THAPAR AGRO MILLS LTD Vs. STATE

JUDGEMENT

(1.) THE Northern Region Bench of the Company Law Board has received a number of complaints of non-repayment of fixed deposits by Thapar Agro Mills Ltd. (hereinafter called "the company") having its registered office at W-50, Greater Kailash II, New Delhi. Over a period of time the total number of petitions received under Section 58A(9) of the Companies Act, 1956 (hereinafter called "the Act"), has swelled to 1029 in respect of fixed deposits amounting to roughly Rs. 1.50 crores. Thus, a large number of the investing public have been inconvenienced by the failure of the company to repay the public deposits in accordance with the terms and conditions of such deposits. THE jurisdiction of the Company Law Board has, therefore, been invoked under Section 58A(9) of the Act by the aggrieved depositors.

(2.) Immediately after the receipt of applications at the first instance, the Bench office forwarded copies of such applications to the company and also called for various particulars regarding deposits. The Bench did not receive any information from the company either with regard to the repayment or with regard to the other particulars called for. The first hearing in this case was fixed for April 15, 1996, at which none appeared from the company. Thereupon, the Bench directed the office to collect the addresses of directors and serve notice on them to be present at the time of next hearing. Accordingly, notice was issued to the directors of the company to appear before the Bench on June 13, 1996. On this date none of the directors summoned was present. There was no written representation either from the company in reply to the applications. The advocate representing the company was told that the directors should be present at the next hearing on August 22, 1996, and should also produce a concrete plan for repayment of the deposits. On August 22, 1996, the chairman of the company, Shri Satish Thapar, was personally present but'could not produce any information called for including the scheme for repayment of the deposits. Another 15 days' time was granted to the company to file the relevant information as well as particulars of deposits already paid off as contended by the chairman of the company. Thereafter, on September 18, 1996, all the directors were again reminded of the information to be furnished by the company since no information was received. In reply to this communication the company provided on October 9, 1996, a part of the information, namely, the balance-sheet as on June 30, 1995, and a list of depositors who have been repaid. In addition the company also stated in their communication that it wishes to make a monthly payment of Rs. 1,50,000 on a first-come first-served basis. The matter was again fixed for hearing on November 27, 1996, on which date none appeared from the company. However, a letter dated November 26, 1996, was received seeking adjournment of the matter on account of a consortium meeting with the bankers and a pollution control case at a Ludhiana court, both scheduled for the same day. On this date an order was passed by this Bench affording a final opportunity to the company and its directors. The company was also directed to file proceedings of the consortium meeting and cash flow projections for the next three years in order to decide this matter. Thereafter, on December 12, 1996, the chairman of the company, Shri Satish Thapar, was present and he again sought time to file the information called for * which was granted. He was also directed to file an affidavit containing proposals for repayment. The matter was adjourned to February 3, 1997. On this date none of the directors or officers of the company was present and a practising company secretary represented the company. He, however, had no briefing with regard to the plans of repayment of the deposits. He could only pass on an unaudited and unsigned balance-sheet of the company as on June 30, 1996. The company was still provided a further one week's time on February 3, 1997, to file an affidavit containing particulars called for. An affidavit has now been received from the company though no particulars as called for were given. The Bench proceeded to decide the matter on the merits based on earlier submissions, records and information available before it.

(3.) A study of the audited balance-sheets as on June 30, 1995, brings out prominently the following irregularities in the company :