Report No. 143
March 22, 1991
M/s Ambalal Sarabhai Enterprises Ltd.,
Sarabhai Enterprises Ltd., Wadi,
Our reference No. 6(2)(11)/87/L.C.(LS)(IF)(13) dated 14-2-1991.
Your reference No. ASE: FD: 125, dated 26th February, 1991.
This is in further continuation of the above referred correspondence which has passed between us on the subject pertaining to failure on your part to refund matured deposits of small depositors.
We have sent a telegram to you on March, 19, 1991, making further information from you which we hope must be on its way.
Even the adequate information furnished by you reveals that "Rs. 71.96% lakhs have remained unrefunded period of exceeding sixty days as on 31-1-91 to 1,312 depositors". This information causes considerable anxiety at distress. The amount in question when spread over 1,312 accounts works out at Rs. 5,485 per account.
It means, almost all the depositors who are suffering on account of failure on your part to refund the deposits are small depositors who cannot individually initiate appropriate legal proceedings in order to seek redress. They cannot does individually because each of them would have to incur an expenditure which would possible exceed the amount due to them in the context of their individual deposits. It is wondered whether only small depositors, who are virtually helpless in the circumstances, have been put to a suffering.
Be it realised that these small depositors have reposed their trust in your company because of faith in your company. It is not quite becoming to your company that a situation is created where such small depositors having trust in you would be made to suffer by your indifference to their fate merely because they are found to be helpless to act their on own.
Whatever be your financial constraints, their would appear no justification for meeting out such treatment to the aforesaid small depositors. It is evident that the total amount is a negligible one from your perspective as you have rightly referred to the total amount due "only Rs. 71.96 lakhs" (emphasis on only).
It is a matter of great concern that such a situation should have arisen. The commission is, bound by its obligation to protect unwary citizens and considers it a matter of public interest to do the needful on this score even if your organization appears in a poor light as a result thereof, as warned by us in our earlier letter. And to take such other measures as public interest may demand. You would be well advised to make payment of the principal amount due to all of the 1,312 depositors along with the interest accrued thereon within the time frame indicated hereinafter so that the grievances of the depositors are redressed:
25% of the depositors concerned, that is to say, 328 depositors should be refunded the amount within 15 day of the receipt of this communication. Payment to further 328 depositors would be required to be made within further 15 days thereafter. And the remaining 656 depositors would be required to be refunded the amount within one month thereafter. In making refunds, the priority would be arranged in accordance with the date of maturity, that is to say, one who has been suffering the longest should be the one to be refunded his dues earliest.
Please confirm that you will honour your obligate on the small depositors in the manner indicated herein above so that the Commission may stay its hands. You would be well-advised to respond to the opportunity to make amends being afforded hereby.
You are desired to respond to this letter within ten days of the receipt thereof.
Consultant-Joint Secretary and
Law Officer, Government of India