Report No. 143
Government of India,
6th May, 1991.
Dear Chairman of Company Law Board,
Re.: Exercise of suo moto powers under section 58A(9).
This has reference to my communication No. 5/L.C.(CH), dated 19th April, 1991, regarding the exercise of suo moto powers by the Company Law Board under sub-section (9) of section 58A of the Companies Act in the case of M/s. Ambalal Sarabhai Enterprises Limited, Wadi Wadi, Baroda.
2. In para. 8 of the said communication it has been mentioned that the particulars regarding names and amount due to the depositors can be obtained by the Company Law Board as the Law Commission has not been able to procure this information. After the aforesaid communication was despatched, we have received a letter dated 16th April, 1991, from M/s. Ambalal Sarabhai Enterprises Limited, with which they hal. enclosed a list giving details of matured claimed and unpaid deposits as on 31st March, 1991 which have remained outstanding for a period, exceeding 60 days from the date of maturity.
The letter (with its enclosure) is annexed and marked as Annexure 'E'. It shows that an amount of Rs. 73.15 lakhs was due for repayment to 1,373 depositors: out of this, a sum of Rs. 64.65 lakhs was repayable to as many as 1,337 small depositors whose deposits were less than Rs. 11,000 each, and the balance of Rs. 8.50 lakhs to the remaining 36 depositors.
3. The analysis of the aforesaid data reveals a very disturbing state of affairs. Out of 1,337 small depositors as many as 1,259 are those whose deposits are of the order of Rs. 6,000 or less. Out of these:
115 are waiting for nearly 5 years since 1986;
241 are waiting for nearly 4 years since 1987;
360 are waiting for nearly 3 years since 1988;
23 are waiting for nearly 2 years since 1989;
464 are waiting for nearly 1 year since 1990;
56 are waiting for nearly 6 months till now.
4. The aforesaid analysis underscores the helpness of the desperate depositors who: (1) cannot afford to initiate the legal process individually as the money-cost, time-cost and effort-cost would outstrip the amount at sake, and (2) cannot act collectively as they do not know the other depositor's identity. So also this analysis focuses on the need for urgent action by way of suo moto proceedings under section 58A(9).
5. The aforesaid analysis also reinforces the request made in para 6 of my previous communication dated 19th April, 1991 for dispensing with the presence of the concerned depositors.
6. In response to a complaint received by the Commission and forwarded to the Company on 14-1991 the Company has sent another communication dated 19th April, 1991 relating to non-payment of principal/interest to the depositors, a photostat copy whereof is annexed as Annexure 'F'.
7. The request made in my previous Communication is therefore, reiterated. The Commission will be grateful to you for taking suitable action at an early date.
With warm regards,
Shri S.P. Upasani,
Company Law Board,
Western Region, Bombay,
C/o. Government of India,
Department of Company Affairs,
Room No. 504, 'A' Wing,
Encls.: Annexure 'E' & 'F'