2012 (4) TMI 433 - HC - Companies Law

No response to notices in lieu of Procedure for Early Redemption of Bonds - transfer of unpaid dividend account of a company to the fund established IEPF under Section 205C Writ Petition Held that - Section 205 C is a salutary and virtuous provision enacted to ensure that a company does not unjustifiably and unduly enrich themselves, as the depositors have failed to stake claim and have not been paid for a period of seven years from the date the amount became due no reason to hold that the said provisions are unconstitutional or they violate Article 14 of the Constitution - serious lapses on the part of the petitioner as no intimation of change of address ,hence could not be communicated about the premature redemption and no bother to read the terms and conditions of allotment including the early redemption clause - when a matter either on question of fact or on a question of law decided between two parties in one proceeding and the decision is final either because no appeal was taken to a higher Court or because the appeal was dismissed, neither party will be allowed in a future proceedings between the same parties to canvas the matter again.

Summary

Issues:
1. Early redemption of unsecured redeemable bonds by ICICI.
2. Transfer of unclaimed principal amount to the Investor Education and Protection Fund (IEPF).
3. Challenge to the vires of Sections 205A and 205C of the Companies Act.
4. Application of the principle of res judicata in the case.

Issue 1: The respondent, ICICI, issued unsecured redeemable bonds with a validity of 25 years but exercised an early redemption option within five years as per the bond certificates. The notice of early redemption was duly published, but the petitioner failed to respond, leading to the transfer of the unclaimed amount to the IEPF.

Issue 2: The Companies Act was amended to transfer unclaimed amounts to the IEPF after a specified period. ICICI transferred the unclaimed principal amount from the redeemed bonds to the IEPF, following the circular issued by the Department of Company Affairs.

Issue 3: The petitioner challenged the vires of Sections 205A and 205C of the Companies Act, arguing that the Parliament lacked legislative power to enact Section 205C. The court upheld the validity of these sections, emphasizing their public interest nature and the need for claimants to adhere to the specified timelines for redemption.

Issue 4: The court applied the principle of res judicata, stating that the petitioner could not challenge the same provisions of law on different grounds after a previous writ petition was dismissed. The comparison of relief sought in both petitions revealed similar prayers, leading to the dismissal of the present writ petition based on the principle of finality in judicial decisions.

In conclusion, the court dismissed the present writ petition, affirming the validity of Sections 205A and 205C of the Companies Act and upholding the application of the principle of res judicata in the case.