Manmohan Singh, J.

1. Present winding up petition has been filed under Section 433(e) read with Sections 434 and 439 of the Companies Act, 1956 (for short ‘Act’) stating that respondent is unable to pay its debts.

2. The facts as stated in the petition are that on 04th September, 1996, the respondent company (Lunar Finance Limited) passed a Board Resolution guaranting the loan amount of Rs. 52,55,500/- advanced by the petitioner to the principal debtor. By virtue of the said Board Resolution, the respondent company pledged certain shares as Collateral Security. On 09th September, 1996, a Tripartite Agreement cum Pledge was executed between the petitioner (Lender), Lunar Diamonds Limited (Principal Debtor) and respondent-guarantor.

3. However, as the cheques issued by the principal debtor were dishonoured, the parties on 09th September, 1996 entered into a fresh Agreement cum Pledge amongst the petitioner, principal debtor and respondent-guarantor. Two cheques were also issued by the principal debtor towards the principal amount and interest.

4. In June, 1999, the petitioner’s name was changed from M/s. CRA Global Securities to M/s. Global Infosystems Limited.

5. As the principal debtor defaulted in repaying the loan, on 12th February, 2000, petitioner issued statutory winding up notice to the respondent.

6. Since no reply was received by the petitioner, on 07th March, 2000, present winding up petition was filed.

7. On 09th August, 2004, proceedings were stayed as the principal debtor had become a sick company under Sick Industrial Companies (Special Provisions) Amendment Act, 1993 (‘SICA’).

8. On 13th May, 2010, as the principal debtor was ordered to be wound up by BIFR, present proceedings were revived.

9. Mr. Virender Ganda, learned senior counsel for petitioner submitted that respondent had guaranteed repayment of loan obtained by the debtor by way of bill discounting facility and the same was recoverable from the respondent independent of the principal debtor. He further stated that respondent-guarantor’s liability was co-extensive with that of the principal debtor.

10. On the other hand, Mr. Niraj Kumar Singh, learned counsel for the respondent submitted that as the statutory winding up notice had not been served upon the registered office of the respondent company, the presumption of inability to pay debts under Section 434 of the Act did not arise in the present case. According to him, in view of the admitted fact that the statutory notice had not been served on the registered office of the respondent company, the present petition had to be dismissed at the threshold. In this connection, he relied upon a judgment of the Punjab & Haryana High Court in Nuchem Ltd. v. C.S. Modi And Co. Pvt. Ltd. 2002 Vol. 109 Company Cases 715 (P&H) wherein it has been held as under:-

“It is clear from the aforesaid clause that requirement under the Negotiable Instruments Act is only of giving notice. There is no requirement of ensuring effective service of the said notice. For the aforesaid reason, it cannot be said that the deliberation of the Apex Court in the judgment relied upon by learned counsel for the petitioner can be applied to the facts and circumstances of the present case. So far as the issue of giving notice is concerned, the same would definitely be governed by the observations made by the Supreme Court.

The Companies Act requires that a company which is to pay a debt must be informed of the same, and must be called upon to discharge its debt through a notice. The notice must actually be served on the respondent-company. Thereafter, if despite service of notice, the company does not discharge its debt, it is open to the creditor to file a winding up petition. Since I have already recorded above that in the facts and circumstances of the instant case, notice cannot be deemed to have been actually served on the respondent, it is, therefore, futile to proceed any further with this petition. Accordingly this petition is dismissed