AIRFORCE NAVAL HOUSING BOARD Vs. KIRAN OVERSEAS EXPORTS LIMITED

JUDGEMENT

(1.) THE applicant-depositor in Kiran Overseas Exports Limited (hereinafter referred to as the "company") has made this application under Section 58A(9) of the Companies Act, 1956 (hereinafter referred to as the "Act") submitting that the company failed to repay the deposit in full together with interest thereon. THE said application came up for hearing and disposal before this Bench from time to time on June 1, 1998, June 29, 1998, July 30, 1998, and finally on August 11, 1998.

(2.) During the final hearing, Commander N.N.S. Manian, project director, and representative of the company submitted that the applicant is a welfare organisation serving Air Force and Naval personnel on no profit and no loss basis. The applicant endeavours to meet housing needs of the retired Air Force and Naval personnel and widows of the deceased Air Force and Naval personnel. The contribution made by the members has been invested with the company and the income from such investment is utilised for the welfare of the members. Accordingly, the applicant has made a deposit of Rs. 50 lakhs with the company for six months repayable on or after May 27, 1997. The company has repaid an aggregate sum of Rs. 20 lakhs on various dates and failed to repay the balance of Rs. 32 lakhs due to the applicant. Consequently, the applicant is not in a position to meet its obligations towards its members, who are adversely affected. In the circumstances, Commander Manian submitted that the company may be directed to repay the entire outstanding amount due to the applicant by September 30, 1998.

(3.) THE company is affected by the economic recession and sluggish market conditions in India and abroad. THE company is taking all steps to increase the sales and ease out the liquidity problems and approached Wellbred Asset Management (Bahamas) Limited, Miami, USA. THE negotiations are under progress with the said company in the USA and the company is hopeful of improving the financial position in the years to come and the market conditions are expected to change for the better. In the circumstances, counsel for the company has sought for repayment holiday of one year and three years time to repay the balance of the deposit in six half-yearly instalments. In this connection, he relied upon Pure Drinks (New Delhi) Limited, In re [1995] 83 Comp Cas 174 (CLB) and Nuchem Limited, In re [1997] 3 Comp LJ 338.