TaxTMI 
TaxTMI 
2022 (7) TMI 722
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of Real Estate. b. The Petitioner had paid Rs. 40,00,000/- (hereinafter referred to as the "amount in question") to the Directors of Respondent No. 3 Company for issuance of shares in the said company on 27th December 2010 by depositing the share application money in A/C No. 5582000100022401 maintained with Karnataka Bank Limited, Karol Bagh. c. The Respondent No.3 Company failed to allot the shares as promised to the Petitioner and returned the money on 9th February 2018 through RTGS. It is alleged that however, the said Company failed to repay the interest accrued on the amount in question as per Companies (Acceptance of Deposits) Rules, 2014 and Rule 17 of the Companies (Acceptance of Deposits) Rules, 2014. d. The Petitioner approached the Registrar of Companies (Respondent No.2) by filing an online complaint on 11th December 2018 for non-compliance of the Companies (Acceptance of Deposit) Rules, 2014 by Respondent No.3 Company and for the recovery of the Interest Amount. The Deputy Registrar of Companies, Delhi issued a Show Cause Notice dated 14th May 2019 to the Respondent No.3 Company. e. Despite the issuance of Show Cause Notice, it is a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt of the Petitioner seeking enquiry into the financial irregularities, serious economic offences and illegal conduct of Respondent No. 3 Company in accepting the deposits in contravention of provisions of Companies Act, 2013 and for repayment of the interest as per the provisions of law. 6. The learned counsel for the Petitioner has contended that Respondent No. 2 has failed to register the case against the Respondent No. 3 and to carry out their statutory duty, which is in blatant violation of provisions of the Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014. It is submitted that the delay in enquiry and investigation on part of the Respondent No. 2 is acting as a shield for the Respondent No. 3 Company. 7. Learned counsel for the Petitioner further submitted that the Section 2(31) of the Companies Act, 2013 defines the term "deposit" as including any receipt of money by way of deposit or loan or in any other form by a company. Further, it is submitted that Rule 2(1)(c) of Companies (Acceptance of Deposit) Rules, 2014, defines the term "deposit" and excludes various amounts received by a Company from the ambit of Deposit which shall not be considered ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....contended that the M/s PVRN & Co., Respondent No. 7, the auditor of Respondent No.3, in collusion and connivance with each other have participated in the wrongdoing and committed the misdeeds of accepting deposits from public despite the same being outrightly barred by law and Respondent No.7 has further failed to report the factum of acceptance of deposits by the Respondent No.3 Company from the public. It is also submitted that the Respondent No. 7, M/s PVRN & Co. has failed to carry out the duty of auditing in accordance with the accounting standards. 14. Furthermore, it is submitted that the Respondent No. 3 Company has failed to return the statutory interest payable to the petitioner as per the Rule 17 of the Companies (Acceptance of Deposits) Rules, 2014 which imposes a penal interest of 18% per annum on the deposits accepted by a private company from the public. It is submitted that the current status of the complaint filed by petitioner is still being shown as "Under Examination", despite the passage of a considerable amount of time, due to inaction on the said complaint by Respondent No. 2. 15. It is submitted that the Respondent No. 2 has not considered the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....5 read with General Circular No. 15/2015, the share application money given by the Petitioner for allotment of shares is not a deposit after the commencement of Companies Act, 2013 with effect from 1st April 2014. 21. Furthermore, it is submitted that with regard to the investor complaint filed by the Petitioner, two letters dated 11th December 2018 and 31st October 2019 had been sent to the company, however, no response has been received. It is averred that the letters were sent as a matter of practice even though the office cannot enforce the matter sought by the complainant as the same is outside the jurisdiction of Respondents No. 1 & 2 as the said transaction of amount in question does not fall under the definition of deposit under Companies Act, 1956 read with Rule 2(b)(vii) of Companies (Acceptance of Deposits) Rules, 1975. 22. In light of the aforesaid, it is submitted that the instant petition is devoid of merits and this Court may be pleased to dismiss the same. 23. Heard learned counsels appearing on behalf of parties at length and perused the record. QUESTION FOR ADJUDICATION 24. A mere perusal of the petition makes it evident that the crux of the entire ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ned to him by the Respondent Company in the year 2018. Hence, the same shall be governed by the provisions of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975 and the Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014 does not apply. 31. Rule 2(b)(vii) of the Companies (Acceptance of Deposits) Rules, 1975 reads as under: "(b) "deposit" means any deposit of money with, and includes any amount borrowed by, a company, but does not include- (vii) any amount received by way of subscriptions to any shares, stock, bonds or debentures such bonds or debentures as are covered by sub-clause (x) pending the allotment of the said shares, stock, bonds or debentures and any amount received by way of calls in advance on shares, in accordance with the Articles of Association of the Company so long as such amount is not repayable to the members under the Articles of Association of the Company ;" 32. It is clear that as per Rule 2(b)(vii), irrespective of the period for which shares are not allotted, any amount by way of subscriptions to any shares, pending the allotment of the said shares, shall remain excluded from the purv....