SUNIL AMBWANI, J. - (1.) THIS company petition has been filed under Section 45 -MC of Reserve Bank of India Act, 1934 to wind up respondent -company and to appoint Official Liquidator, High Court, Allahabad or some other fit and proper person to be appointed as liquidator and further to appoint provisional liquidator to take charge of company's properties and assets, its books of accounts, papers, vouchers etc. and to issue ad interim injunction restraining the respondent, its servants, agents and assignees from encumbering, transferring, alienating and disposing of any of the assets of the respondent company.
(2.) THE Reserve Bank of India issued Non -Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998 to regulate acceptance of deposits by companies carrying on the business of non -banking financial institutions, in exercise of powers conferred by Sections 45 -J, 45 -K and 45 -L of the Reserve Bank of India Act, 1934. Respondent Company, namely, Kuber Mutual Benefits Limited, having its registered office at Kuber Bhavan, Begum Bridge Road, Meerut (U.P.)was incorporated on September 30, 1991. The Company is a Non -Banking Financial Company and was bound by the aforesaid Directions of 1998. The company has paid -up capital of Rs. 44.09 lakhs as on 31 -3 -1998 and was declared as 'NIDHI' Company under Section 620 -A of the Companies Act, 1956 on March 18, 1993, and was exempted from the provisions of Section 45 IA, IB and IC of the RBI Act, 1934. It was further denotified from the 'NIDHI' status by the Central Government on March 26, 1999. An inspection was carried out by the Reserve Bank of India in which it was found that the company was not complying with the provisions of Chapter III -B of the RBI Act and the directions issued by the Bank for companies declared as 'NIDHI' companies. Under Section 45 IA of the Act, a company cannot carry on the business of non -banking financial activity unless it has a certificate of Registration issued by the Bank. The Company did not apply for grant of certificate of Registration after being denotified from the status of 'NIDHI' Company on 26 -3 -1999 but continued to carry on the business in violation of the aforesaid provision. It also failed to repay the amounts due to the depositors and that a number of complaints were received by the Bank from the members of the public against the company. The latest balance -sheet available with the bank shows total assets of Rs. 194.02 crores against total liabilities of Rs. 194.02 crores as on 31 -3 -1998. The Reserve Bank of India issued a prohibitory order to the company on April 5, 1999 restraining it from accepting deposits and the same is in force for a period of more than three months. Civil Misc. Writ Petition No. 16458 of 1999 was preferred by the Company before this Court for quashing the notification dated 26 -3 -1999 issued by the Ministry of Law, Justice and Company Affairs, Government of India, New Delhi and consequential communication dated 5 -4 -1999 issued by the Reserve Bank of India. The Reserve Bank of India filed a complaint against the company and its Directors under Section 58 -B read with Section 58 -C of the Act for violation of the provisions of the Act. The complaint dated 18 -6 -1999 is pending before the Court of Chief Judicial Magistrate, Meerut. The company petition was thereafter filed with the averments that the continuance of the company as a Non -Banking Financial Company will not serve any public purpose but will be detrimental to the public interest and to the interest of the depositors of the company. Section 45 -MC of the RBI Act, 1934 provides that the Bank may file winding up application against a Non -Banking financial Company if following conditions are satisfied : - (a) It is unable to pay its debt, or (b) It has by virtue of Section 45 -IA become disqualified to carry on the business of a non -banking financial institution, or (c) It has been prohibited by the Bank from receiving deposit by an order and such order has been in force for a period of not less than three months; or (d) Its continuance is detrimental to the public interest or to the interest of depositors of the company.
(3.) NOTICES were issued on the company petition on 27 -10 -1999 . These were returned undelivered with the postal remarks as Left without address written to sender. The Court as such directed advertisement to be made in newspapers Hindustan Times (English) published from New Delhi and 'Amar Ujala' (Hindi) published from Meerut within a month. The order was carried out and the publication was made by the Bank. On 27 -3 -2000, Sri Anurag Khanna Advocate stated that he had instructions to appear on behalf of respondent. He was allowed time to file counter -affidavit which was extended on 6 -7 -2000 and 8 -8 -2000 but no counter -affidavit was filed. On 26 -11 -2001, this Court admitted the petitioner for advertisement and directed that the steps be taken for advertisement under Rule 24 of the Companies (Court) Rules, 1959 within two weeks. The notices were to be published in the 'Hindustan Times' (English) published from New Delhi and 'Amar Ujala' (Hindi) published from Meerut. The Official Liquidator U.P. Allahabad attached to this Court, was appointed as provisional liquidator and was directed to take possession of the assets of the company and to make inventories therefor, and that an injunction was issued restraining respondent company, its directors, agents or any authority dealing with the assets of the company from transferring, alienating, disposing of or encumbering the property in any manner whatsoever except without prior permission of this Court. The advertisement was carried out, as directed by this Court.;