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2019 (6) TMI 524 - AT - Companies LawFailure to make repayment of deposit with interest u/s 74(3) - registration of original Applicant Lal Chand Singhal as a client/constituent member of the Company - HELD THAT - In view of the fact that the original Applicant Lal Chand Singhal has compromised with the Appellants and has received his dues and has no more grievances against the Appellants, we intend to quash the Impugned Order. As the original Applicant has compromised with the Appellants, any action purely on the basis of the grievances of the Respondent original Applicant Lal Chand Singhal of failure to pay deposit, should not survive - However, if after the Impugned Order was passed, if the ROC has collected any other material against the Appellants, relating to any other similar failure to repay deposits or any other failures on the part of the Appellants under the Companies Act, we do not intend to protect the Appellants from action on the basis of any such other material. As the Appellants have compromised the matter with the Respondent original Applicant relating to his grievances under Section 73(4) of the Companies Act, 2013 and now the Respondent original Applicant has been repaid his deposits with interest, we give liberty to the Appellants to request the District Sessions Court, Dwarka or to move any other authority before which any enquiry or action is pending for suitable relief, if, in case the same is purely founded on the basic grievance of Respondent Applicant that the Company had failed to repay his deposit. Appeal disposed off.
Issues:
1. Impugned Order passed by National Company Law Tribunal under Section 73(4) of the Companies Act, 2013. 2. Allegations of non-payment of deposit by the respondent company and subsequent actions. 3. Settlement between the parties and withdrawal of Company Appeal 38/2018. 4. Directions to quash the Impugned Order and potential actions by ROC and SFIO. Issue 1: The National Company Law Appellate Tribunal heard appeals filed by the appellants against the Impugned Order dated 21.11.2017 passed by the National Company Law Tribunal. The original applicant, Lal Chand Singhal, had claimed non-repayment of a deposit with interest by the respondent company, Moongipa Investments Limited, under Section 73(4) of the Companies Act, 2013. The NCLT directed the ROC to initiate prosecution against the directors and allowed the applicant to seek recovery of the principal amount with interest in execution proceedings. Issue 2: The NCLT observed allegations of fund misappropriation by the directors but noted the lack of specific details to substantiate the claims. The tribunal declined to order attachment of personal properties based solely on allegations without evidence, stating such actions fall under the jurisdiction of a civil court. The NCLAT directed the ROC to refer the matter to SFIO for an inquiry into fund siphoning and to take steps to protect the funds. Issue 3: The parties settled the matter between them, leading to the withdrawal of Company Appeal 38/2018. The appellants and Lal Chand Singhal signed a Memorandum of Understanding (MOU) on 27.08.2018, agreeing to payment terms for the outstanding amount. Lal Chand Singhal received a partial payment and agreed to the MOU terms for the remaining payments to be made by a specified date. Issue 4: Upon subsequent hearings, Lal Chand Singhal confirmed receiving all due payments and expressed no further grievances against the appellants. The appellants sought to quash the directions of the NCLT for prosecution under Section 73(4) of the Companies Act, 2013, as the original applicant had withdrawn the appeal and settled the matter. The NCLAT reviewed the ROC's complaint and decided to quash the Impugned Order as Lal Chand Singhal had been repaid, but left room for further action if the ROC or SFIO had gathered additional evidence unrelated to the initial grievance. In conclusion, the NCLAT disposed of the appeals, acknowledging the settlement between the parties and quashing the directions of the NCLT regarding prosecution under Section 73(4) of the Companies Act, 2013. The tribunal allowed the ROC and SFIO to proceed with any other investigations or actions based on separate material beyond the original grievance of non-repayment of the deposit.
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