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Judgment
Virendra Kumar Gupta., Member (Technical)
In this CP, the applicant is seeking a direction from this Tribunal to direct the respondents to redeem fully paid secured redecirable inconvertible debentures in their favour along with interest. The amount involved is to the tune of
र5,19,520/- plus interest thereon.
In this application ex-parte order qua respondents has been passed by this Tribunal on 04.08.2021 as none appeared since beginning.
This matter was also under consideration of the flon'ble Allahabad High Court in Writ Petition No.32642/2018, which was dismissed by the Hon'ble High Court as misconceived and petitioners were directed to get their grievance redressed by the National Company Law Tribunal. Accordingly, this matter has come before this Tribunal.
During the course of hearing, the Ld. Counsel for the applicants submitted that the applicants are farmers and had given money to the respondent no. 1. It is further brought to our notice that the respondent no. 1 collected roughly Z1000 crore from the general public and failed to repay the money including interest thereon. Criminal proceedings had also been initiated against the respondent no. 1 company as well as its Directors which were pending.
At this stage, the Bench asked even if an order is passed in favour of the applicants how the same would be executed. The Ld. Counsel replied that they will take appropriate steps as per the provisions of law for the execution of the same. As regard to the evidence of money being given and amount of claim, our attention was drawn to Pages 27 to 49 of the paper book containing copies of relevant documents.
We have considered the submissions made on behalf of the applicants and also perused the records.
Section 71(10) stipulates the conditions under which the Tribunal may direct the Company to redeem the debentures. The conditions as indicated are that the Company should have either failed to redeem the debentures on the date of their maturity or failed to pay the interest thereon on their due date. The other conditions to be satisfied before the Tribunal passes an order is that the Tribunal is required to hear the parties concerned. In the present case, the respondents have not chosen to appear before this Tribunal in spite of opportunities granted.
It is evident from the records that the respondent no. 1 company has collected money from general public and has failed to repay the same. Criminal complaints have also been lodged by various depositors. It is also noted that the depositors had also approached Securities and Exchange Board of India which vide its order dated 25.02.2016 (as mentioned in the petition) restrained and prohibited the promotors /directors in dealing in securities from the date of order till the expiry of four years from the date of completion of refund to the investors. In our view the matter is in an instance of collective investment scheme which falls under the jurisdiction of Securities and Exchange Board of India under the provisions of SEBI Act, 1992
In Akhil R. Kothakota and another vs Tierra Farm Assets Company Pvt. Ltd. (Company Appeal (AT) No. 39 of 2020 decided on 09.11.2020), the Hon'ble NCLAT has held that section 71(10) provides a clear mechanism for issue and repayment of debentures, including enforcement of payment obligations. Once the factum of default is established, this Tribunal is obligated to pass an order in terms of section 71(10) of the Act. This will be in addition to any action that SEBI may take against the company and its promoters and directors under SEBI Act,1992.
In this view of the matter, this Tribunal hereby directs the repayment of the redeem fully paid secured redeemable inconvertible debentures in their favour along with interest within a period of six months from the date of pronouncement of this order.
CP No.44/ALD/2020 shall sand disposed of accordingly.
Certified copy of the order may be issued, if applied for, upon compliance of all requisite formalities.