2020 (4) TMI 517 - AT - Companies Law

Default in repayment of Fixed Deposit which got matured - HELD THAT - It is not in dispute that the Respondent accepted deposit in the shape of FDR on 1.6.2013, 20.06.2013, 28.11.2013 and their maturity date was in 2016. It is also not in dispute that the Respondent company has not paid the maturity amount to the appellants on their due date inspite of various requests made by the appellants. It is also not in dispute that the Respondent did not appear before NCLT despite accepting notice, no reply was filed. The arguments of the Respondent that the Hon ble Supreme Court has directed that no coercive steps should be taken against the company or directors is concerned, no coercive steps have been taken by the appellants against the respondent company and its directors - if the respondent makes an attempt to get fresh deposits from the public then the company will not get at cheaper rate but at a higher rate because the depositor will only give deposit seeing the risk factor of his deposit. Appellants are entitled to a decree under their respective matured FDR - amount is decreed in favour of the respective appellant together with pendent lite and future interest @ 12.5% p.a. from the date of maturity of the respective FDR till receipt thereof - Respondent will pay ₹ 50000/- each to the above three appellants towards cost of litigation, costs etc. - Appeal allowed.

Issues Involved:
1. Non-payment of matured fixed deposit amounts.
2. Interest rate applicable on matured fixed deposits.
3. Compliance with Section 74(2) and Section 76A of the Companies Act, 2013.
4. Impact of Supreme Court orders on the proceedings.
5. Award of litigation costs.

Detailed Analysis:

1. Non-payment of matured fixed deposit amounts:
The appellants, who are depositors, filed appeals under Section 421 of the Companies Act, 2013, seeking quashing of the National Company Law Tribunal (NCLT) orders dated 30th May 2019. The appellants had invested in fixed deposits (FDRs) with the respondent company, which matured in 2016 but were not paid despite repeated requests. The NCLT had directed the respondent to pay the matured amounts with interest, but the appellants contested the interest rate awarded.

2. Interest rate applicable on matured fixed deposits:
The appellants argued that the NCLT erred in awarding pendent lite and future interest at 10% per annum instead of the agreed 12.5% per annum. They contended that the interest should have been awarded from the date of maturity. The appellate tribunal found that the NCLT had unjustifiably reduced the interest rate and failed to award interest from the maturity date to the date of filing the petition, thereby rewarding the defaulting company and punishing the honest depositors.

3. Compliance with Section 74(2) and Section 76A of the Companies Act, 2013:
The appellants highlighted that the respondent's failure to repay the deposits contravened Section 73 and Section 76 of the Companies Act, 2013. Section 76A outlines penalties for such contraventions, including fines and imprisonment for officers in default. The appellate tribunal noted that the respondent did not appear before the NCLT despite accepting notice, indicating a default.

4. Impact of Supreme Court orders on the proceedings:
The respondent argued that the NCLT's orders violated Supreme Court directives, which stated that no coercive steps should be taken against the company or its directors. The appellate tribunal clarified that no coercive steps were taken by the appellants and criticized the respondent for using the Supreme Court's orders to hinder legal processes. The tribunal emphasized that rules are meant to protect depositors' interests and not to reward defaulting companies.

5. Award of litigation costs:
The appellants sought litigation costs, arguing that they incurred expenses at the NCLT and the appellate tribunal. The appellate tribunal agreed, noting that the appellants had to bear court fees and other costs due to the respondent's default. The tribunal decreed that the respondent should pay ?50,000 to each appellant towards litigation costs.

Conclusion:
The appellate tribunal set aside the impugned orders of the NCLT and allowed the appeals. The tribunal decreed that:
1. The appellants are entitled to the matured amounts of their respective FDRs with pendent lite and future interest at 12.5% per annum from the date of maturity until receipt.
2. The respondent must pay ?50,000 to each appellant towards litigation costs.

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