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2021 (6) TMI 554 - HC - Insolvency and BankruptcyDirection to respondent to handover the properties to Resolution Professional - seeking permission to submit a report with regard to assets and liabilities that may come to the notice of the petitioner/respondent herein in due course of his duties - HELD THAT:- In the case on hand, Annexure-C discloses that memorandum of association of petitioner herein discloses that object for which the Company is established is to purchase or otherwise to acquire land or house building and other properties and maintain, sell, allot houses, apartments, flats or part thereof to the shareholders or any other person on such terms and conditions as may be deemed fit by the Company. The petitioner-Company is also not disputing the fact that they have collected the money and they have neither refunded the money nor allotted the flats to the homebuyers, who invested the money. Hence, the main contention of the petitioner’s counsel that the petitioner is not the financial establishment and thus, the Act, 2004 is not applicable, cannot be accepted. The Court has to take note of statement of objects for bringing the enactment. The very object is to prevent committing default in return to the public, the deposits on maturity and thereby cheating the depositors of their legitimative due. The term “default” to include fraudulent failure to return the deposits or pay interest, bonus and profit or perform service promised. The term “deposit” is defined under Section 2(2) of the Act, which includes and shall be deemed always to have included any receipt of money or acceptance of any valuable commodity by any Financial Establishment to be returned after a specified period or otherwise, either by cash or in kind or in the form of a specified service with or without any benefit in the form of interest, bonus, profit or in any other form - there is a force in the contention of the petitioner’s counsel that the provisions of the IBC is having overriding effect over other laws and the same would prevail in view of Section 238 of the Code. Hence, the petitioner has made out grounds to quash the proceedings initiated against the petitioner under Section 7(1) of the Act, 2004. Petition allowed.
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