DHEEP RAJAPPA Vs. A SIVASUBRAMANIAN

JUDGEMENT

(1.) THIS is an application filed by the applicant under regulation 44 of the Company Law Board Regulations, 1991 seeking to modify and rectify the order dated 25-1-1999 of the Company Law Board ('the CLB') in CA No. 3725/45QA/SRB of 1998, to the effect that the applicant is not liable for the failure of Vedha Benefit Fund Ltd. ('the Company') to repay the deposits.

(2.) The facts, in brief, as reiterated by Shri. A.K. Mylsamy, advocate for the applicant, arc that the company while in the course of accepting deposits from the public had taken two deposits each of Rs. 50,000 from the applicant. The company had failed to repay the deposits on maturity. Consequently, the applicant moved the CLB for directing the company to repay the deposits, upon which the. CLB ordered notice to the company as well as its directors including the applicant. The applicant contended that he ceased to be a director with effect from 8-12-1995 and, therefore, was not liable to repay the deposit amount in favour of the applicant. After hearing the submissions of the applicant, the CLB by its order dated 25-1-1999 ordered the company to repay the deposit amount together with interest by 28-2-1999 and further ordered that the company, its directors and concerned officers shall ensure compliance of this order within the stipulated period. As the company has failed to repay the deposit amount within the stipulated time, the applicant has lodged a police complaint against the company and its directors including the applicant. According to Shri Mylsamy, the applicant had resigned his office as a director and submitted his resignation by a letter dated 8-12-1995, in which case the applicant would be deemed to have resigned from his office from the date of submission of his resignation. He placed reliance on I.T.C. Ltd. v. M.R.T.P. Commission [1976] 46 Comp. Cas. 619 (Cal.) and Vasant Investment Corpn. Ltd v. Colaba Land & Mill Co. Ltd. [1977] 47 Comp. Cas. 662 (Bom.) to show that a resignation once made will take effect immediately. The applicant, therefore, has to proceed only against the company and present directors. In the circumstances, Shri Mylsamy has sought to rectify the order dated 25-1-1999 of the CLB appropriately.

(3.) SHRI Mylsamy, in his reply, white refuting the arguments of the counsel for the respondent, reiterated that a resignation once made will take effect immediately and that filing of Form No. 23 is only a procedural formality. He, therefore, sought for the relief made in the application.