Bombay High Court
Prakash S/O Mukundrao Bhele vs Union Of India Thr. Its Secty., And Anr on 24 February, 2017
Author: Vasanti A. Naik
Bench: Vasanti A Naik, V.M. Deshpande
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH AT NAGPUR
WRIT PETITION NO.65/2011
PETITIONER: Prakash s/o Mukundrao Bhele
Age : 61 years, Occ. : Retired,
R/o 85, plot area, Visava Building
(Near Narendra Nagar) Post. Parvati Nagar,
Nagpur - 440027 (Maharashtra).
...VERSUS...
RESPONDENTS : 1. Union of India
Ministry of Corporate Affairs,
5th Floor 'A' Wing, Shastri Bhavan,
Dr. Rajendra Prasad Road,
New Delhi - 110001.
Through its Secretary.
2. Industrial Finance Corporation of India Limited,
I.F.C.I. Tower - 61, Neharu Place,
New Delhi - 110 019.
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Shri H.B. Shende, Advocate for petitioner
Mrs. Mugdha Chandurkar, Advocate for respondent no.1
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CORAM : SMT. VASANTI A NAIK, AND
V.M. DESHPANDE, JJ.
DATE : 24.02.2017
ORAL JUDGMENT (PER : SMT. VASANTI A. NAIK, J.)
By this petition, the petitioner seeks a direction to the respondent no.1 to refund the sum of Rs.92,300/- to the petitioner.
The petitioner was a Government Servant and had purchased two bonds, namely, the Retirement Bond and the Educational ::: Uploaded on - 28/02/2017 ::: Downloaded on - 01/03/2017 00:46:47 ::: wp65.11.odt 2 Bond on 6.9.1996 in the sum of Rs.6,000/-. According to the petitioner, the maturity period of the bonds was eight years and thirteen years respectively. The petitioner had applied for the redemption of the bonds on 5.3.2008, however, the respondent no.2 - Industrial Finance Corporation of India Limited rejected the claim of the petitioner and informed the petitioner that the maturity amount had been transferred to the Investor Education and Protection Fund, as per the provisions of Section 205-C of the Companies Act, 1956. The petitioner again applied for redemption but the claim was rejected. The petitioner, has, therefore filed this writ petition, seeking a direction against the respondents to pay the maturity amount of the bonds to the petitioner as per the conditions of the bond.
Shri Shende, the learned Counsel for the petitioner submitted that the petitioner had invested his money in the said bonds and it would not be proper for the respondents to refuse to pay the maturity amount of the said bonds to the petitioner. It is submitted that the petitioner was not aware that the respondent no.2 had applied for early redemption of the bonds and therefore, the petitioner was not able to make the claim for payment within seven years from the date on which, early redemption was sought by the respondent no.2. ::: Uploaded on - 28/02/2017 ::: Downloaded on - 01/03/2017 00:46:47 :::
wp65.11.odt 3 It appears on a reading of the affidavit-in-reply filed on behalf of the respondent nos.1 and 2 and on a reading of the terms of the bond that there was an early redemption clause in the bond and the bonds could have been redeemed at an early date either by the bondholders or by the Industrial Finance Corporation of India. The Industrial Finance Corporation of India had sought for the early redemption of the bonds on 6.9.2000. The early redemption option was exercised by the respondent no.2 - I.F.C.I. on 6.9.2000 and after exercise of the option, a notification dated 4.6.2000 was published by the respondent no.2 - I.F.C.I. requesting the bondholders like the petitioners to submit the bond certificate for redemption of the amount. After issuing the notification dated 4.6.2000, the respondent no.2 published a similar notification in the newspapers that were published all over India on 5.8.2005 and 31.3.2007. Also, individual letters of intimation were issued to the bondholders on 5.6.2000, 16.11.2004, 1.10.2005 and 1.6.2006 to submit the certificates for redemption. A last reminder was also issued on 26.7.2007, whereby the bondholders were asked to submit the original bonds for redemption. The petitioner did not seek the redemption of the amount by submitting the original bond certificates during a period of seven years from the date of exercise of redemption option of the bond by the respondent no.2 - I.F.C.I. Hence, as per the provisions of ::: Uploaded on - 28/02/2017 ::: Downloaded on - 01/03/2017 00:46:47 ::: wp65.11.odt 4 Section 205 -C of the Act, the amount that remained unpaid to the petitioner was credited to the Investor Education and Protection Fund. As per the Explanation to Section 205 - C of the Act, it is made clear that no claims would lie against the Fund, i.e., Investor Education and Protection Fund or against the Company in respect of individual amounts that were unclaimed and unpaid for a period of seven years from the dates that they first became due for payment and no payment shall be made in respect of any such claims. It is clear from the Explanation that after the amount remains unclaimed and unpaid for a period of seven years from the date on which it becomes due for payment, the same cannot be claimed by the concerned person. The said amount would then be utilized for the promotion of investors' awareness and protection of the interests of investors. The case of the petitioner that the petitioner did not become aware about the notification issued by the respondent no.2 and hence, the amount should be returned to the petitioner is not well founded. An almost similar issue came up for consideration before the Delhi High Court and the Delhi High Court has in the case of Nivedita Sharma... Versus...The Industrial Credit & Investment Corporation of India and others [Writ Petition (Civil) No.10517/2009] dismissed the petition filed by the petitioner therein on 7.7.2011. The Delhi High Court held that the Laws prescribing reasonable period of limitation have been ::: Uploaded on - 28/02/2017 ::: Downloaded on - 01/03/2017 00:46:47 ::: wp65.11.odt 5 upheld and it ensures that the litigants are diligent in seeking the remedies in court and prohibits stale claims. By upholding the validity of Section 205-C of the Companies Act, it was held that the amount deposited by the petitioner therein under the bonds could not have been returned to the petitioner as it remained unclaimed and unpaid for a period of seven years.
Hence, for the reasons aforesaid and also for the reasons recorded in the judgment of the Delhi High Court, dated 7.7.2011 in Writ Petition (Civil) No.10517/2009 [Nivedita Sharma...Versus...The Industrial Credit & Investment Corporation of India and others], the writ petition is dismissed with no order as to costs. Rule stands discharged.
JUDGE JUDGE
Wadkar
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