2010 (6) TMI 663 - Board - Companies Law

Summary

Issues Involved:
1. Entitlement to Post Maturity Interest (PMI) at 10%.
2. Requirement of succession certificate.
3. Entitlement for repayment despite non-surrender of fixed deposit receipts within 30 days prior to maturity.
4. Binding nature of the order dated May 18, 2009.
5. Correctness of the calculation made by the applicants.

Issue-wise Detailed Analysis:

1. Entitlement to PMI at 10%:
The Company Law Board consistently mandated that PMI be paid at 10%. The company's contention against this was repeatedly refused. Thus, in the execution proceedings, the Bench upheld the order dated February 12, 2009, and June 30, 2008, affirming that PMI at 10% must be paid, rendering the company's objections invalid.

2. Requirement of Succession Certificate:
The High Court had previously dismissed the necessity of a succession certificate for the payment of deposits and accrued interest. The company's attempt to raise this issue in execution proceedings was deemed meritless. The proceedings aimed at enforcing an order already confirmed by the High Court, thus the Bench could not reassess the merits of entitlement.

3. Entitlement for Repayment Despite Non-Surrender of Fixed Deposit Receipts:
The issue of whether the applicants are entitled to repayment despite not surrendering fixed deposit receipts within 30 days prior to maturity was considered a matter for the main case, not for execution proceedings. Consequently, the company's contention was invalidated.

4. Binding Nature of the Order Dated May 18, 2009:
The order reducing PMI from 10% to 7% was passed without involving the applicants and did not specify its applicability to them. Therefore, the Bench ruled that this order did not bind the applicants and did not affect the finality of the February 12, 2009, order. The Bench lacked the power to review the February 12, 2009, order, thus maintaining the 10% PMI directive.

5. Correctness of the Calculation Made by the Applicants:
The company did not contest the amount of Rs. 48,12,418.52, except for the interest rate. The Bench found the applicants' calculation correct, noting that the company had already paid Rs. 24,96,956. The remaining balance of Rs. 23,15,462.52 plus interest was due to the applicants. The applicants' acceptance of partial payment under protest entitled them to the balance.

Reliefs and Orders:
The Bench appointed a Special Officer to take possession of and sell the company's tea stocks to satisfy the balance due. Other reliefs, such as an injunction on the company's assets and the appointment of a special officer for rent collection, were not granted due to insufficient disclosure of property values and rents by the applicants. The application was partly allowed, with liberty to the applicants to seek further relief if the sale proceeds of the tea stocks were insufficient to cover the outstanding balance and costs.