ORDER
K.C. Ganjwal, Member
1. M/s. Morepen Laboratories Limited (hereinafter called as “the Company”) was incorporated as a Private Limited Company on 1st December, 1984. The Company became public limited on 16th March, 1992. The registered office of the company is situated at Morepen Village, Nalagarh Road, Near Baddi, Distt. Solan Himachal Pradesh.
2. The main objects for which company was incorporated are as under:-
a) to manufacture, produce, prepare, purchase, sell, import, export, distribute and otherwise deal in all types of basic & bulk Drugs, Medicines, Chemicals, Pharmaceuticals, Cosmetics, Aromatic, Chemicals, Ayurbedic and Unani crude drugs and medicines.
b) To manufacture, buy, sell and deal in mineral water, cordials, liqueurs, food products, soaps, brotles and other restoratives, especially suitable or deemed to be suitable for invalids and convalescents.
c) To carry on the business of chemists, druggists, drysalters, oil and colourmen, importers and manufacturers of and dealers in drugs, pharmaceuticals, medicinal, chemical, cosmetics, biochemical, industrial and other preparations and articles compounds, cements, oil, paints, pigments and varnishes, drug dyeware, paints and colour grinders, makers of and dealers’ in proprietary items of all kinds of electricals, chemicals, photographical, surgical and scientific apparatus and materials.
3. M/s. Morepen Laboratories Limited which has collected public deposits under Section 58A of the Companies Act, 1956 has defaulted in repayment of the deposits on maturity and as such the Company Law Board started receiving applications from aggrieved depositors in terms of Section 58A(9) of the Companies Act, 1956. While considering these applications, it transpired that the Company had started defaulting repayment of matured deposits right from October, 2002.
4. The Company has invited deposits since 1993 from public to meet its long-term working capital requirement. The company has repaid the matured deposits till October, 2002. It is further mentioned that out of total deposits of Rs. 16183.76 lakhs as on 31st March, 2003 accepted by the company, a sum of Rs. 1432.56 lakhs are already matured and a sum of Rs. 14751.20 lakhs are yet to be matured. The details are as under:-
The position of deposits as on 31/3/2003 are as follows:-
(Rs. in
Lacs)
Category
Total No. of
Cases
Total Amount (in Rs.)
0-5000
1315
62.93
5001-10000
26962
2673.29
10001-15000
21117
3694.51
15001-20000
17130
3271.14
20001-25000
7611
1858.07
25001-50000
10177
3740.87
50001-100000
961
833.86
Above 100000
311
679.06
Total
85921
16183.76
The position of matured deposits as on 31/3/2003 are as follows:-
(Rs. in Lacs)
Category
Total No. of Cases
Total Amount (in Rs.)
0-5000
453
18.32
5001-10000
3067
302.87
10001-15000
2235
323,37
15001-20000
1362
258.37
20001-23000
558
146.76
25001-50000
745
276.79
50001-100000
77
65.10
Above 100000
17
40.98
Total
8514
1432.56
The position of deposits yet to be matured are as follows:-
(Rs. in Lacs)
Category
Total No. of Cases
Total Amount (in Rs.)
0-5000
892
44.61
5001-10000
23895
2370.12
10,00,15,000
19182
2771.17
15001-20000
15768
3012.77
20001-25000
7056
1711.31
25001-50000
9432
3434.08
50001-100000
885
768.76
Above 100000
297
638.08
Total
77407
14751.2
5. Thus, the outstanding position of the fixed deposits as on 31/3/2003 is Rs. 16183.76 lakhs and the number of depositors are 85,921. The company on its own stopped accepting deposits from public w.e.f. April, 2003.
6. Since the Company Law Board has received large number of applications under Section 58A(9) of the Companies Act, 1956, it was decided to invoke suo-moto powers under Section 58A(9) of the Companies Act, 1956 for all the deposits matured or to be matured in near future. The company has furnished the reasons for default and also its plan of action to clear all the matured deposits and also its proposal to pay off deposits which would mature for repayment in future.
7. Several hearings were held from time to time. In the hearing held on 12/6/2003, the following options furnished by the company were discussed. These options are as under:-
OPTION-I
a) Depositors up to Rs. 5,000/- shall be paid in full at the time of maturity;
b) The entire principal amount shall be paid in five years in varying percentage every year form the date of maturity;
c) Interest up to the date of maturity to be determined at to the contracted rate i.e.
Six months 8%
One year 10%
Two years 10%
Three years 10.5%
And thereafter @ 6% p.a. till the actual date of payment shall be paid during the six year;
d) Hardship amount has been provided at Rs. 5,00,000/- per quarter.
OPTION-II
a) Depositors up to Rs. 5,000/- shall be paid in full at the time of maturity;
b) The entire principal amount shall be paid in six years in varying percentages every year from the date of maturity;
c) Interest up to the date of maturity to be determined at to the contracted rate i.e.
Six months 8%
One year 10%
Two years 10%
Three years 10.5%
And thereafter @ 6% p.a. till the actual date of payment shall be paid during the sixth year;
d) Hardship amount has been provided at Rs. 5,00,000/- per quarter.
In the hearing held on 16/6/2003, the company representative submitted a revised Option No. 3 which is an under:-
OPTION-III
Category
No. ofCases
Amount(in Rs,/Lacs)
Repayment Schedule (in
%)- From 1st April to 31st
First Year
Second Year
Third Year
Fourth Ycar
0-5000
1345
62.93
100
5001-20000
05509
9038.97
20
20
20
40
20001-50000
17791
5563.94.
15
20
25
10
5000& Above
1276
1512.92
10
15
35
40
Grand Total
85921
161,83,16
Note:- a) Depositors up to Rs. 5,000/- shall be paid in full at the time of maturity;
b) The entire principal amount of the Depositors above Rs. 5,000/- shall be paid in four years in varying percentages every year from the date of maturity;
c) Interest up to the date of maturity to be determined at to the contracted rate i.e.
Six months 8%
One year 10%
Two years 10%
Three years 10.5%
And thereafter @ 6.5% p.a. till the actual date of payment shall be paid during the fourth year;
d) Hardship amount has been provided at Rs. 5,00,000/- per month.
8. The above option III was discussed in detail and the company was directed to publish the repayment Schedule Scheme indicating their parameters mentioned above and publish the gist in the to leading news papers in Delhi, one in English and other in Hindi. The scheme should also be published in two leading news papers at Solan (H.P.) where the Registered Office of the company is situated in English and Hindi. The details of the scheme are as under:
Category
Repayment
Schedule (in %) (From 1st April to 31″
March)
Rupees
First
Year
Second
Yenr
Third
Year
Fourth
Year
0-3000
100
–
–
–
5001-20000.
20
20
20
20
20001-50000
15
20
25
10
50001& above
10
15
35
10
a) Depositors up to Rs. 5,000/- shall be paid in full at the time of maturity;
b) Entire principal amount of the Depositors above Rs. 5,000/- shall be paid in four annual instalments after the maturity;
c) Interest up to date of maturity at the contracted rate and thereafter @ rate of 6.5% p.a. till the actual payment shall be paid alongwith the last instalment;
d) Hardship amount has been provided at Rs. 5,00,000/- per month.
The objections and suggestions received from the depositors should be submitted to this Board alongwith the affidavit.
9. In compliance to the above directions the company has published the gist of scheme in the following news papers on 23/6/2003.
S. No.
Name of the News Paper
Edition
Place
1.
The Statesman
English
Delhi
2.
The Himachal Times
English
Solan
3.
Veer Arjun
Hindi
Delhi
4.
Himachal Times
Hindi
Solan
10. The company in its affidavit dated 22/7/2003 has stated that it had received 62 replies in response to the advertisement. Out of 62, 59 depositors have given their consent and only 3 depositors have objected to the scheme which amounts to .003% to the total deposits. The Company Law Board had also received 17 objections and 27 consents to the proposed scheme.
11. It is stated by the company that the total liability of the company towards deposits is to the tune of rs. 16183.76 lakhs. The aggregate amount of Assets of the company as on 31/3/2003 is reported to be around Rs. 1301 crores. According to the company, while it is financially sound and stable, it is the liquidity problem which has resulted in default in the repayment of deposits. Therefore, according to the company, it is not only capable of repaying all the deposits, it is also interested in discharging its liability towards fixed deposits. However, in view of the foregoing reasons, such repayment would be possible over a period of time and not on immediate basis and as and when the deposits matured for repayment. Accordingly, prayed that a scheme should be sanctioned to enable the company to pay the deposits in a phased manner, over a period of time.
12. On 8/8/2003, a hearing was hold to discuss the scheme and to consider the objections/suggestions received. The advocate on behalf of the objector and some objectors have mentioned that their money should be safe and paid back in time and all precautions should be taken while sanctioning the scheme of payment. One of the depositor mentioned that the post dated cheques should be issued to them against their deposits. After hearing the Advocate of the company, the following directions were given to the counsel for the petitioner.
a) Post-dated cheque would be issued for first instalment to all the depositors.
b) The amount of hardship cases like old age, senior citizen above the age of 65, Medical cases, widows, children’s marriages etc. would be raised from Rs. 5 lakhs to Rs. 9 lakhs per month. Total rupees one crore in a year.
c) The rate of interest payable after date of maturity would be raised from 6.5% to 7% per annum.
13. I have considered the submissions made by the advocate appearing on behalf of the depositors and advocate appearing for the company. Having regard to the interest of the company, the interest of the depositors and also public interest at large, I order as follows:-
(i) The interest payable will be the contracted rate upto the date of maturity and at 7% per annum after the date of maturity;
(ii) All deposits up to Rs. 5,000/- payment will be made within one year from the date of maturity;
(iii) All deposits of Rs. 5001/- to Rs. 20,000/- shall be paid within 4 years from the date of maturity a 20% in the first year, 20% in the second year, 20% in the third year and balance 40% in the fourth year. The interest for both pre and post maturity period will be paid along with the last instalment.
(iv) All deposits of Rs. 20,001/- to Rs. 50,000/- shall be paid within four years from the date of maturity at 15% in the first year, 20% in the second year, 25% in the third year and balance 40% in the fourth year. The interest for both pre and post maturity period will be paid along with the last instalment.
(v) All deposits of Rs. 50,000/- and above shall be paid within four years from the date of maturity at 10% in the first year, 15% in the second year, 35% in the third year and balance 40% in the fourth year. The interest for both pre and post maturity period will be paid along with the last instalment.
(vi) The company shall issue post dated cheques for first instalment to all the depositors who have submitted/surrendered the original fixed deposit receipt, on demand by the company.
(vii) the above scheme will be applicable to all depositors whether over due or yet to mature and whether any application has been filed before the Company Law Board or not.
(viii) The scheme shall be effective from the date of this order.
14. The company will adhere to the following guidelines in implementing the scheme:-
i) While repaying the deposits as per the scheme above, all individual deposits will be treated as such and shall not be clubbed if any depositor holds more than one deposit for the purpose of arriving at the amount as fixed in the scheme.
ii) The payment shall be made in the order of date maturity i.e. deposits which have matured earlier shall be paid before deposits maturing at a later date.
iii) The repayment should be spread over all the months in each year.
iv) Notwithstanding the aforesaid scheme, the company will be at liberty to make repayment of deposits along with the interest thereon before the stipulated time, if funds are available.
v) The company shall make repayment of deposit and interest according to the above scheme by cheque/demand drafts/Pay order which shall be sent by registered post/couriers/speed post to the respective depositors.
vi) The company will file an affidavit, once in three months on the state of repayment deposits, the first on 1st November, 2003 with Company Law Board, Northern Bench, New Delhi with copy to the Registrar of Companies, Punjab, H.P. & Chandigarh at Jalandhar and also Department of Company Affairs (I.P. Cell)
vii) During the hearing the company had undertaken to keep a sum of Rs. 9.00 lakhs per month total Rs. one crore per year for payment towards hardship cases like old age, senior citizen, medical, marriage etc. in addition to the amount needed for repayment as per the schedule of repayment. To consider the hardship cases, I hereby appointed a committee consisting of Shri Sushil Suri, Chairman & Managing Director of the company or his nominee, Sh. Virender Ganda, Advocate, Shri K.L. Mangtani, Bench Officer, Company Law Board which will consider applications received from depositors expressing hardships. This Committee will meet every calendar month to consider such cases and the amount so decided by the Committee shall be disbursed within 21 days thereafter.
15. To ensure that this payment schedule is kept up, Shri Sushil Suri, Director of the company who have filed various affidavits before this Bench shall file an affidavit of undertaking that the above scheme shall be implemented without fail, with a copy to the Registrar of Companies, Punjab, H.P. and Chandigarh at Jalandhar within fifteen days from the receipt of this order.
16. Any failure to comply with this order shall attract penal provisions contained in Section 58A(10) of the Companies Act, 1956 and Section 274(1)(g) of the Companies Act, 1956.
17. The company shall within three weeks, of release of this order send a copy of the operative portion of this order to all the depositors and at its discretion may also publish the same in leading newspapers.
18. A copy of this order shall be sent by the Bench Officer to the to the Secretary, Department of Company Affairs, New Delhi and I.P. Cell, Department of Company Affairs, New Delhi for information and necessary action.
19. A copy of this order shall be sent to the Registrar of Companies, Punjab, H.P. and Chandigarh at Jalandhar for taking necessary action in case of non-compliance of this order.
Signed on this 19th day of August, 2003 at New Delhi.