2019 (12) TMI 54 - Tri - Companies Law

Tribunal Grants Interest on Deposits, Orders Prompt Payment

Neena Somani Versus Jai Prakash Associates Ltd.

Neena Somani Versus Jai Prakash Associates Ltd. - TMI Issues Involved:1. Maintainability of the petition under Section 73(4) of the Companies Act, 2013.2. Entitlement to interest at the rate of 12/12.5% per annum from the date of maturity till the date of actual payment.3. Binding nature of the Supreme Court judgment in Jaiprakash Associates on this Tribunal.Issue-wise Detailed Analysis:1. Maintainability of the Petition under Section 73(4) of the Companies Act, 2013:The respondent contended that the petition was not maintainable under Section 73(4) of the Companies Act, 2013, as the deposits were made before the commencement of the Act on 01.04.2014. The respondent argued that such deposits are governed by Section 74 of the Act, not Section 73. However, the Tribunal referred to Section 424 of the Companies Act, 2013, which emphasizes the principles of natural justice over the procedural rules of the Code of Civil Procedure. Furthermore, Rule 19 of the Companies (Acceptance of Deposits) Rules, 2014, clarifies that Sections 73 and 74 apply to deposits accepted before and after the commencement of the 2013 Act. The Tribunal also cited the NCLT, New Delhi Bench decision in Ms. Bimla Kothari v. Unitech Ltd., which supported the applicability of Section 73 to all deposits. Therefore, the Tribunal concluded that the petitions were maintainable under Section 73(4) of the Companies Act, 2013.2. Entitlement to Interest at the Rate of 12/12.5% Per Annum:The petitioners claimed interest at the rate of 12/12.5% per annum from the date of maturity till the date of actual payment. The respondent argued that the interest ceased on the maturity date as per the terms and conditions of the Fixed Deposit Receipts (FDRs). However, the Tribunal noted that the respondent had previously agreed to pay interest for the delayed period in CP No.74/ALD/2018. The Tribunal also referred to the Supreme Court's decision in Jaiprakash Associates, which directed the respondent to pay interest at 12/12.5% per annum from the date of maturity till actual payment. The Tribunal emphasized the principle of equality before law under Article 14 of the Constitution of India, asserting that similar relief should be granted to all depositors under similar circumstances. Consequently, the Tribunal held that the petitioners were entitled to interest at the rate of 12/12.5% per annum from the date of maturity till the date of actual payment.3. Binding Nature of the Supreme Court Judgment in Jaiprakash Associates:The respondent contended that the Supreme Court's decision in Jaiprakash Associates was a consent order and not binding on this Tribunal. However, the Tribunal referred to the doctrine of merger and the Supreme Court's decision in Kunhayammed v. State of Kerala, which established that once leave to appeal is granted, the appellate order attracts the doctrine of merger. The Tribunal also cited the Supreme Court's decision in S.E. Graphites (P.) Ltd., which reinforced the binding nature of appellate orders. Therefore, the Tribunal concluded that the Supreme Court's decision in Jaiprakash Associates was binding on this Tribunal, and the petitioners were entitled to the same relief granted in that case.Conclusion:The Tribunal allowed the petitions, directing the respondent company to pay interest at the rate of 12/12.5% per annum from the date of maturity till the date of actual payment to the petitioners within twelve weeks. If the respondent failed to make the payment within the specified period, the petitioners were entitled to recover the amount through the court process at the respondent's cost.