CIMMCO BIRLA LTD Vs. ANIL SETHI

JUDGEMENT

(1.) ADMITTEDLY respondent deposited an amount of 2,000 with the appellant for issuing 20 debentures in the year 1991. Appellant issued 20 debentures vide folio No. CL 35961 Certificate No. 106948 and Distinctive Nos. 714751 to 714770 for Rs. 100 @ 12.5% since 1991. The debenture was partly redeemed during October, 1998 and December 1999. However the last redemption along with interest was not paid by the appellant. Consequently he filed the instant complaint before the District Forum. Vide impugned order dated 31st May, 203, the District Forum allowed the complaint with the direction to the appellant to pay the redemption value along with agreed rate of interest from effective date to the date of redemption and interest for the delayed period @ 9% w.e.f. fixed date of redemption till realization along with cost of Rs. 1,000 . Feeling aggrieved the appellant has preferred this appeal.

(2.) THE solitary plea taken by the appellant in its defence before the District Forum and before us is that the company is registered with the BIFR and therefore assets cannot be disposed off to make any payment and proceedings should be stayed under Section 22 of Sick Industrial Companies (Special Provisions ) Act, 1985 and further that the respondent should seek permission from the Company judge to initiate any proceedings against the appellant.

(3.) THE aforesaid plea of the appellant was repelled by the District Forum by placing reliance on the decision of High Court of Karnataka in Deepak Insulated Cable Corporation Ltd. v. Union of India and Others,2001 CoKAR 401, that the deposit in the sick company made by the depositor is not a sum lent to the company but a sum held in trust by the company till the time of maturity. Therefore any claim made for return of a deposit with the company cannot be termed as a suit for recovery of money, attracting Section 22(1) of the Sick Industrial Companies (Special Provisions ) Act, 1985.