ELECTREX INDIA LTD Vs. KRISHNA BAHECHARBHAI PATEL

JUDGEMENT

(1.) M/s Electrex (India) Limited is before us aggrieved by the common order dated 28. 11. 2002 passed in C. P. NO. EIL. 11/58-AA/clb/srb/2002 on the file of the Company Law Board, southern Region, Bench Chennai.

(2.) APPELLANT is a company and the respondents are depositors of the appellant company having made 1-3 year deposits with the appellant company during the year 2000 aggregating Rs. 8. 88 lakhs. The said deposits were received by the appellant company as borrowings utilised towards the working capital requirement of the appellant. Appellant company suffered recession and for variety of reasons it became sick. Reference was made to the Board of Industrial and Financial reconstruction (BIFR, for short) under Section 15 of the Sick Industrial Undertakings (Special provisions) Act, 1985 (SIC Act, for short), which was registered as case No. 49 of 2000. Thereafter, in terms of the order dated 18. 07. 2000, BIFR ordered enquiry and issued a direction under Section 16 (2) of the SIC Act. IFCI was appointed as operating agency to prepare a comprehensive report on the objections of various creditors of the appellant company. About 202 depositors made applications under Section 58-A (9) of the Companies Act before the BIFR for a direction to the appellant to repay the deposits. According to appeal averments, it was the case of the appellant that Section 22 of the Act is attracted and that the proceedings under Section 58-A (9) is to be stayed in the matter. The Company Law Board, in terms of the impugned order dated 31. 7. 2000, directed the appellant to repay the deposits of 202 depositors. Appellant is before us aggrieved by the order of the Board.

(3.) HEARD the learned Counsel appearing for the appellant company. He would essentially argue that Section 22 of the Act comes to the rescue of the appellant. He would say that the Company law Board has committed a serious error in issuing directions in the case on hand. Judgments with reference to Section 22 are placed before us.