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TMI Blog2020 (3) TMI 1345X X X X Extracts X X X X X X X X Extracts X X X X ..... ther remedy under the law to recover the amount which they have deposited with the Corporate Debtor but so far initiation of the Section 7 of the IBC is concerned, the present application is not maintainable. Application dismissed. - (IB) 2978 (ND)/2019 - - - Dated:- 12-3-2020 - ABNI RANJAN KUMAR SINHA, MEMBER (J) AND KAPAL KUMAR VOHRA, MEMBER (T) ORDER Abni Ranjan Kumar Sinha, Member (J) 1. The present application is filed under Section 7 of the IBC, 2016 ( Code ) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 against the default committed towards the Financial Creditors by the Corporate Debtor. 2. As per the averments, the Corporate Debtor had floated two 'investment schemes' under the plans entitled the 'Recurring Investment Plan' and the 'Lump-sum Investment Plan' to collect investments from individuals investors hailing from small town and villages in India. These schemes were floated by the Corporate Debtor soon after its incorporation in the year 2011. The schemes were floated carrying term periods of 3 years to 10 years under the 'Recurring Investment Plan' schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Corporate Debtor, which the Financial Creditors enclosed from page 84 to 98 of the application and in lieu of that, the Corporate Debtor promised to pay the interest and the said deposit is for five years. Further, the claim of the Financial Creditors is that the Corporate Debtor also promised to allot land in lieu of that amount and in support of that, the Financial Creditors have enclosed the Original/photocopy of the certificate issued by the Corporate Debtor as well as brochure and the sample copy of the agreement. We have gone through the deposit certificate filed by the Financial Creditors, which are from Page No. 84 to 98 of the application and we find that it is a deposit scheme for five years and the matured amount is also shown in the certificate, which includes the interest. So far the sample copy of the agreement is concerned, that is not duly signed by the persons, therefore, we are unable to take cognizance of the documents on the basis of which certificate was issued by the Corporate Debtor in respect of the amount deposited by the Financial Creditors along with advance. 5. At this juncture, we would like to refer the definition of Financial Debt and Financi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 76 of the Companies Act, 2013 and the same is quoted below: - 73. Prohibition on acceptance of deposits from public.-- (1) On and after the commencement of this Act, no company shall invite, accept or renew deposits under this Act from the public except in a manner provided under this Chapter: Provided that nothing in this sub-section shall apply to a banking company and non-banking financial company as defined in the Reserve Bank of India Act, 1934 (2 of 1934) and to such other company as the Central Government may, after consultation with the Reserve Bank of India, specify in this behalf. (2) A company may, subject to the passing of a resolution in general meeting and subject to such rules as may be prescribed in consultation with the Reserve Bank of India, accept deposits from its members on such terms and conditions, including the provision of security, if any, or for the repayment of such deposits with interest, as may be agreed upon between the company and its members, subject to the fulfilment of the following conditions, namely:-- (a) issuance of a circular to its members including therein a statement showing the financial position of the company, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on remains unpaid on such commencement or becomes due at any time thereafter, the company shall-- (a) file, within a period of three months from such commencement or from the date on which such payments, are due, with the Registrar a statement of all the deposits accepted by the company and sums remaining unpaid on such amount with the interest payable thereon along with the arrangements made for such repayment, notwithstanding anything contained in any other law for the time being in force or under the terms and conditions subject to which the deposit was accepted or any scheme framed under any law; and (b) repay within one year from such commencement or from the date on which such payments are due, whichever is earlier. (2) The Tribunal may on an application made by the company, after considering the financial condition of the company, the amount of deposit or part thereof and the interest payable thereon and such other matters, allow further time as considered reasonable to the company to repay the deposit. (3) If a company fails to repay the deposit or part thereof or any interest thereon within the time specified in sub-section (1) or such further time as may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was deposited prior to the enforcement of this Section and as per Section 74(1)(b), the company is liable to repay the amount within 3 years from such commencement on or before expiry of the period from which the deposit is accepted, whichever is earlier and if the company fails to repay the amount then there is a penal provision U/S 74(3) of the Companies Act, 2013. Here, in the case as we have already held that the Financial Creditors everywhere mentioned the word 'deposit', therefore, the amount which he has deposited with the Corporate Debtor does not come within the purview of the definition of Financial Debt rather the Financial Creditors, admittedly, deposited the amount with the Corporate Debtor and in lieu of that he was getting interest from the Corporate Debtor, therefore, he can claim the refund under Chapter V of the Companies Act, read with Company (Acceptance of Deposits) Rule, 2014. 7. So far, the initiation of proceeding under Section 7 of the Code is concerned, in our view, is not liable to be accepted. At this juncture, we would also like to refer the arguments of the applicants that there is a default in payment of debt, therefore, Section 7 appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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