PUSHPA SINGH Vs. BPL LIMITED

JUDGEMENT

(1.) THIS is an application filed under Section 58A(9) of the Companies Act, 1956 ('the Act') against BPL Limited (formerly known as British Physical Laboratories India Limited) ('the Company') for non-repayment of the deposit amount together with interest. The application came up for hearing from time to time and finally on 29-11-2001.

(2.) The facts, in brief, as reiterated by Shri K. Harish, Advocate for the applicant are that the applicant had deposited a sum of Rs. 5,00,000 on 12-7-1993 with the company by way of fixed deposit for a period of three years carrying interest at 15 per cent per annum. Though the company had paid interest for the period from 1-4-1994 to 31-3-1995, it had failed to pay interest for the period from 12-7-1993 to 31-3-1994 and 1-4-1995 till date. The fixed deposit was matured on 11-7-1996. In spite of repeated demands and the complaint lodged with Securities and Exchange Board of India, the company failed to repay, the principal amount and pay the outstanding interest due to the applicant, on the ground that the company had appropriated the deposit amount together with interest towards the dues of Shree Electronics, a partnership firm in which the applicant is one of the partners. Shree Electronics was dealer for the products manufactured by the company. Consequent upon termination of the dealership agreement, the company had filed a suit in O.S. No. 10380 of 1995 on the file of City Civil Court at Bangalore for recovery of Rs. 17,86,000 against Shree Electronics and appropriated the deposit amount towards part of the suit claim. Shri Harish urged that the fixed deposit is in the individual name of the applicant. The company cannot appropriate the fixed deposit amount towards the liability of Shree Electronics being a different legal entity. The appropriation is bad in law. Shree Electronics had filed a Civil Suit before the Civil Judge Court at Lucknow in O.S. No. 172 of 1995 against the company for appointment of an arbitrator to resolve the dispute in regard to the dealership agreement between Shree Electronics and the company. The applicant had also preferred an application under Section 20 of the Arbitration Act, 1940 in the Suit No. 10380 of 1995 filed by the company for stay of the suit proceedings till disposal of the arbitration suit filed before the Lucknow Court. Shri Harish pointed out that the dispute between Shri Electronics and the Company cannot be a bar for repayment of the deposit in favour of the applicant. In the circumstances, Shri Harish urged that the company should be ordered to repay the deposit amount together with up-to-date interest.

(3.) SHRI Harish in his reply has stoutly contended that the deposit amount has never been kept as a security deposit with the company and that the affidavit relied upon by the company does not indicate that the applicant agreed to keep the deposit as a security deposit. He further pointed out that the applicant had kept the fixed deposit in her individual name and that the deposit was neither pledged to the company, in which case the deposit could not be adjusted towards dues of Shree Electronics. In the circumstances, SHRI Harish sought for appropriate orders against the Company for repayment of the deposit.