2019 (3) TMI 673 - Tri - Companies Law

Investment petition dismissed under Companies Act. Lack of evidence for public deposit claim.

Dr. Lohith Shivateja Versus Anytime Medicare Services P. Ltd.

The Tribunal dismissed the petition filed under section 73(4) of the Companies Act, 2013, seeking repayment of an investment amount. It found that the ... Failure to repay the amounts borrowed from the depositor - section 73 of the Companies Act, 2013 - Held that:- The petitioner has not given all the material facts with regard to the invoking of section 73 of the Companies Act, 2013, no company shall invite, accept or renew deposits under this Act, from the public except in a manner provided under this Chapter - Admittedly, the petitioner has not filed any document to show any invitation was issued by the company from the public including the petitioner. The petitioner has not produced any material to show that in response to notification they have deposited the money primary company petition (sic). It is very clear that the applicant has not deposited the amount pursuant to any invitation made by the company. However, for inviting any public deposit. Therefore, the claim of the petitioner is not maintainable under section 73(4) of the Companies Act, 2013 and is misconceived - petition dismissed. Issues involved:1. Interpretation of section 73(4) of the Companies Act, 2013 and rule 73 of the National Company Law Tribunal Rules, 2016.2. Determination of whether the amount invested constitutes a deposit under the Companies Act, 2013.3. Evaluation of the company's obligation to repay the petitioner.4. Examination of the company's defense regarding the nature of the investment.5. Analysis of the legal requirements for inviting and accepting deposits under the Companies Act, 2013.Analysis:1. The petitioner filed C. P. No. 76/BB/2017 under section 73(4) of the Companies Act, 2013 seeking repayment of the invested amount along with accrued interest. The petitioner, a former employee, invested Rs. 15,00,000 in the company based on promises made by the directors regarding profit-sharing and share allotment. Allegations of non-repayment led to the complaint being lodged with the Registrar of Companies, invoking the provisions of the Companies Act, 2013.2. The respondent contended that the amount invested was for business partnership towards a long-term project, not a deposit. The petitioner failed to provide evidence that the investment constituted a deposit. The respondent argued that the investment was not solicited as a public deposit under section 73(4) of the Companies Act, 2013, and thus, the petition was deemed not maintainable.3. The Tribunal considered the submissions of both parties and noted the absence of proof of a public invitation for deposits by the company. The petitioner's complaints to regulatory bodies highlighted disagreements on the nature of the investment and promises made. The Tribunal concluded that the petitioner did not deposit the amount in response to a public invitation, rendering the claim under section 73(4) of the Companies Act, 2013 untenable, leading to the dismissal of the petition.4. The respondent's defense emphasized the investment as a business partnership for a specific project, denying any obligation to treat it as a deposit under the Companies Act, 2013. The company's communication with regulatory authorities and attempts to settle the issue were presented as evidence against the petitioner's claims, asserting that the investment did not fall under the purview of public deposits as per legal requirements.5. The judgment highlighted the legal provisions governing the acceptance of deposits by companies from the public and the obligations imposed under the Companies Act, 2013. The Tribunal's decision to dismiss the petition underscored the lack of evidence supporting the investment as a public deposit, thereby upholding the respondent's argument regarding the nature of the investment and the absence of a valid claim under section 73(4) of the Companies Act, 2013.