Public Deposits - Repayment ‑ Applicability of section 58A(9), in the case of a relief undertaking declared by a local Act or Central Act - Companies Law - Circular : No. 3 of 1990,

Circular : No. 3 of 1990, dated 19 ‑ 2 ‑ 1990. Subject:- Public Deposits - Repayment ‑ Applicability of section 58A(9), in the case of a relief undertaking declared by a local Act or Central Act I am directed to say that several States have promulgated Acts to provide financial assistance to relief undertakings, like, the Bombay Relief Undertakings (Special Provisions) Act, 1958, the Rajasthan Relief Undertakings (Special Provisions) Act, 1961, etc. Under the said enact ments, the State Government may, by notification, inter alia, direct that in relation to any relief undertaking and in respect of the period for which the relief undertaking continues as such, any right, privileges, obligation or liability accrued or incurred before the undertaking was declared a relief undertaking and any remedy for the enforcement thereof shall be suspended and all proceedings relating thereto pending before any court, Tribunal officer or authority shall be stayed. The said provisions have come up for judicial scrutiny by different High Courts in Tiruppur Cotton Spg. Wvg. Mills Ltd. v. Khimji Poonja Co. [1988] 64 Comp. Cas. 349 (Mad.), Jaysynth Dyechem v. Mewar Textile Mills Ltd. [1988] 64 Comp. Cas. 334 (Raj.) and Mohan Bai v. Smt. Jai Kishan AIR 1988 Raj. 22. The ratio decidendi of these cases is that having regard to the provisions of the said Act, the monetary liabilities of the relief undertakings during the notified period stand suspended and any proceedings, including proceed ings under section 58A(9) of the Companies Act, 1956, shall remain stayed. Action under section 58A(9) of the Act can be considered only after the expiry of the period for which the relief undertakings have been so notified.