2018 (1) TMI 1594 - Tri - Companies Law

Winding up petition - direction to the company for repayment to the deposit holders - Refund of Fixed Deposits amount with interest - section 73(4) of the Companies Act, 2013 - case of petitioner is that in spite of the maturity period is over, fixed deposit amounts have not been returned to them by the company - HELD THAT - Section 446 of the Companies Act, 1956 says that no legal proceedings shall be commenced after winding up order has been made or the official liquidator is appointed as provisional liquidator, except by leave of the court. In the case on hand, winding up Petition No. 35 of 2013 filed under the provisions of the Companies Act, 1956 is pending before the hon'ble High Court of Madhya Pradesh by the date of filing of this petition under section 73(4) of the Companies Act, 2013 - It is a fact that, the petitioners did not obtain leave of court at the time of filing this petition or during the pendency of this proceedings. In view of the pendency of winding up Petition No. 35 of 2013 and in view of section 446(1) of the Companies Act, 1956, proceedings filed by the deposit holders cannot be proceeded with at the instance of deposit holders against Plethico Pharmaceuticals Ltd. In fact, the petitioners are entitled to their deposit amount with unpaid interest at the agreed rates and the company has to make payment of such amount on par along with other creditors and other liabilities - petition disposed off.

Summary

Issues:
Petitioners seeking refund of fixed deposit amounts with interest from a company under section 73(4) of the Companies Act, 2013. Company failed to return deposits despite maturity, orders from Company Law Board, and dismissal of extension petition by National Company Law Tribunal. Company faced winding up petition, sought relief from State Government, and challenged notifications. Company also filed for extension of time for repayment of deposit holders which was dismissed by National Company Law Tribunal. Petitioners did not obtain court leave for proceedings under section 446 of the Companies Act, 1956. High Court orders prevented coercive actions against the company. Liquidator appointed in winding up petition, pending writ petition, and petitioners advised to approach High Court for refund.

Analysis:
The petitioners in this case had deposited their money with a pharmaceutical company in fixed deposits before April 1, 2014. They approached the Tribunal seeking directions for the company to refund their fixed deposit amounts with interest as per section 73(4) of the Companies Act, 2013. Despite the maturity period being over, the company did not return the fixed deposit amounts to the petitioners, even after orders from the Company Law Board and the dismissal of the company's extension petition by the National Company Law Tribunal. The petitioners highlighted the company's non-compliance and the relevant background for the Tribunal's consideration.

The company faced a winding up petition initiated by Citibank N. A., London branch, and the High Court of Madhya Pradesh admitted the petition and appointed a provisional liquidator. The company sought relief from the State Government under the Madhya Pradesh Sahayta Upkarm Adhiniyam, 1978, and challenged notifications related to the winding up proceedings. The company's application for an extension of time for repayment of deposit holders under section 74(2) of the Companies Act, 2013 was dismissed by the National Company Law Tribunal, which refused to grant an extension for payment.

The Tribunal noted that the petitioners were entitled to their deposit amounts with interest as per agreed rates, but due to the pendency of the winding up petition and the High Court orders, the proceedings filed by the deposit holders could not proceed without court leave under section 446 of the Companies Act, 1956. The High Court's order preventing coercive actions against the company further complicated the situation. The Tribunal advised the petitioners to approach the High Court of Madhya Pradesh in the winding up petition for the refund of their deposit amounts, considering the appointment of a liquidator and the pending writ petition. Ultimately, the petitions were disposed of accordingly.