabeth Sinha who is also a director of the company was served with statutory notices in January 1981 issued on behalf of respondents 1 and 2 who are the creditors of the company at her Switzerland address. As the said notices were not complied with the concerned respondents 1 and 2 filed Company petition No. 10 of 1981 for obtaining an order of winding up of the petitioner no. 1 company. The said petition was filed on 3/03/1981.

(3.) It appears that the petitioner No. 1 company was sought to be served at its registered office situated in this city pursuant to the order of this court in company application No. 10 of 1981 but the notice could not be served as the registered office of the company could not be traced. That thereafter by an order dated 20-3-1981 N. H. Bhatt J. appointed the Official Liquidator as provisional liquidator for petitioner No. I company and directed notice of pendency of the petition to be served by way of public advertisement. Accordingly a public advertisement was inserted regarding pendency of the petition in Gujarat Samachar a Gujarati dally on 12-5-1981 and in local edition of Times of India on 18 It is pertinent to note that even earlier notice of acceptance of this company application No. 10 of 1981 was permitted to be published in local news paper and was in fact published on 3-4-1981 in Times of India. It is an admitted fact that petitioner No. 2 who is the Managing Director of petitioner No.1 company was detained in Tihar Jail Delhi between 4-12-1980 and 17/11/1981 Thus at the relevant time he could never have lead the newspaper advertisements regarding pendency of the company petition which were published locally in this city in the aforesaid newspapers while so far as the wife of petitioner No. 2 is concerned she was the other Director and was a Swiss national staying all the time in Switzerland. It is also an admitted position that notice of pendency of the company petition No. 10 of 1981 was never served on petitioner No. 2s wife in Switzerland. So far as petitioner No. 2 is concerned he was also not served with any notice of pendency of the company petition at his address at Tihar Jail Delhi where he was detained at the relevant time. It appears that in the meanwhile the Official Liquidator of this court who was appointed as Provisional Liquidator by an order of N. H. Bhatt J. dated 20-3-1981 issued a notice dated 26-3-1981 to petitioner No. 1 at his Switzerland address presumably being under the impression than petitioner No. 2 was already residing in Switzerland at the relevant time. It is the case of the petitioners of this application that the aforesaid notice sent by the Official Liquidator acting as Provisional Liquidator to petitioner No 2 at his Switzerland address was redirected to Tihar Jail Delhi where petitioner No. 2 was detained. Petitioner No. 2 came to know about this redirected notice in Tihar Jail on or about 5-5-1981. Petitioner No. 2 thereupon instructed his Delhi advocate Mr. Ranjan Dwivedi while petitioner No. 2 was being taken to court in connection with the case for which he was detained in Tihar Jail to send a telegram to the official Liquidator of this court informing that petitioner No. 2 was detained in Tihar Jail at New Delhi. Petitioner No. 2s advocate Mr. Ranjan Dwivedi accordingly sent a telegram to the Official Liquidator pointing out the fact that the present petitioner no. 2 was confined in Tihar Jail. The said telegram was received by her Official Liquidator on 5-5-1981. Thereafter it appears that the Official Liquidator wrote a letter dated 27-5-1981 to advocate Ranjan Dwivedi at Delhi informing him that his client was required to submit statements of affairs of the company within 21 days and that he was requested to make necessary arrangement to hand over possession of books records and assets of the company (in provisional liquidation) and to submit statements of affairs forthwith. Thereafter petitioner No. 2 appears to have been informed by the Delhi Advocate about the said letter received from the Official Liquidator. In response to the same petitioner No. 2 through his advocate addressed a letter dated 10-6-1981 to the Official liquidator pointing out that petitioner No. 2 was in Tihar Jail in connection with a case and so he could not attend the-office of the Provisional Liquidator and that he was hoping that his trial at Delhi will be over by 15/07/1981. Thereafter he hoped to be free and to attend the office of the provisional Liquidator and provide him with all necessary details.