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TMI Blog2020 (3) TMI 1345X X X X Extracts X X X X X X X X Extracts X X X X ..... r the 'Lump-sum Investment Plan' Scheme. Under the Lump-Sum Investment Plan, the Corporate Debtor has promised to provide return on the investment amount along with principal amount payable at the time of maturity of the term. Consequently, under the Recurring Investment Plan, the Corporate Debtor has assured to provide the investors interest on their investment amounts at the time of expiry of the term along with the investment amount. Some plans under both the schemes even offer for yearly returns. 3. The present application pertains to the aforesaid 'Lump-sum Investment Plan' and 'Recurring Investment Plan' of the Corporate Debtor, where the Corporate Debtor had assured the Financial Creditors that on the maturity of the particular scheme, the Financial Creditors will either be allotted plots of land or be paid multi-fold returns on their investments. The Corporate Debtor also committed to pay the Financial Creditors a return on investments for time value of money, based on the amounts of investment made by the Financial Creditors. The monies were collected in the year 2012-2013 and the plans opted by the Financial Creditors matured in the year 2017-2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5(7) and 5(8) and the same, respectively, are quoted below: - "Section 5(7) "financial creditor" means any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred to; " "Section 5(8) (8) "financial debt" means a debt alongwith interest, if any, which is disbursed against the consideration for the time value of money and includes-- (a) money borrowed against the payment of interest; (b) any amount raised by acceptance under any acceptance credit facility or its de-materialised equivalent; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; (d) the amount of any liability in respect of any lease or hire purchase contract which is deemed as a finance or capital lease under the Indian Accounting Standards or such other accounting standards as may be prescribed; (e) receivables sold or discounted other than any receivables sold on non-recourse basis; (f) any amount raised under any other transaction, including any forward sale or purchase agreement, having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position of the company, the credit rating obtained, the total number of depositors and the amount due towards deposits in respect of any previous deposits accepted by the company and such other particulars in such form and in such manner as may be prescribed; (b) filing a copy of the circular along with such statement with the Registrar within thirty days before the date of issue of the circular; (c) depositing such sum which shall not be less than fifteen per cent, of the amount of its deposits maturing during a financial year and the financial year next following, and kept in a scheduled bank in a separate bank account to be called as deposit repayment reserve account; (d) providing such deposit insurance in such manner and to such extent as may be prescribed; (e) certifying that the company has not committed any default in the repayment of deposits accepted either before or after the commencement of this Act or payment of interest on such deposits; and (f) providing security, if any for the due repayment of the amount of deposit or the interest thereon including the creation of such charge on the property or assets of the company: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest thereon within the time specified in sub-section (1) or such further time as may be allowed by the Tribunal under sub-section (2), the company shall, in addition to the payment of the amount of deposit or part thereof and the interest due, be punishable with fine which shall not be less than one crore rupees but which may extend to ten crore rupees and every officer of the company who is in default shall be punishable with imprisonment which may extend to seven years or with fine which shall not be less than twenty-five lakh rupees but which may extend to two crore rupees, or with both." "76. Acceptance of deposits from public by certain companies.-- (1) Notwithstanding anything contained in section 73, a public company, having such net worth or turnover as may be prescribed, may accept deposits from persons other than its members subject to compliance with the requirements provided in sub-section (2) of section 73 and subject to such rules as the Central Government may, in consultation with the Reserve Bank of India, prescribe: Provided that such a company shall be required to obtain the rating (including its networth, liquidity and ability to pay it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fer the arguments of the applicants that there is a default in payment of debt, therefore, Section 7 application is maintainable. At this juncture, we would like to refer the definition of default as defined in Section 3(12) of the Code:- "Section 3(12) (12) "default" means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not l[paid] by the debtor or the corporate debtor, as the case may be;" 8. Mere plain reading of the provisions shows that default means nonpayment of debt, whereas in the aforementioned para, we held that the amount which the applicants deposited does not come under the definition of the debt. Therefore, we are unable to accept the contention of the applicants that there is a default in payment of debt. 9. As we have already held in the matter of Satish Chand Gupta vs. Servel India Private Limited (IB) 1886 (ND)/2019 and the present case is also covered with this decision, therefore, we are of the considered view that though the applicants have some other remedy under the law to recover the amount which they have deposited with the Corporate Debtor but so far initiation of the Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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