9911796707
TMI Blog1993 (9) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1991. Admittedly, the issues of fact and law are common and the learned counsel for the parties are agreed that this order will govern all of them. 2. The representative matrix of facts may be noticed in Usha Rectifier Corpn. (I) Ltd. v. Surinder Kumar [First Appeal No. 56 of 1993]. The complainant-respondent in his complaint had alleged that the appellant-corporation got permission of the Controller, Capital Issues, Department of Companies, New Delhi for raising capital for their new project at Faridabad which was of the cost of Rs. 711 crores. The amount was to be collected by way of public issue of 14 per cent fully convertible deben- tures as well as rights issues. Debentures of the value of Rs. 162 crores were offered to the gener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile examining the observations made by the State Commission of Gujarat in Usha Rectifier Corpn. v. Shah Dhansukh Lal Sakar Lal [Appeal No. 68 of 1992, dated 28-8-1992] had observed in the order under appeal that the learned State Commission had felt that the failure of public issue could not be considered to be unfair trade practice and the subscribers who had applied for shares/debentures could not have a legal right to demand their moneys back unless the company failed to get the mini- mum subscription as envisaged in section 69 of the Companies Act, 1956 ('the Act') which lays down a mandate for a company that it must receive minimum of 90 per cent subscription against the entire issue before making the allotment of shares or debentures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance, Department of Economic Affairs on 22-1-1990 has submitted that the minimum subscription of 90 per cent clause was introduced on 6-4-1990, which came into effect from 8-4-1990 through a notification issued by the Ministry of Finance and that since 90 per cent of the minimum subscription was not there at the time of the appellant's issue was released. Section 69 was not applicable to the appellant's case and that the District Forum was in error in holding that the complainant-respondent was entitled to the refund of application money under section 69. It is contended that section 69 was amended after the appellant's issue was over and it was specifically mentioned therein that the amendment will come into force from 8-4-1990. We are fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares shall be deposited and kept deposited in a Scheduled Bank- (a)until the certificate to commence business is obtained under section 149,or (b)where such certificate has already been obtained, until the entire amount payable on applications for shares in respect of the mini-mum subscription has been received by the company, and where such amount has not been received by the company within the time on the expiry of which the moneys received from the applicants for shares are required to be repaid without interest under sub-section (5), all moneys received from applicants, for shares shall be returned in accordance with the provision of that sub-section. (5) If the conditions aforesaid have not been complied with on the expiry of on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 69 clearly shows that it is nowhere mentioned therein that if the collection is far less than 90 per cent of the entire issue then the entire amount collected with applications must be refunded to the applicants at the end of 90 days from the closure of issue. However, in the guidelines for issue of fresh share capital, issued by the Government of India, Ministry of Finance in the press note of 22-1-1990 specifically mentioned in clauses 9 and 10 that if the collection was far less than 90 per cent of the entire issue then the entire amounts collected with applications must be refunded to the applicants at the end of 90 days from the closure of issue along with interest at the rate of 15 per cent per annum and these guidelines would ..... X X X X Extracts X X X X X X X X Extracts X X X X
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