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TMI Blog2022 (1) TMI 913X X X X Extracts X X X X X X X X Extracts X X X X ..... wherever required, to deal in the goods or properties or services for which the money is taken, then the amount received shall be deemed to be a deposit under the respective rules. Admittedly, the 1st petitioner company had purchased the agricultural land and after obtaining the permission from the competent authorities for conversion of agricultural land into non-agricultural land, the 1st petitioner also obtained permission for development of the land into layout of plots for residential/commercial housing. To unlock the funds invested in development of the lay outs etc., the 1st petitioner company had offered to sell the land in its possession and for this purpose entered into written agreement/arrangement - By virtue of proviso to Rule 2 (1) (c) (xii) (b) of the Companies (Acceptance of Deposits) Rules, 2014, the advances received by the 1st petitioner for sale of immovable property are exempted from the purview of the deposits. In view of the proviso to Rule 2 (1) (c) (xii) (b) of the Companies (Acceptance of Deposits) Rules, 2014, continuation of proceedings against the petitioners/A-1 to A-5 would amount to abuse of process of the Court - petition allowed. - CRIMINAL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has offered to sell the land in its possession and for this purpose entered into a written agreement/arrangement. Since real estate projects involve long gestation period, in order to attract customers, in some cases, the 1st petitioner has given an option to the potential buyers (Applicants) to make part payment of the total sale consideration i.e., 80% as an advance and to pay the balance consideration of 20% within the period opted by the applicant in the application. The intention behind this is to give an opportunity to the buyer to fully satisfy himself as to the real progress of the layout and its surrounding areas within the time opted by him and if so satisfied, to pay the remaining 20% and complete the transaction by executing a sale deed. To opt for this scheme of payment, the applicant is required to purchase a minimum of five square yards of land (and in multiples thereof) with a put option with advance notice for discharging his part of the obligation for paying the balance 20% of the total land cost or seek refund of the advance paid by him, if not satisfied with the actual development. Since the advance paid by the applicant/buyer (for the purchase of undivided shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken cognizance as C.C.No.28 of 2020 for the offences punishable under Section 73 of the Act. The present Criminal Petition is being filed by the petitioners/ A-1 to A-5, to quash the proceedings against them in the above C.C. Heard learned Counsel for the petitioners, learned Counsel for the 1st respondent and learned Assistant Public Prosecutor for the 2nd respondent and also perused the record. Learned Counsel for the petitioners would submit that the complaint filed by the 1st respondent under the provisions of the Act suffers from infirmities and is a gross abuse of process of law. He further submits that the allegations against the petitioners under Section 73 of the Act are not maintainable inasmuch as the amounts accepted by the 1st petitioner do not come under the purview of deposits as they are purely in the nature of an immovable property transaction. He further submits that a perusal of the provisions of Rule 2 (1) (c) (xii) (b) of the Companies (Acceptance of Deposits) Rules, 2014, makes it very clear that the Rules exclude the advances received towards sale consideration of immovable property, pursuant to an agreement or arrangement from the purview of deposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) of the Companies (Acceptance of Deposits) Rules, 2014 are not applicable to the 1st petitioner company in view of the fact that the 1st petitioner company has intentionally been collecting advance and paying interest on such advance without actual sale of property for which the agreement/M.O.U. was entered into between the 1st petitioner company and its subscribers. He also submits that it is irrelevant to state whether or not such collected advance is refunded as such refund is not in accordance with the above Rule as the 1st petitioner company never intended to adjust such collected money for the sale of immovable property, which is evident from the Balance Sheets of the 1st petitioner company showing the opening balance, amount accepted during the year, amount refunded during the year, balance lying at the end of the year and interest paid to the applicants during the year. Thus, the petitioners have committed the offence punishable under Section 76-A of the Act by violating Section 73 of the Act. A perusal of the material on record would show that basing on the complaints lodged by one Guruzala Venkateswara Rao on various dates alleging that the 1st petitioner company ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the considered view that it is high time that the abuse of process of Court is put an end to by imposing costs. Hence, the Writ Petition is dismissed. The petitioner shall pay costs of ₹ 50,000/- to the High Court Legal Services Committee, within a period of eight (8) weeks from today. Therefore, I find considerable force in the contention of the petitioners that the said Guruzala Venkateswara Rao foisted many false complaints against the 1st petitioner company in order to settle his personal scores with the 1st petitioner and the other group of companies. Further, the said Guruzala Venkateswara Rao is neither allottee nor he is in any way directly involved or linked with the business transactions of the petitioners. At this stage, the short point that arises for consideration is whether the amounts collected by the petitioners for sale of immovable property as advance would come under the purview of deposits or would exempt from the purview of deposits by virtue of Rule 2(1) (c) (xii) (b) of the Companies (Acceptance of Deposits) Rules, 2014 ? Before proceeding further, it would be appropriate to refer to Rule 2 (1) (c) (xii) (b) of the Companies (Acceptance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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