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Judgment
These Applications have been moved under Section 73(4) of the Companies Act, 2013 by the Depositors of M/s. Zenith Birla (India) Limited, the Respondent Company. These Applicants have invested in the Fixed Deposit Schemes proposed by the Company from the year 2010 onwards pursuant to the provisions of Companies (Acceptance of Deposit) Rules, 1975. Sections 73(3) and 73(4) of the Companies Act, 2013 have been reproduced below:
“Section 73: Prohibition on acceptance of deposits from public.
(3) Every deposit accepted by a company under sub-section (2) shall be repaid with interest in accordance with the terms and conditions of the agreement referred to in that sub-section.
(4) Where a company fails to repay the deposit or part thereof or any interest thereon under sub-section (3), the depositor concerned may apply to the Tribunal for an order directing the company to pay the sum due or for any loss or damage incurred by him as a result of such non-payment and for such other orders as the Tribunal may deem fit.”
The Applicants submit that the amounts deposited in the Scheme had become due in the year 2012. Yet 10 years on, neither the Principal amount nor the interest component have been repaid to the Applicants in accordance with the Scheme. The Applicants say that they have faced several financial hardships in this period. The problem was aggravated by the fact that majority of them were senior citizens suffering from various health issues. Additionally, since their retirement funds were also blocked, these Applicants were left in a lurch. All these events have caused considerable mental agony to the Applicants.
The Respondent submits that proceedings regarding the same issue are pending before the Ld. MPID Court, Mumbai where the Respondent Company has deposited a sum of Rs. 24 Crores for the purpose of distribution amongst all the Depositors of the Respondent Company. The Respondent clarifies that the aforesaid amount was realized after auctioning certain parcel of land situated at Oshiwara, Mumbai and deposited in an account maintained with State Bank of India at the rate of 4.25% interest per annum. Several Applications seeking distribution of the said amount are pending before the MPID Court and the Respondent prays for a direction from this Bench to direct the disbursal of the amount deposited with the MPID Court amongst the Applicants.
The argument of the Applicants is further buttressed by the fact that the Respondent Company previously made repayments of the principal amount to several depositors including the interest component up to the date of repayment in adherence to prior orders of this Tribunal, primarily the Order dated 19th November 2018 (hereinafter called “said Order”). The following was observed in the said Order:
“Number of hearings took place in the past and the Company had paid the Principal amount along with Interest up to the date of maturity. Undisputedly, there was delay in repayment. These Applicants have informed that even after the lapse of due date, when maturity took place, the defaulter Company had not refunded the money. Only under the directions of NCLT, Mumbai Bench, the amount was refunded along with Interest only up to the date of maturity.”
We have heard the submissions of the Applicants and the Counsel appearing for the Respondent. It is an admitted position that there was an inordinate delay in repayment of the deposit amounts and the interest duly payable on maturity of these deposits. A perusal of the details of the Applicants reveals that most of these Fixed Deposits matured between 2013 and 2015. The total sum payable to the present Applicants amounts to a little over Rs. 75 Lakhs only (Rupees Seventy-Five Lakhs only) including interest up until 31st July 2022. The total amounts payable to each depositor including interest is tabulated as follows:
Sr.
No.
CP No.
Name of Depositor
Maturity Date
Total Amount (in Rs.)
1.
2043/MB
/2019
Saniel Dilip
Karkhanis
9th May 2015
8,18,120/-
2.
C.P. No. 4422/MB
/2018
Rati Ram
Khodana
12th January 2014
90,960/-
Neville Sam
Khodana
90,960/-
3.
C.P. No. 4435/MB
/2018
Leela
Uttarkar
11th June 2013
59,700/-
Parshuram
Uttarkar
7th June 2013
61,960/-
4.
C.P. No. 4436/MB
/2018
Indubala
Ramchandra Shah
19th Novemb er 2013
69,650/-
5.
C.P. No. 2180/MB
/2019
Anup
Kumaar Mahapatra
2nd June 2013
4,02,500/-
6.
C.P. No. 1770/MB
/2019
Kohinoor K Das
5th June 2014
86,305/-
7.
C.P. No. 1771/MB
/2019
Vijay
Shantilal Madhani Huf
19th January 2014
67,764/-
8.
C.P. No. 1772/MB
/2019
Mayur Vijay Madhani Huf
19th January 2014
79,058/-
9.
C.P. No. 1773/MB
/2019
Pravina Bhupendra
Shah
4th January 2014
67,764/-
10.
C.P. No. 1774/MB
/2019
Chimanlal
Tarachand Mehta
3rd Novemb er 2010
2,46,040/-
Chimanlal Tarachand Mehta
8th June 2015
1,03,934/-
11.
C.P. No.
421/MB/
2019
Rajamani Sampath
19th February 2013
94,305/-
12.
C.P. No. 438/MB/ 2019
Rajesh Sanghvi & Smita Rajesh
Sanghvi
14th Decemb er 2013
92,800/-
13.
C.P. No. 575/MB/
2019
Mabel
D’souza
7th October 2014
58,800/-
14.
C.P. No. 635/MB/
2019
Ashvin Chandulal Shroff
30th March 2014
79,588/-
Ashvin
Chandulal Shroff
2nd July 2015
84,423/-
Bhavna
Chandulal Shroff
11th June 2015
84,147/-
15.
C.P. No. 643/MB/
2019
Asha Hariharan
28th January 2014
1,81,533/-
16.
C.P. No.
644/MB/
2019
Hariharan Venkatesan
7th Septemb er 2013
10,28,442/-
17.
Comp
App No. 715/2017
Anila B Shah
11th June 2013
3,01,875/-
18.
Comp App No. 716/2017
Anila B Shah (Bhupendra N Shah)
27th February 2014
3,80,000/-
19.
C.P. No. 1298/MB
/2019
Sunil Kishinchand
Dudeja
19th August 2015
53,159/-
20.
C.P. No. 1299/MB
/2019
Santha R. Shinoy
22nd January 2016
85,852/-
Ravindranath a Shinoy
22nd January 2016
85,852/-
21.
C.P. No. 4341/MB
/2018
Venkatesh Gopal
12th January 2013
40,427/-
Mythili Venkatesh
12th January 2013
50,456/-
Mythili Venkatesh
31st August 2013
83,419/-
22.
C.P. No. 4342/MB
/2018
Kusum Ramniklal
Desai
15th July 2013
83,072/-
Asha Parekh Desai
15th July 2013
51,920/-
23.
C.P. No. 4343/MB
/2018
Mukundlal
Mathuradas Shah
27th August 2013
83,850/-
24.
C.P. No. 4346/MB
/2018
Jabeen Zafar
1st August 2013
4,19,421/-
Nazia Zafar Shah
1st August 2013
4,18,324/-
25.
C.P. No. 3342/MB
/2018
Vashsev Jhangiram
Talreja
15th Novemb er 2015
78,800/-
26.
C.P. No. 3344/MB
/2018
Kanchan Govind
Talreja
15th Novemb er 2015
39,400/-
27.
C.P. No. 3345/MB
/2018
Vimla Vasudev
Talreja
15th Novemb er 2015
78,800/-
28.
C.P. No. 2200/MB
/2019
Rekha Dilip Karkhanis
9th May 2015
10,22,647/-
29.
C.P. No. 2202/MB
/2019
Bharagulatta Rawal
4th January 2014
56,470/-
9th April 2014
56,470/-
Niranjankum
ar Rawal
9th April 2014
56,470/-
Bhavin Rawal
6th December 2014
34,781/-
Jignaben Rawal
5th August 2015
56,463/-
30.
C.P. No. 4032/MB
/2018
Rajendra Hiralal Safary
2nd Septemb er 2013
81,800/-
Minaxiben R
Safary
81,800/-
31.
C.P. No. 3421/MB
/2018
R Vijayalakshmi
31st Decemb er 2013
68,178/-
This Tribunal has dealt with the issue of grant of the interest component in the said Order related to the same Respondent in similar circumstances and noted the following:
“As far as the natural justice is concerned, there is no two opinion that the Company had retained the Deposit amounts for its business purposes which was otherwise to be paid to all the depositors on the due date of maturity. In other words, the Company has used the money of the public for number of years for its business purposes. Therefore, it is an accepted commercial principle to pay Interest to a person whose money is used by the Borrower for its business advantage.”
With regard to facts and circumstances of the instant case, we are of the opinion that the Respondent Company is clearly at default and is liable to repay the deposit amounts to the Applicants along with the interest component up to the respective maturity dates and penal interest for the entire period of default. The conduct of the Respondent is, evidently, in contravention of Section 73(3) of the Companies Act, 2013 and it is noted that the Respondent’s financial condition is conducive for making repayments to the Applicants. Thus, the Respondent is hereby directed to disburse all the pending amounts to the respective depositors according to the table as indicated above including the interest component until 31st July 2022. With the above observations, the Company Petitions are allowed and disposed of.