BASANT LAL AGARWAL Vs. LLOYDS FINANCE LTD

JUDGEMENT

(1.) THIS petition for winding up of the company was filed by the original petitioner for recovery of amount of Rs. 3,75,00,000/- which was advanced to the respondent company as and by way of fixed deposit for a period of three years. The said deposit was carrying interest at the rate of 18% per annum. By an order dated 21-11-2003 this Court directed the company to deposit the amount of Rs. 3,75,00,000/- together with interest at the rate of 18% in Court failing which the said company petition to be admitted and if deposit is made as directed then the petitioner was directed to file a suit. Admittedly no such deposit was made. Thus the petition stood admitted by the said order. In the present company petition the application was moved being No. 233 of 2004 on behalf of various creditors and small fixed deposit holders inter alia seeking relief that in place of winding of the company it is in the interest of small fixed deposit holders that a scheme should be framed for return of the money to the small fixed deposit holders. It was contended that the small fixed deposit holders have put in their hard earned money with a view to secure their future in these kind of financial companies because at the relevant time they were offering an attractive rate of interest. It was further contended that if the company is wound-up then no persons are likely to receive any amount. However it is in the interest of justice that small fixed deposit holders be protected by this Court by framing a scheme and that payment to small fixed deposit holders should be made under the scheme. This application was heard by the learned Single Judge (Khanwilkar, J.) on 12-3-2004 and by consent of the various parties an order came to be passed appointing a Committee constituting of retired Judge of this Court V. R. Datar, j. , as its chairman and retired Officer S. C. Malhotra a retired D. G. P. of Gujrat and one Mr. P. K. Bansal as members of the said Committee. The said Committee was appointed to manage the affairs of the company and to formulate a scheme for the repayment of the amount of the small fixed deposit holders. It was further provided in the said minutes that the Committee will be at freedom to negotiate with a view to arrive at out of Court settlement with the secured creditors keeping in mind the object of the small fixed deposit holders and that their interest should be protected. The company also joined in the said minutes of order passed by this Court.

(2.) THEREAFTER on 12-3-2004 a further order was passed modifying the order dated 12-3-2004. By the said order dated 12-3-2004 it is provided that the management of day to day affairs of the company shall vest in the formal directors of the company while a special Committee of directors and that the company secretary will be under the superintendence of the special Committee. It was provided by the order dated 12-4-2004 that the said Committee is authorised to take all actions on behalf and in the name of the company to recover all outstanding dues from the companies/debtors/borrowers. It was also provided that the Economic Offence Wing should extend all support to the said Committee for recovery and realising the dues payable to the said committee. By Clause 4 and 5 of the said order dated 12-3-2004 all civil and criminal cases filed by the creditors against the company and directors were stayed. By a further order dated 16-7-2004 it is provided that the stay granted of civil and criminal proceedings against the company and the directors shall also be available as against the members of the said Committee. It was also provided that the said order will also include the proceedings which may be filed thereafter.

(3.) THUS the special Committee has been constituted by this Court and is functioning under the orders passed from time to time as narrated herein above. The special Committee has made various report. Three of such reports which are before me for consideration. Pursuant to the said orders the Committee has submitted a report dated 3-8-2004 inter alia putting forward a scheme for repayment of few of the fixed deposit holders who have advanced the amount of less than Rs. 5,000/ -. The Committee has therefore proposed 1) that out of the total recoveries a sum of Rs. 20 lacs can be made available per month for repayment of the small fixed deposit holders and the said Committee is of the opinion that all depositors upto Rs. 5,000/- can be paid off gradually and certain guide-lines have been given by the Committee in para 5 of the said report. It is also proposed that after the category of depositors up to Rs. 5,000/- is paid, the special Committee will prepare another scheme for payment to the depositors up to Rs. 10,000/ -. This report dated 3-8-2004 seeks an approval from this Court to implement the said scheme with a view to pay off the said small fixed deposit holders. By another report dated 24-7-2004 the Committee is seeking direction for initiating the contempt proceedings against one Mr. Baleshwar Prasad Gupta Advocate, for initiating the proceedings before the Judicial Magistrate first class, Patna inspite of the said order of this Court dated 12-4-2004 and 16-7-2004 staying proceedings against the company and the Committee. By the third report the Committee is seeking direction that insofar as one of the properties of the company is concerned namely the office premises admeasuring 5000 sq. ft. situated at laxmi Finance and Leasing Companies Commercial Premises Co-operative society Ltd. , be disposed of and the sale proceeds thereof be realised which would result in reducing the liability of the company and release of already blocked amount in the said premises. The company had only deposited Rs. 27. 50 lacs and there is an outstanding consideration amount still payable of rs. 1,12,35,000/ -. In view thereof the Committee is of the opinion that the said premises can be disposed of and the money deposited can be realised. Thus the committee is seeking the permission of this Hon'ble High Court in respect of the disposal of the said premises by the third report dated 3-8-2004.