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Report No. 143

Before the Company Law Board, Western Region Bench, Bombay

Present: Shri S.P. Upasani, Chairman,

In the Matter of M/s Ambalal Sarabhai Enterprises Ltd.

And

In the Matter of Section 58a(9) Of The Companies Act, 1956

Company Applns. No. 17132, 17190 to 17199, 17279 to 17288, 17342 to 17344, 17394 to 17407, 17500, 17502 to 17507/58A(9)/CLB/WR/91.

Order

There are in all 45 applications made by depositors under section 58A(9) of the Companies Act, 1956 for non-repayment of deposits by M/s. Ambalal Sarabhai Enterprises Limited (hereinafter referred to as the 'Company'). It is stated that inspite of reminders, the company has not repaid deposits on due dates.

2. A reference dated 19-4-91 was received on 22-4-91 from the Commission of India, pointing out that the company has also not repaid to 1,312 depositors a sum of Rs. 71.96 lakhs of principal amount and interest due thereon, as per the terms and conditions of the deposits. As the grievances of depositors have not been redressed by the company, it was suggested in the reference that the Company Law Board should initiate sue MOO proceedings in respect of these Outstanding deposits.

The matter was considered by the Company Law Board and a notice was issued to the company on 24-4-91 calling for information about the status of repayment of principal as well as interest on overdue deposits of 1,312 depositors and directing the company to remain present for hearing on 16-5-91 at Bombay.

3. The matter was heard on 17-5-1991, when Shri M.N. Parikh, Director and Shri K. Subramanian, Secretary of the Company appeared. It was stated that the company has over a period of time (from 1-4-87 to 31-3-1991) substantially reduced the fixed deposits which were around Rs. 627.37 lakhs as on 1-4-1987 to Rs. 192.88 lakhs. Similarly, the fixed deposits matured but remaining unpaid, which aggregated to Rs. 385. 95 lakhs as on 31-3-1988 have been brought down to Rs. 77.11 lakhs as on 31-3-1991.

It was also submitted that the company has been making sincere efforts to repay the matured fixed deposits at the earliest, but certain factors, which were beyond the control of the company had adversely affected its operations and the company has been incurring heavy operating losses for the last few years, which has imposed severe liquidity constraints on the company. The company has given a scheme for repayment of deposits remaining unpaid as under:-

Maturity Period

No. of Accounts

Amount (Rs. lakhs)

Repayment Schedule

Upto December 1986

143

9.6

Before 30-6-1991

1-1-1987 to 31-12-1987

253

14.07

July/August 1991

1-1-1988 upto 31-3-1991

1,060

53.44

Upto June 1991

77.11

In addition the company shall ensure that the interest on current live deposits is paid in time and it shall undertake payment of overdue interest on delayed payment of fixed deposits, once the principal amount of deposits is paid."

4. I have carefully considered the submission made by the company. It is noted that there are in all 1,456 depositors whose deposits of the aggregate value of Rs. 77.11 lakhs have matured upto 31-3-1991 and the company has not been able to repay these deposits on the date of maturity. It is also noted that some of the deposits have matured as early as in 1986, Considering the submissions made by the company and having regard to the nature of its operations, I, hereby order that the company shall make repayment of the principal amount of the deposits as per following schedule.

The deposits, which have matured upto December, 1986 will be repaid on or before 30-6-1991, the deposits with have mature from 1-1-1987 to 31-12-1987 will be repaid on or before 31st August, 1991, and deposits which have matured from 1-1-1988 upto 31-3-1991 will be repaid on or before 31st March, 1992. The interest due thereon till the date of repayment shall be paid within four months from the date thereafter, as mentioned above.

While repaying the principal amount of the fixed deposits, the company will also ensure to send to the depositors post dated cheques towards overdue interest. Affidavits in compliance of these orders will be filed by the company before the Bench Office at Bombay on or before 15th July, 1991 in respect of deposits which have matured upto December, 1986, on or before 15th September, 1991 in respect of deposits which have matured from 1-1-87 to 31-12-87 and on or before 15th April, 1992 in respect of deposits which have matured from 1-1-1988 to 31-3-1991.

The Company will also send a circular to all the depositors before 30th June, 1991 informing them about the above programme of repayment and file a copy of the circular with the Bench Office at Bombay alongwith the affidavit in compliance to be filed on or before 15th July, 1991. The company, its directors and concerned officers shall ensure compliance of this order within the stipulated period under intimation to the Bench Officer, Bombay and the Registrar of Companies, Gujarat, Ahmedabad.

In the event of company's failure to comply with the orders of CLB, the Registrar of Companies, Gujarat shall take necessary action in terms of section 58A(10) of the Companies Act, 1956, to whom a copy of this order be also sent. Let a copy of this order be also sent to all the depositors who have filed applications under section 58A(9) of the Companies Act, 1956 before the Company Law Board.

Dated: 4th June, 1991.

(Sd./-)
(S.P. Upasani)
Chairman



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