Property advance payments not considered deposits under Companies Act. Compliance with land regulations noted. Vexatious litigation dismissed.

The court held that the petitioners' collection of advances for property sales, which were adjusted against the property per agreement terms, did not constitute deposits under the Companies Act. The court noted the petitioners' compliance with land regulations and dismissed the complaints brought by an individual with a history of vexatious litigation. Consequently, the court allowed the criminal petition, quashed proceedings in C.C.No.12 of 2020, and closed all related pending petitions.

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Issues Involved:
1. Whether the amounts collected by the petitioners for the sale of immovable property as advance come under the purview of 'deposits' as defined under Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
2. Whether the proceedings initiated against the petitioners under Section 76-A of the Companies Act, 2013 should be quashed.

Detailed Analysis:

Issue 1: Definition of 'Deposits' under Section 73 of the Companies Act, 2013
The petitioners argued that the amounts collected were advances for the sale of immovable property and not deposits. They cited Rule 2 (1) (c) (xii) (b) of the Companies (Acceptance of Deposits) Rules, 2014, which excludes advances received towards the sale consideration of immovable property from the definition of 'deposits,' provided such advance is adjusted against the property in accordance with the terms of the agreement. The petitioners contended that they had entered into agreements/M.O.Us with customers and refunded the advance sale consideration only to those who did not pay the entire sale consideration.

The respondent countered that the petitioners were collecting money as advances, paying interest on such advances, and refunding money without the actual sale of property, thereby falling under the definition of 'deposits' as per Rule 2 (1) (c) (xii) (b). The respondent argued that the petitioners' actions indicated an intention to collect deposits rather than genuine advances for property sales.

Issue 2: Quashing of Proceedings under Section 76-A of the Companies Act, 2013
The petitioners claimed that the complaint filed by the respondent was based on false allegations made by an individual with a personal vendetta, and that the amounts collected were exempt from being classified as deposits. They pointed out that the complaint lacked cogent facts or evidence to prove the allegations. The petitioners also referred to a previous order by the High Court dismissing multiple writ petitions filed by the same individual against them, indicating a pattern of harassment.

The respondent maintained that the petitioners had violated Section 73 of the Companies Act, 2013, by collecting deposits in the guise of advances for property sales and that the proceedings should continue.

Court's Findings:
The court examined Rule 2 (1) (c) (xii) (b) of the Companies (Acceptance of Deposits) Rules, 2014, which states that advances received for property sales are not considered deposits if adjusted against the property per the agreement terms. The court noted that the petitioners had obtained necessary permissions for land conversion and development, and the advances received were for genuine property transactions.

The court found that the complaints were lodged by an individual with a history of filing multiple cases against the petitioners, as evidenced by a previous High Court order dismissing his writ petitions and imposing costs for abuse of process. The court concluded that the advances received by the petitioners were exempt from the definition of deposits under the Companies (Acceptance of Deposits) Rules, 2014.

Conclusion:
The court held that the continuation of proceedings against the petitioners would amount to an abuse of the court process. Therefore, the criminal petition was allowed, and the proceedings in C.C.No.12 of 2020 were quashed. All miscellaneous petitions pending in this criminal petition were also closed.

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