2021 (6) TMI 690 - Tri - Companies Law

Seeking direction to respondent-company to pay back the fixed deposit amounts matured - HELD THAT - The applicant has placed on record the proof of depositing the amount with the respondent-company by way of copies of the deposit receipts issued and duly signed by the company. The accepted rate of interest payable by the respondent-company on the deposited amount is also specified in the application. In view of the clear documentary proof of deposit by the applicant, this Bench has satisfied with the submissions of the applicant and it is directed that the respondent-company to return the deposit amount along with the contracted rate of interest to the applicant within thirty days from the date of this order - application disposed off.

Issues Involved:
1. Non-repayment of matured fixed deposits.
2. Allegations of procedural lapses and forgery.
3. Conflicting claims by deposit holders.
4. Investigation under the Prohibition of Benami Property Transactions Act, 1988.
5. Compliance with KYC requirements.
6. Allegations of misuse of office and money laundering.
7. Jurisdictional and procedural objections raised by the applicant.

Issue-wise Detailed Analysis:

1. Non-repayment of matured fixed deposits:
The applicant sought a direction for the respondent-company to repay the fixed deposit amounts that matured on August 22, 2019, and August 24, 2019, along with interest at 11% from the date of maturity till repayment, as per the terms and conditions of the deposit. The respondent-company failed to refund the deposit amount despite repeated demands, which led to the filing of this application.

2. Allegations of procedural lapses and forgery:
The respondent-company alleged that the applicant's father, a former director, had misused his position to include his daughter’s name as the first deposit holder on fixed deposit receipts, in contravention of standard operating procedures. The respondent highlighted procedural lapses during KYC audits and claimed that some depositors had instructed the company not to pay the maturity proceeds to the applicant.

3. Conflicting claims by deposit holders:
Due to conflicting claims by deposit holders, the respondent-company renewed the deposits for a further 12 months and retained the original FD receipts. The company received instructions from some depositors to pay the maturity proceeds to them individually, not to the applicant.

4. Investigation under the Prohibition of Benami Property Transactions Act, 1988:
The respondent-company filed a complaint with the Assistant Commissioner of Income-tax to investigate the title to 448 deposits, alleging that the transactions were "Benami" as per the Benami Transactions (Prohibition) Amendment Act, 2016. The Deputy Commissioner of Income-tax (Benami Prohibition) issued a show-cause notice and prohibited the transfer of the deposits during the pendency of proceedings.

5. Compliance with KYC requirements:
The respondent sought the applicant to furnish KYC documents of joint depositors and to execute a duly notarized indemnity bond to enable repayment of the matured deposits. The applicant contended that the company already had all relevant information and that there was no need for additional KYC documentation.

6. Allegations of misuse of office and money laundering:
The respondent alleged that the applicant’s father misused his office to engage in money laundering, converting third-party deposits to "E or S" deposits in favor of his family members. The respondent also highlighted ongoing criminal investigations and complaints filed against the applicant's father for forgery and fraudulent investment in fixed deposits.

7. Jurisdictional and procedural objections raised by the applicant:
The applicant raised several objections, including the counter not being signed by the respondent-company, the relevance of the father's directorship, habitual defaults in deposit repayments by the respondent, and the irrelevance of third-party issues. The applicant sought directions for repayment of deposits with accrued interest and investigations into the respondent-company’s compliance with statutory regulations.

Judgment:
The tribunal found clear documentary proof of the applicant's deposits with the respondent-company and directed the respondent to return the deposit amount along with the contracted rate of interest within thirty days. Additionally, the applicant was directed to file a copy of the order with the Registrar of Companies, Chennai, who was instructed to take appropriate action against the company and its directors for defaulting on deposit repayments. The application (C. A. No. 57 of 2020) was thereby disposed of.

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