EDPUGANTI BAPANAIAH Vs. K S RAJU

JUDGEMENT

(1.) This Contempt petition is filed by the petitioner under Section 10 to 12 of the Contempt of Courts Act, 1971, alleging that the respondents committed civil and criminal contempt by interfering in the course of administration of justice, by violating and disobeying the orders of the Company Law Board, Southern Region Bench at Chennai in C.P.35 of 2000, dated 29.02.2000 and order in C.A.344/634-A/SRB/2001, dated 21.08.2001 and also for breach of affidavits filed before the Company Law Board and this Court in Company Appeal No.7 of 2001, and to pass such other order or orders as this Court deem it fit and proper.

(2.) It is stated that 3rd respondent is a company, while the 1st respondent is the promoter director of the 3rd respondent company and the 2nd respondent is the President of the 3rd respondent company. It is stated that the 1st respondent and other directors, on behalf of the 3rd respondent company, issued a public advertisement, inviting deposits, proposing to return the deposits with attractive interests., and accordingly, received deposits from the public. In that process, the petitioner deposited Rs.40 lakh as it was informed that the same would multiply to double the amount within 45 months, and as such, the said amount was deposited in 8 fixed deposits of Rs.5 lakh each for a period of 45 months. The said deposit was made on 28.07.1997 and is due for repayment on maturity on 28.04.2001. But, however, even before the said date of maturity, the 3rd respondent failed to pay to various other similar depositors, and therefore, filed an application under Sub-Section 9 of Sec.58-A of the Companies Act, 1956 before the Company Law Board, Southern Region Bench at Chennai for framing a scheme for repayment of the deposits in instalments within a period of 48 months and the said petition was numbered as C.P.35 of 2000. The Company Law Board passed an order on 29.02.2000, exercising its suo motu powers, granting time as claimed by the Company and its directors by approving the scheme.

(3.) During course of pendency of the petition before the Company Law Board, as per the directions, the directors, especially the promoter director, the 1st respondent herein, along with group companies, filed affidavits, giving undertaking to the Company Law Board that they will abide by the scheme and pay off the depositors as per the scheme, by implementing the order passed by the Company Law Board. On that assurance an order was passed on 29.02.2000.