K.K.Balu, - (1.) THESE applications in C A. No. 609/634A/SRB/2002, C. A. No. 70/634A/SRB/2003, C. A. No. 71/634A/SRB/2003 and C. A. No. 442/634A/SRB/2003 are filed by Shri A. Seshacharyulu, Smt. P. Jagadeswari, Shri P. Srinivas and Shri Kalangi Venkata Narayana, respectively, under Section 634A of the Companies Act, 1956 ("the Act") for enforcement of the order dated November 24, 2000, made against M/s. Pennar Industries Ltd. ("the company") to repay the deposits together with interest thereon in accordance with the scheme approved by the Company Law Board (CLB). The company has failed to repay the deposit amount in compliance with the order of the CLB. Hence the applications. The applications came up for hearing before this Bench from time to time and finally on May 26, 2003. As the company is common and relief sought in these applications is one and the same, they are disposed of by this common order.
(2.) The facts, in brief, are that the applicant in C. A. No. 609 of 2002 had kept with the company two deposits under FDRs Nos. 15708 for Rs. 80,000 and 15705 for Rs. 40,000 on May 19, 1999, and July 19, 1999, respectively. The applicant in C. A. No. 70 of 2003 had deposited Rs. 46,000 under FDR No. 15470 on May 20, 1999. The applicant in C. A. No. 71 of 2003 had a deposit of Rs. 46,000 under FDR No. 15469 on May 20, 1999. All these deposits were for a period of two years. The applicant in C. A. No. 442 of 2003 had kept 11 deposits under FDRs Nos. 12321 to 12331 of each Rs. 25,000 and a deposit of Rs. 17,000 under FDR No. 12303 on April 1, 1999, aggregating Rs. 2,92,000 for a period of one year. Though all these deposits were matured, the company had failed to pay the maturity amount of the deposits to these applicants save an amount of Rs. 25,000 in C. A. No. 442 of 2003. As per the order of the CLB dated November 24, 2000, the company ought to have repaid all the deposits above Rs. 10,000 together with interest from the date of deposits till date of payment within 30 months from the date of maturity or date of order of CLB whichever is later at 35 per cent, of the principal amount during the first year, 35 per cent, of the principal amount in the second year and balance of 30 per cent, of the principal amount together with the entire interest thereon in the third year. Accordingly, the applicants in C. A. Nos. 609 of 2002, 70 and 71 of 2003 are by now entitled to receive 70 per cent, of the principal amount of each of their deposits and the applicant in C. A. No. 442 of 2003 for the balance matured principal amount of Rs. 2,67,000 together with interest. However, the company has failed to make any payment in accordance with the order dated November 24, 2000. Shri D. B. Saxena, advocate appearing for the company has submitted that one of the creditors has filed a Company Petition No. 19 of 2002 under Section 433 of the Act before the High Court of Andhra Pradesh for winding up of the company. The winding up proceedings are pending. By virtue of Section 446 actionable claims against the company cannot be proceeded with without the leave of the winding up court. Shri Saxena, relying upon the decision in Maiyan Dalip Rajeshwari Debi v. Sri S. Mohan Bikram Sah, AIR 1945 All 409, pointed out that a fixed deposit is not a deposit of specie, but a debt or an actionable claim and accordingly the proceedings before the CLB cannot be proceeded with without the leave of the winding up court. The company's accumulated losses as at the end of the financial year ended June 30, 2002, exceeded its net-worth, a reference has been made to the Board for Industrial and Financial Reconstruction ("BIFR"), under the proviso to Sub-section (1) of Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 ("SICA"), and the reference has been registered by the BIFR as case No. 87 of 2002. By virtue of Section 22, no legal proceedings against a sick industrial company can be proceeded with without the consent of the BIFR, in support of which Shri Saxena relied on Patheja Bros. Forgings and Stamping v. ICICI Ltd. [2000] 102 Comp Cas 21 (SC). According to Shri Saxena, the proceedings under Section 634A are recovery proceedings for recovery of the deposit amount having an element of execution unlike a claim made by depositors for the return of their deposits after maturity made Section 58A(9) of the Act, in support of which he heavily relied on Deepak Insulated Cable Corporation Ltd. v. Union of India [2001] 104 Comp Cas 401 (Karn). Shri Saxena, therefore, urged that Section 634A proceedings cannot further be proceeded with without the consent of the BIFR.
(3.) I have considered the submissions made on behalf of the applicants and the company. It is on record that the company petition filed by one of the creditors against the company before the High Court of Andhra Pradesh for winding up is pending. Therefore, the claim made by the applicants for repayment of the deposits, being actionable claims, as has been held in Maiyan Dalip Rajeshwari Debi, AIR 1945 All 409 cited supra can further be proceeded with the leave of the winding up court. It is further observed that the reference made by the company to the BIFR under Sub-section (1) of Section 15 of the SICA has been registered as Case No. 87 of 2003 which is pending. Against this background, Section 22(1) of the SICA assumes importance which reads as under : "Where in respect of an industrial company, an inquiry under Section 16 is pending or any scheme referred to under Section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under Section 25 relating to an industrial company is pending, then, notwithstanding anything containing in the Companies Act, 1956 (1 of 1956), or any other law or the memorandum and article of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof (and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company) shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority.";