CLB orders company to repay deposits, sets payment schedule; Hardship Committee established to monitor progress

The Company Law Board (CLB) granted the applicant company an extension of time to repay deposit-holders after maturity, setting a payment schedule up to 31.3.2015. The company was instructed to clear matured deposits promptly and pay premature deposits with accrued interest. A Hardship Committee was established to monitor repayment progress. Despite profitability, the company faced complaints from depositors and government authorities for failing to repay matured fixed deposits, leading to the CLB's intervention to ensure compliance with the Companies Act, 2013.

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Issues:
1. Application for extension of time for payment to deposit-holders after maturity under Section 74(2) of the Companies Act, 2013.
2. Seeking exemption from maintaining liquid assets as required under Section 73(2)(c) and Rule 13 of the Companies (Acceptance of Deposit) Rules, 2014.
3. Failure to repay matured fixed deposits (FDs) despite profitability and multiple complaints from depositors.
4. Appointment of a Hardship Committee to monitor and ensure repayment of deposits.

Analysis:

1. The applicant company filed an application seeking an extension of time for payment to deposit-holders after maturity, citing financial figures and intentions to repay the outstanding dues promptly. The company acknowledged its liabilities and assets, highlighting its efforts to run profitably and effectively. It mentioned its repayment history and the deployment of funds in various projects as per the applicable laws.

2. The Company Law Board (CLB) passed an order detailing the payment schedule for dues up to 31.3.2015, specifying different timelines for varying deposit amounts. Additionally, the company requested exemption from maintaining liquid assets, as mandated by the Companies Act, 2013 and the Acceptance of Deposit Rules, 2014.

3. Several depositors appeared before the Bench, expressing grievances regarding non-payment of matured FDs despite the company's reported profits and assets. The CLB noted the numerous complaints received from depositors and government authorities, emphasizing the company's failure to clear matured deposits and lack of serious efforts in repayment.

4. In response to the situation, the CLB clarified the mandate of the Companies Act, 2013 regarding repayment of all collected deposits, whether matured or prematured, by a specified deadline. The company was granted a limited time frame to clear matured deposits and instructed to pay premature deposits with accrued interest promptly. A Hardship Committee was established to monitor the repayment progress and report back to the Bench regularly.

This detailed analysis covers the key issues addressed in the legal judgment, including the company's financial obligations, depositors' complaints, regulatory compliance, and the establishment of a monitoring mechanism to ensure timely repayment of deposits.

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