TaxTMI 
TaxTMI 
2013 (1) TMI 667
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.... 1. Co. Appl. (C) 4 of 2011 is an application by the Official Liquidator ('OL') under Section 446 of the Companies Act, 1956 ('Act') seeking a direction to the Respondent, National Stock Exchange of India Ltd. ('NSEIL') to deposit with the OL a sum of Rs. 1.10 crores together with interest @ 18% p.a. from 10th November 2010 till the date of realisation. Co. Appl. 401 of 2012 is an application by NSEIL under Rule 9 of the Companies (Court) Rules, 1959 read with Section 529A of the Act to permit the Defaulters' Committee of the NSEIL to deal with the amount lying with it. 2. The background to these applications is that by an order dated 6th September 2010, this Court passed an order for the winding up of Ganga Yamuna Finvest P....
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....nstituted as the clearing house of NSEIL under Byelaw 16 of Chapter-IX of NSE byelaws framed in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956 ('SCRA'). Chapter-XII of NSEIL byelaws deals with the declaration of defaulter of a trading member. It is submitted that upon a trading member being declared a defaulter, the Defaulters' Committee of NSEIL is required to deal with the money in accordance with Byelaw 23 of ChapterCO. XII of NSEIL byelaws. Under Rule 20(f) of NSEIL Rules, the provision of Chapter-XII of NSEIL byelaws pertaining to default becomes applicable to a trading member expelled from NSEIL as if such trading member has been declared a defaulter. Consequently, when a trading member is declared a....
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....ith it. NSEIL, by its reply dated 23rd February 2011 declined the said request stating that it was governed by the rules and byelaws of NSEIL which was in turn governed by the Securities & Exchange Board of India ('SEBI') under Section 4 of SCRA. It is stated by NSEIL that pursuant to the letter dated 16th May 2011 received from the OL, the Defaulters' Committee at a meeting held on 30th June 2011 approved of the setting aside of Rs. 83,91,000. On 21st November 2011, the Court directed notice to issue in Co. Appl. (C) 4 of 2011 filed by the OL. 9. In Co. Appl. 401 of 2012 filed by NSEIL on 22nd February 2012, notice was first directed to issue on 28th February 2012. In the said application, NSEIL disclosed that the Defaulters' Com....
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....to be entitled" and that this did not include the deposit placed by the company with NSEIL which now vests with the Defaulters' Committee. He laid emphasis on the words "is or appears to be entitled" following the words "property, effects and actionable claims", to urge that the sum of Rs. 1.10 crores was not an amount to which the company is entitled. He submitted that even in relation to the claims by the secured creditors, DRT-II accepted the plea of NSEIL that the aforementioned amount would not be available for realisation by the secured creditors. Reliance is placed on the decisions in Bombay Stock Exchange v. Jaya I. Shah AIR 2004 SC 55 and Collector of Customs v. Dytron (India) Ltd. 1999 (108) ELT 342 (Cal). 12. Appearing on beha....
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....r by this Court on 6th September 2010, the assets and the properties of the company came to the custody of the PL, but, in fact, the properties did not vest in the PL. Therefore, the PL acts as an agent of the company, a trustee of the properties as also the officer of the Court. He acts under the directions of the Court. This explains why under Section 457 (1) of the Act, it is the liquidator who has been given the powers thereafter to represent the company under liquidation in all the proceedings. 15. The decisions relied upon by learned counsel for NSEIL do not deal with the interplay between NSEIL byelaws, rules, regulations and the provisions of the Act. In Bombay Stock Exchange v. Jaya I. Shah, no doubt, the Supreme Court obs....
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.... Therefore, the dues of the Customs authorities had to be met before the imported goods were validly sold as assets of the company in liquidation. It is in that context it was held that "the claims of the Customs Authorities would, therefore, stand outside proceedings under Sections 529, 529A and 530 of the 1956 Act." 17. In the present case, although the company was expelled as a trading member on 27th July 2009, prior to the order of winding up, resulting in the deposit made by it with NSEIL vesting in the Defaulters' Committee, the claims of the investors had not been met out of that fund by the Defaulters' Committee. It, in fact, set aside Rs. 83,91,000 pursuant to the letter written to the NSEIL by the OL. It has met the claims of 6....