D.K. Deshmukh, J.
1. This petition has been filed under Section 434 of the Companies Act, seeking an order of winding up of the respondent-company on the allegation that it is unable to pay its debts, The statutory notice required to be served on the respondent-company by virtue of the provisions of Section 434 was issued on January 14, 2002. It was addressed to the respondent-company and it was sent to the following address :
'Rashid Mansion,
Worli Point,
Mumbai 400 018.'
2. That statutory notice was replied to by the respondent-company. The reply is dated February 20, 2002. A preliminary objection has been raised to the maintainability of this petition on the ground that the service of the notice dated January 14, 2002, is not valid. The admitted position is that the registered office of the respondent-company was 'Rashid Mansion, Worli Point, Mumbai 400 018'. However, an application on behalf of the respondent-company was filed on March 30, 2001, for change of registered address and the changed registered address of the respondent-company was :
'Kartar (Nilum) Mansion,
2nd Floor, 389,
Lamington Road,
Mumbai 400 004.'
3. According to the respondent-company, this change has been recorded by the Registrar on May 29, 2001. Learned counsel appearing for the respondents has placed on record a certified copy issued by the office of the Assistant Registrar of Companies, which is taken on record and marked 'X' for identification. The submission of learned counsel appearing for the respondent-company is that as per the provisions of Sub-section (1) of Section 434, the notice of demand has to be served at the registered office of the company. On the date of the notice, i.e., January 14, 2002, the registered office of the company was not at Rashid Mansion and therefore, the notice dated January 14, 2002, does not comply with the requirement of Sub-section (1) of Section 434 and, therefore, it is invalid. Learned counsel relying on a judgment of a Division Bench of this court in the case of N.L. Mehta Cinema Enterprises P. Ltd. v. Pravinchandra P. Mehta [1991] 70 Comp Cas 31, submits that the requirement of serving demand notice at the registered office of the company is a mandatory requirement and therefore, as the demand notice in the present case has admittedly not been served on the registered office of the company, the demand notice is invalid and the petition instituted without serving a valid demand notice cannot be entertained by this court.
4. Learned counsel appearing for the petitioners, on the other hand, submits that the respondent-company was representing to everybody including the petitioners that its registered office is at Rashid Mansion even after the alleged application was filed before the Registrar of Companies for change of address. In all its communications to the petitioners and also in the notices whereby meetings with the company personnel were held, the address of the company was mentioned as 'Rashid Mansion' and therefore, according to learned counsel, the requirement of Section 434 of the Companies Act has been substantially complied with by the petitioners in sending the notice at Rashid Mansion. It is further submitted by learned counsel for the petitioners that the statutory notice has been replied to by the respondent-company, which means that the statutory notice has been reached the registered office of the respondent-company and therefore, the respondent-company is not competent to raise this plea that the demand notice is invalid because it was not sent to the registered office of the respondent-company. Learned counsel further submits that the petitioners, before issuing the demand notice, had inspected the records of the Registrar and, therefore, it was found that the registered office of the respondent-company continues to be at Rashid Mansion in January, 2002, and therefore, it cannot be said that the demand notice is invalid. Learned counsel relies on a judgment of the learned single judge of this court in the case of Mukund Kanaiyalal Patel v. Swarup Shree Yarn P. Ltd. [2002] 109 Comp Cas 413 as also a judgment of the learned single judge of the Karnataka High Court in the case of Manganese Ore (India) Ltd. v. Sandur Manganese and Iron Ores Ltd. [1999] 98 Comp Cas 755.
5. Now, to appreciate the rival submissions, it is necessary to refer to the provisions of Sub-section (1)(a) of Section 434 which reads as under :
'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 satisfaction of the creditor.'
6. A perusal of this section shows that a creditor of a company has to serve on the company a demand notice at its registered office by registered post or otherwise requiring the company to pay the sum due and if the company within a period of three weeks from the date of receipt of the demand notice neglects to pay the sum or to secure or to compound for it to the reasonable satisfaction of the creditor, a statutory fiction arises and the company is deemed to be unable to pay its debts. Now, so far as the registered office of the company is concerned, a perusal of the provisions of Section 13 of the Companies Act shows that the memorandum of every company has to state the State in which the registered office of the company is situated. A perusal of Section 17 of the Companies Act shows that when a company desires to change or alter the provisions of its memorandum so as to change its registered office from one State to another State, then an application has to be made by the company after passing a special resolution to the Company Law Board and Sub-section (2) of Section 17 lays down that the alteration of the provisions of the memorandum relating to the change of place of registered office from one State to another State shall not take effect unless it is confirmed by the Company Law Board on petition. The relevant provision reads as under :
'17. (2) The alteration of the provisions of memorandum relating to the change of the place of its registered office from one State to another shall not take effect unless it is confirmed by the Company Law Board on petition.'
7. It is thus clear that if a company desires to make change its registered office from one State to another, it has to pass a special resolution, file a petition before the Company Law Board and when the change takes place, take approval of the Company Law Board. Sub-section (1) of Section 17 lays down that no company shall change its registered office from one place to another within a State unless such change is confirmed by the Regional Director. A perusal of the Explanation appearing below Sub-section (3) of Section 17A shows that the provisions of Section 17A apply only to companies which change the registered office from the jurisdiction of one Registrar of Companies to the jurisdiction of another Registrar of Companies within the same State. Thus, if a company wants to change its registered office from a place which is within the jurisdiction of one Registrar of Companies to the jurisdiction of another Registrar of Companies, then an application has to be made by the company in that regard and that change takes place only after it is confirmed by the Regional Director. The next provision which is relevant for the present purpose is contained in Section 146. Sub-section (1) of Section 146 lays down that a company has to nominate its place as its registered office to all its communications and notices to be addressed. It is Sub-section (2) of Section 146, which is relevant for the present purpose, reads as under :
'146. (2) Notice of the situation of the registered office and of every change therein, shall be given within thirty days after the date of the incorporation of the company or after the date of the change, as the case may be, to the Registrar who shall record the same :
Provided that except on the authority of a special resolution passed by the company, the registered office of the company shall not be removed--
(a) in the case of an existing company, outside the local limits of any city, town or village where such office is situated at the commencement of this Act, or where it may be situated later by virtue of a special resolution passed by the company ; and
(b) In the case of any other company, outside the local limits of any city, town or village where such office is first situated, or where it may be situated later by virtue of a special resolution passed by the company.'
8. A perusal of the provisions of Sub-section (2) of Section 146 shows that every company within a period of 30 days after its incorporation, has to give notice to the Registrar communicating its place having its registered office. If the company desires to make change in its registered office, then the company has to give notice for the purpose of such change within a period of 30 days after the date of change. A perusal of the provisions of Sections 17, 17A and 146 shows that there are three types of changes of registered office contemplated--(1) when the registered office is being changed from one State to another ; (2) when the registered office is being changed from the jurisdiction of one Registrar of Companies to the jurisdiction of another Registrar of Companies ; and (3) when the registered office is being changed within the jurisdiction of the same Registrar of Companies. In the first two cases, the change takes effect only after it is recorded by the competent authority and in the third case, the notice of change itself has to be given after the change has occurred and the only obligation that is cast on the Registrar of Companies is to record the same. In so far as the present case is concerned, it is evident from the document on record that notice of change was given and the change has been recorded by the Registrar of Companies on May 19, 2001, i.e., before the date on which the statutory notice was issued. I have already observed above that the consequence of non-compliance with a demand notice served under Section 434 is that a statutory fiction arises, that the company to which such notice has been served, is not in a position to clear its debts. Therefore, obviously the provisions made in the statute for service of demand notice are mandatory and therefore, have to be strictly complied with. A perusal of the judgment of the Division Bench in the case of N.L. Mehta Cinema Enterprises P. Ltd. v. Pravinchandra P. Mehta [1991] 70 Comp Cas 31 (Bom) referred to above shows that in that case demand notice was not served on the registered office. The Division Bench was considering validity of such notice. The Division Bench has observed thus (page 36) :
'The section, however, requires that such notice of demand must be sent to the registered office of the company. If that section is again perused, it will be seen that as regards the mode of service, i.e., whether the notice of demand is to be sent by registered post, an option has been given by adding the words 'or otherwise' after the words 'by registered post', but no such option has been provided after the words 'registered office'. The clear wording of the section precludes an argument that service at any administrative office of the company would be sufficient to raise a presumption or fiction under Section 434. Similarly, the clear words of Rule 33 would 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.'
9. Thus, the Division Bench has held that the requirement under Section 434 of serving demand notice on the registered office of the company is a mandatory requirement and has to be strictly complied with. Once the requirement of Section 434 of service of notice on the registered office of the company is held to be a mandatory requirement, there is no question of there being any substantial compliance with the provisions because the settled rule of law that a mandatory requirement of statute requires a strict compliance and there is no question of any substantial compliance. The concept of 'substantial compliance' comes in only in case the provision is held to be directory. A perusal of the judgment of the Karnataka High Court relied on by learned counsel for the petitioners shows that, according to the Karnataka High Court, substantial compliance with the requirement of serving notice on the registered office is enough. It is, therefore, implicit in that judgment that, according to the Karnataka High Court, the requirement of Section 434 of serving demand notice at the registered office is not a mandatory requirement, but is a directory requirement. Because the Karnataka High Court has in detail considered whether the requirement has been substantially complied with or not, discussion about 'substantial compliance' or otherwise is possible only in case the provision is directory. If the provision is mandatory, then there is no question of substantial compliance, the court insists on strict compliance. So far as the judgment of the learned single judge in Mukund Kanaiyalal Patel's case [2002] 109 Comp Cas 413 (Bom) referred to above is concerned, in that case the court has found that the notice of change of address that was given was itself unauthorised because there was no resolution passed by the board of directors of the company and that case was also not a case of failure of the company to give notice at the registered office. However, in that judgment also, the court has noted that the requirement of service of demand notice on the registered address of the company is a mandatory requirement and therefore has to be strictly complied with. In my opinion, considering the law laid down by the Division Bench in N.L. Mehta Cinema Enterprises (P.) Ltd.'s case [1991] 70 Comp Cas 31 (Bom), there is no room for debate that the requirement of serving of demand notice on registered address of the company is a mandatory requirement and, therefore, there is no question of considering whether though the notice was not served at the registered office of the company, it has been replied to or that it was sent at the address which is not a registered address because of a representation made by the company. All those considerations will come in, in case the requirement is held to be directory to find out whether the requirement has been substantially complied with but as the law so far as this court is concerned is that the requirement is mandatory, in my opinion, there is no scope for debate whether in the present the notice has been substantially complied with or not. In this view of the matter therefore, the preliminary objection as to the maintainability of the petition, as the statutory notice was admittedly not served at the registered office of the company, this company petition cannot be entertained. It is disposed of.
10. Parties to act on the copy of this order duly authenticated by the Company Registrar/personal secretary as true copy.
11. Certified copy expedited.