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2022 (1) TMI 269 - HC - Companies LawScope of 'deposits" - advances received towards sale consideration of immovable property - alleged violation of Section 73 of the Act read with Companies (Acceptance of Deposits) Rules, 2014 - HELD THAT:- Basing on the complaints lodged by one Guruzala Venkateswara Rao on various dates alleging that the 1st petitioner company has been collecting deposits through various schemes and has defaulted in refund of matured amounts to the depositors, the 1st respondent ordered inspection of the 1st petitioner Company - there are considerable force in the contention of the petitioners that the said Guruzala Venkateswara Rao foisted many false complaints against the 1st petitioner company in order to settle his personal scores with the 1st petitioner and the other group of companies. Further, the said Guruzala Venkateswara Rao is neither allottee nor he is in any way directly involved or linked with the business transactions of the petitioners. Whether the amounts collected by the petitioners for sale of immovable property as advance would come under the purview of ‘deposits’ or would exempt from the purview of ‘deposits’ by virtue of Rule 2(1) (c) (xii) (b) of the Companies (Acceptance of Deposits) Rules, 2014? - HELD THAT:- Admittedly, the 1st petitioner company had purchased the agricultural land and after obtaining the permission from the competent authorities for conversion of agricultural land into non-agricultural land, the 1st petitioner also obtained permission for development of the land into layout of plots for residential/commercial housing. To unlock the funds invested in development of the lay outs etc., the 1st petitioner company had offered to sell the land in its possession and for this purpose entered into written agreement/arrangement. By virtue of proviso to Rule 2 (1) (c) (xii) (b) of the Companies (Acceptance of Deposits) Rules, 2014, the advances received by the 1st petitioner for sale of immovable property are exempted from the purview of the deposits. In view of the proviso to Rule 2 (1) (c) (xii) (b) of the Companies (Acceptance of Deposits) Rules, 2014, continuation of proceedings against the petitioners/A-1 to A-4 would amount to abuse of process of the Court - Criminal Petition is allowed.
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