ORDER
A.R. Ramanathan, Member
1. This Bench has received 23 applications from public depositors under Section 58A(9) of the Companies Act, 1956, with regard to non-repayment of fixed deposits by Montari Industries Limited, 78, Nehru Place, New Delhi-19. These applications were forwarded to the company for their reaction and the company was also directed to submit full particulars of the deposits outstanding. The matter was fixed for hearing on February 14, 1997. Though the company did not react nor file the necessary particulars, on the date of hearing, it submitted a written statement along with a copy of the balance-sheet for the 18 month period ended September 30, 1995, and certain particulars about the revival programme since the company has already been declared as a sick industrial undertaking by the Board for Industrial and Financial Reconstruction, The company has taken a stand that as per the provisions of the Sick Industrial Companies (Special Provisions) Act no proceedings for execution, distress or the like can be commenced or continued except with the consent of the Board for Industrial and Financial Reconstruction. In the written statement it has been stated that a revival scheme has already been submitted which includes provision for repayment of the fixed deposits.
2. On a scrutiny of the balance-sheet of the company as on September 30, 1995, it is found that the company has already committed defaults even before a reference was made to the Board for Industrial and Financial Reconstruction. It is also found that the auditors have already commented upon the failure to submit the annual return of deposits and the delay in depositing the liquid assets to be maintained under Rule 3A of the Companies (Acceptance of Deposits) Rules, 1975. The directors in their report dated March 15, 1996, for the period ended September 30, 1995, have also admitted that some of the deposits which have matured for repayment could not be repaid on the stipulated dates. This however is a matter falling within the jurisdiction of the concerned Registrar of Companies. The company secretary and one of the directors of the company who appeared before the Bench on the date of the hearing submitted that Rs. 49 lakhs being 75 per cent, of the entire outstanding deposits shall be repaid by September 30, 1997, and the balance Rs. 16 lakhs being 25 per cent, shall be repaid in 1998 subject to the approval of the Board for Industrial and Financial Reconstruction and that these payments have also been provided for in the revival package. Accordingly, the company was directed to file an affidavit signed by the managing director confirming
the above schedule of repayment. This affidavit has accordingly been filed subsequently.
3. After the hearing, it was understood from the order of the Appellate Authority for Industrial and Financial Reconstruction (AIFR) that it has set aside the order of the Board for Industrial and Financial Reconstruction declaring the company as a sick unit, on the ground that the net worth has not been completely eroded. The company however has submitted that with the finalisation of the accounts for September 30, 1996, complete erosion has taken place and a further reference has been made to declare the company as a sick company.
4. Keeping in view that the company is seriously interested in paying off the depositors’ money, the affidavit of the managing director proposing to repay Rs. 49 lakhs of the outstanding deposits during the year 1997 and Rs. 16 lakhs during the year 1998 is accepted and the company shall make the repayment accordingly. This order, however, is subject to the approval of the Board for Industrial and Financial Reconstruction if the company is declared to be a sick unit at the relevant time. A copy of this order shall be placed by the company before the appropriate authorities under the Sick Industrial Companies (Special Provisions) Act, 1985, if relevant and seek their approval. Ordered accordingly.
5. A copy of this order shall also be forwarded to the concerned Registrar of Companies.