2015 (6) TMI 219 - Board - Companies Law

Application for extension of time for payment to deposit-holders after maturity - Application u/s 74(2) of the Companies Act, 2013 - Exemption from maintaining liquid assets as required under clause (c), sub-section (2) of Section 73 of the Companies Act, 2013 and Rule 13 of the Companies (Acceptance of Deposit Rules, 2014 - Whether reschedulement of deposits are allowed in Companies Act, 2013 - Held that - On seeing innumerable complaints coming from various depositors complaining that this company has not even cleared the deposits already matured, which the company ought to repay to the depositors as agreed by the company, therefore, I hereby hold that the company failed to clear the cases of matured fixed deposits and has not made any serious efforts in clearing the deposits already matured long before, leave of the other prematured deposits lying with the company against which several complaints come to the applicant company and various Government Authorities, it could be evident from the application that the company is not likely to dear the dues as mandated by the statute, it is understandable that company is genuinely making efforts to clear the dues, if it had cleared the FOs already matured. On the contrary, the company has come with its projections linking payments to the depositors to its projections so as to say it will require time more than that company mentioned in the agreements entered into with the depositors. I made it clear that under new Act there is no provision for reschedule of deposits, it has all been done away with in the new Act, reschedule of deposits is a history now. However, the company is granted 30 days time to clear all matured deposits along with interest accrued from the date of this order, as to the complaints demanding payment of premature deposits, the company shall pay premature deposits along with interest @12%, preferably, within 30 days time from the date of this order.The company is directed to pay FDs as per order of maturity. As to premature deposits, the company has to pay giving priority to date of maturity and date of complaint received by CLB, Ministry of Corporate Affairs, the company and by other Government Authorities. - Decided against the appellant.

Summary

Issues:
1. Application for extension of time for payment to deposit-holders after maturity under Section 74(2) of the Companies Act, 2013.
2. Seeking exemption from maintaining liquid assets as required under Section 73(2)(c) and Rule 13 of the Companies (Acceptance of Deposit) Rules, 2014.
3. Failure to repay matured fixed deposits (FDs) despite profitability and multiple complaints from depositors.
4. Appointment of a Hardship Committee to monitor and ensure repayment of deposits.

Analysis:

1. The applicant company filed an application seeking an extension of time for payment to deposit-holders after maturity, citing financial figures and intentions to repay the outstanding dues promptly. The company acknowledged its liabilities and assets, highlighting its efforts to run profitably and effectively. It mentioned its repayment history and the deployment of funds in various projects as per the applicable laws.

2. The Company Law Board (CLB) passed an order detailing the payment schedule for dues up to 31.3.2015, specifying different timelines for varying deposit amounts. Additionally, the company requested exemption from maintaining liquid assets, as mandated by the Companies Act, 2013 and the Acceptance of Deposit Rules, 2014.

3. Several depositors appeared before the Bench, expressing grievances regarding non-payment of matured FDs despite the company's reported profits and assets. The CLB noted the numerous complaints received from depositors and government authorities, emphasizing the company's failure to clear matured deposits and lack of serious efforts in repayment.

4. In response to the situation, the CLB clarified the mandate of the Companies Act, 2013 regarding repayment of all collected deposits, whether matured or prematured, by a specified deadline. The company was granted a limited time frame to clear matured deposits and instructed to pay premature deposits with accrued interest promptly. A Hardship Committee was established to monitor the repayment progress and report back to the Bench regularly.

This detailed analysis covers the key issues addressed in the legal judgment, including the company's financial obligations, depositors' complaints, regulatory compliance, and the establishment of a monitoring mechanism to ensure timely repayment of deposits.