This the court case order in Case of Fixed Deposit Investor Refund of the Investment. Jaiprakash Associate and others are old players in company FD Market. The Few Percentile of higher interest attracted many investor

1. AEFORE THE COIIPAIIY !AV' AOARD, NEW DEIXT AE CH
t'tEw oEfHr
ca 2sl lol2ot4
Prc..n[ B.S.V, Pr.k..h {sm.n r4.mb€r (ludi.a.t)
companies Act, 2013 section 74(1) (b) & 74(2)
Jaipr.kash As6o.i:t.. Llmlt d
The counsel ror the Apptcin| Shri S.K. Sharma, Advo6te, Shri Harish K. Vaid,
sr. President & co,secy.
Ord€.
(He.rd & Prcrou..d on t6-O2-2O15)
The Applicant Company filed this appticatDn u/s 74(2) of th€ ConEnaes
4ct,2013(herein after €aeiied as rrcO, gnmanty sekinq exemprion rroh the
mainraining tiqoid assets !.der Rute 3A of rhe compa.ies
(acceptance of oeposits) Rute. 1975/Rute 13 ot the companies (Accegtan@ of
Deposits) Roles, 2014; p€rmission to utitise the funds tept aside for reFyment
of outstandinq Deposit5; permission to rcpay the e!5tino deposits in accordance
with the oriqinal terms and tenure as accepted by such Deposit ftotd€B, insread
ofreFying.n outsranding deposirs by 31,3.2015, and time of two months since
31-5.2015 to.lear allthe deposits fefi due for €p.yment on or befo€ 31.3.2015
as per th€ir origi€l terms ofacceoiance.
2. The appricant submits that it rs a muu-activity cohpany havnq divetse
bus ness sith a tur.over of | 13,327.02 C.ores ar per audtted Batance Sheet as
on 31.3 2014. It has beer acceplfo deposits lrom the pubtic for the ast rwo
decades ahd has aso been punctlat i. repaying the Oeposits atonq with inte€st
acctuinq without any defautr. As on 31.3 2014, the @mpany had outsta.ding
Fixed Deposiro6 numberng 1, 78,704 for an aggregate amount of t 2,722.5j
crc€s, Th€ sme has b€en invested in the busin€* of the companv bur whe€as
by the advent of act 2013, on rhe mandare !/s 74, the company has stoDoed
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2. ac.ept ng deposirs tiom 31,3-2014, becau* the s<tion savs thar all the
d€posrts accepted by the companies need to be rcpad withi. one ye.r riom
1.4.2014 or arofr the daie on which such payment is due, which€v€r is eartier.
SLnce the Company stopped accepr n9 deposits irom 1,4-20r4, the circutation of
money rn the company nas come to a hatt driv n9 rhe company struqqte to ctear
even the matured deposirs, nspire ot it; the comp:ny has tned to pay up rhe
as the demands cohing f.om the depositors lor prcmarure
paym€nts. sin.e non-taki.g of further deposits affeded the circutario. ot
money, it has come into t.olble in tiney clearing th€ deposrts since Aprit,20t4
The company flrthe. says, despite it has not been takin! further deposits, it has
already paid { 6a6,14 Crores, th€ batance that s rema ned to be paid from Apr i
2014 to f4arch 2015 s only a 455.52 Crores. rr has c eared the demand of
prematur€ payments from apnl, 2015 to March, 2017 by paving | 5a.35 cb€s,
The company further savs it h:s ro ctear the demand of a 59.57 Cores towards
3. The company further slbmits, it s difticult for the .ompa.y to take olt
such a large amou.t from running blsiness for repayment of at marured and
prematu.e deposits by 31.3.2015, this ditnculty was brcught to the notire of
Mini.rry of corporate AtraiE vide retter dated 22.4.2ot4. Respondi.g io the
same, the Ministry of corporate Atrairs notified confering powe6 on company
Law Board to take uD app cations u/s 74(2) of the companies Ac!, 2013, in
puEuance thereof, the compa.y fLed the present apptication to bait olt the
company from this diffic!rt sit!ation.
4. The company fu.th€r submits rhat despte the company, 5ince 1.4.2014,
has not been accepti.g fresh deposits, but whereas it ha5 paid? )45t crorcs
sice 1.4.2014. The total outstanding payabie as per section 7a(1) ot the
Companes Act, 2013, s { 1974.04 Crores, as shown n the Annexure paced
5. When the company filed this apprietion, the companv Law board direcred
puorication of notce ot fiii.9 this appl@tion on 26,11.2014, In pureuance
thereof/ th€ company plb shed a force Invitinq objecto.s, f any, to rhe
appLr@tion noved by lhe applicant comlanv on 17.12.2014,
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3. 6, lhe company submtts that it wit.ot be pracuc.ly reasibte ro €@v the
entire depos ts by 31,3,2015 beause the deptoyment offunds was made at the
rerev.nt rime i. the businss keeping in view the tenure o, ceposits, since rhe
company rs going co.cern, it cannot be posstbte to take out f!ndsfroh itj ifslch
.n a(empt rs made to take our money n betwee., ir may .o! eveh Rove. the
investments pur i.to the blsiness. Th€ conpa.y ruriner suDmts, rt has a t.ack
r<ord ot b€r.g reguta. in setuici.g and repayhent o, deposits, exceor for rh€
cur.e penod owing to the.ew act contng into existence. Th€ company further
rubmits, to male the repayme.t as eany as pcsibt€, it has d/vested some oftr.
assets (cehe.t grindi.g lnt at pa.ipat, ceme.r manutacturing pta.t ar a€ra
and sddhi (MP), blt rhe company has not yei recervs sare prcceeds, Apart
frcm this, rhe codpany has ried up with its Banker to rarse ,rcsh |oan to rcEv
p.no'lts outsta.ding depostt3. The company has atso tept aside f 160/, Crorcs
In the fom of Fited oeposits with B..ks towards lqu|d arsers, a3 Er a
requieh€nt of Rute 3a ot the conpanies (Acceptance of oeposits) Rutes, 1975
to be utilised for epayment of rhe outstandi.o OeDoshs.
7. The counset appearing on b€hatf of the Apprcant s.ys, tholgh Bant
sanctioned toan in th€ monrh ot lun€, 2ora (An.exure xrJ, it has not yet been
er€sed be.au.e fite has to .iEutate rhrough various ba.k, rn the conro.tium.
He says rhe company w( ctear dorr ot it, once the s.n.tioned timit is €teased
trcm th€ 6ank. In view of the tacts above ftentio.ed, the Applic..t pr.ys this
B.nch to pa$ rhe retief as solqhr above.
a. o. seeing the apptication a.d slbmissjons of tne .Dpri6nt counset, it
app6B rhat the company is due to make the batance payhent of.bout f 3oo/-
crores towards Fos mat!rcd from aprit, 2or4 til date. A, to prcmaturc deoosts.
r nas to oake paymenr of about a 1600/- crores. As per sec 74(1) o, the acr_
20,1, rhe conDa^r has to ctear a the depoei, made to rr," .o.p"n, u" :-q-
2015, iotwrthstanding the t ct whether they are narure o. p
the company coutd not aake the paymedr a5 h..oaed !/s 74(t). hav be
oe6u5e the circutation of mo.ey i, stlck up for havrns rne company stoDDed
accepnng any deposit.fter 1.4.2014. It appears thar rhe Govemftent, on the
apprication th€ conpsny made, ! notitication has come conferring power upon
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4. Conpany t w Board to take up the .DDli@tion under S*tion 74(2) of the Act,
2013 for allowlng turther tm€ after considerino the financlal condltion of the
company and the amount of deposits pendlnglor payment.
9. The company has sought pemission of two months to clear all the
deposits to which a0pli6tions alrc6dy made by the parties within two months
from 31-3-2015. As to FOs pending to b€ matur€d fom Aprir, 2015, the
company h5s sought a relief to pe.hit the company to repay the existi.g
deposits In accordance with the orgin. terms as 5nd whe. the depost is
10. On eeing the pcyer for p€rhission to repay the existing depGits in
ac@rian@ with the original tems, it app€E it is not possable to grant
permission to the company to repay the existing depo.its .s and when deposits
are matur€d after 31-3-2015, Il soch a rellef ls oranted, it will be@me nothing
but negating the intention of the regrslatron in se. 74(1) of the Act, 2013. It
mlCht not be th€ intention of the legislation in providi.g discreno. b the
company Law 8oa.d to grant time to the company to repay the deposirs as
wben they are matured, perhaps it has been legislated to extend time enabling
the company to pay itsnerthan lat€r.
11. Desplte the company has stopped receiving any deposits since 31.3.2014,
it appeats the company has been mak ng bonafide eftorts ln maki.g repayments
to the deposlto.s. The company has ranction letter on hadd f.on the Bank for
€lease of l@n rq a^ amount of about I 1000/- C@res lowa.ds repayment or
2015 to the cohp.ny to comply with section 74(1) ol the Companles Ad, 2013
in relat on to Fos maturing after 31-3-2015. Notwithstanding the fact ol date of
naturity of FOs. this extension ot six honths is applicable to all prematlE
depGits p€nding with the cohpany, which have not been asked tor rcpayment.
In 6se anv request @m6 within the5e nr months of time for payme.t of any
premarue deposit pending, th€ company shall release the s6he sithin 30 days
fom theday any lefte. of reque5t reached to the company, In case the company
For the reasons stated above, this Bench grants six months since 31-3-

5. tails to make reDayme.t the order now pas*d srll be
,.
)tr'r""
(B.S.V. PRAKASH |(UitAR)
M€mb€r (Judl.l.l)
(s'gn€d on r8' Febru.ry, 20rsJ
13, As to elief tor ext.nsaon of rwo monthstime for rcpayment of outstanding
deposits by 31,3.2015, the company is given 30 days si.ce 31,3,2015 to cte.r
alldeposits due tor Davment bv 31.3.2015.
14. To monitor arr this pcess, this Bench hereby @nstitltes a Hardshio
Committe @mprisi.g of se.etary, Company bw a@.d, Be6ch Omcer sh.i
Vikram Singh and one oflicer from the company autho.ised by the Board of the
company. The company willfile Progess Report before the Hardship comhittee
on 1" and 15th of every nonth, if such d.te is not a workr.q day, the cohpany
shallfil€ the p@gess report on the lollowi.g working dzr.
15. In case the company tdils to adh€rc to the term. give. by this Bench, the
fiirdship Commrttee is dneded to lile . reDori befor€ this Bench within one
16. As lo rcliel (b) for *emption lrcm mai.tainjnq liquid assets u.der Rule 3A
of the compa.ies (a<eptanc€ ot Deposlts) Rure, 1975, this Bench holds rh.r rhe
@npany shall not ltilis€ the flnds e.rmarked towar& liquid asets under Rule
34 for re9ayment of deoosits.
,acordi.qly, ca 2512014 is hereby disposed ot,
IqrFrd Tq lQ$ifit
CERNFED IRUE COPY
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V'KRAM S'NGI,I