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1. These company petitions have been filed under Section 433(b), (d), (e) and (f) of the Companies Act, 1956 for winding up of the company known as M/s. Incan Mutual Fund Benefit Limited and Incan Group of Companies (Incan Fertilizers and Chemicals Limited; Ratan Micronutrients Limited; Vinayak Trading Pvt. Limited; Incan Construction Limited; Incan Consultancy Services Limited; Deva Investment & Leasing Limited; Incan Mutual Benefit Limited; and Incan International Limited) having their registered office at Incan Bhawan, B-1/37, Sector F, Kapoorthala, Aliganj, Lucknow.

2. The petitioners' case is that the petitioner No. 1, namely, Incan Employees Welfare Association, is the Registered Association duly registered with the Registrar of Firms and Societies at Punjab, Chandigarh and the other petitioners are either office bearers of the association or the individual investors. The members of the association deposited different amounts of money with M/s. Incan Mutual Fund Benefit Limited, which is the sister concern of M/s. Incan Group of Companies. The total of the sums invested by the members of the association in Chandigarh, Jalandhar and Ludhiana is approximately Rs. 51.99 crores. M/s. Incan Group of Companies with its above named sister concerns by way of lucrative offers collected lot of money from individual investors with a positive assurance that they will get very good returns. The company had opened many branches in the States of Uttar Pradesh, Haryana, Punjab, Himachal Pradesh and Union Territory Chandigarh. The main object of M/s. Incan Mutual Fund Benefit Limited was lending and borrowing to and from its members and the investments were made in fertilizers, real estate as well as agro pharma plantations. The opposite-party No. 1 as on 31-12-1998 had deposits worth Rs. 7,200 lakhs and the maturity amount was approximately Rs. 8,200 lakhs. The opposite-party Nos. 1 and 2 purchased many properties across the country including a plot of 18,900 sq. ft. at 5, Lal Bahadur Shastri Marg, South Avenue, Under Havelock Road Scheme at Baraf Khana, Lucknow. The money, which the company received from the investors, was utilised in purchase of the said plot. There are certain other properties earned by the company. A few of them may be referred to as land measuring 36000 sq. ft. near Dalibagh Colony; 53 Bigha Farm House in village Kumrawan P.S. Itaunja; 22 Bigha land near Negoha Lucknow Raibareilly Road; 14 Bigha land in Kundanganj and 8 Bigha land in village Kankaha Mohan Lal Ganj. These companies accepted deposits from the investors under various schemes, such as 'High Premium Fixed Deposit Scheme'; 'Monthly Recurring Deposit Scheme'; 'Recurring Deposit Scheme'; 'Short Term Deposit'; 'Daily Deposit Scheme' and Saving Account. It is noteworthy that the opposite-parties 1 and 2 committed default in making repayment to its depositors/members the amounts deposited by them. According to a Valuation Report prepared on 30-6-1998 by a registered chartered Engineers, Adjusters and Valuers, the opposite-party No. 1 as Chairman of the Incan Group of Companies own many other establishments, which are its sister concerns. A detailed list of such Incan Group of Companies is as follows :--

5. Mr. Manjit Singh Aujla filed counter-affidavit on behalf of opposite-party No. 1 with the allegations that he has not been furnished a copy of the Certificate of Registration of Incan Employees Welfare Association and he was not the Chairman of any such company and, therefore, he deserves his right to reply about the said certification of the Welfare Association at the later stage. As a matter of fact, M/s. Incan Group of Companies is a misnomer and therefore, such a company has no legal entity. The opposite-party No. 2 mobilised deposits from its members in accordance with the terms and conditions of the various schemes. The said company was established in 1992 and it successfully carried out its operations by making timely payments to its members/depositors. It was only in 1998 that this company suffered the wrath of the depositors. As there was a run on the deposits, the company was put in a precarious condition. Due to severe liquidity crunch, the opposite-party No. 2 could not fulfil its commitment towards its members and on account of the compelling circumstances, it filed a petition for re-schedulement of payment before the Company Law Board, Northern Bench, New Delhi. Mr. Aujla submitted further that he has no concern with the Incan Mutual Fund Benefit Limited, as he ceased to be the Director of the said company on March 31, 1997. He was not a party to the framing of the scheme floated by the company. As regards the properties, Mr. Aujla asserted that the properties, referred to in para 9 of the petition, do not belong to M/s. Incan Mutual Fund Benefit Limited, as these properties were not purchased out of the funds of the said company. As regards M/s. Incan Fertilizers and Chemicals Limited is concerned, it is a separate and independent legal authority and has no concern with the Incan Mutual Fund Benefit Limited. The opposite-party No. 1 filed an application for classification and/or modification of Company Law Board's Order dated August 31, 1999 under Section 58A(9) of Companies Act, 1956 and Section 45QA(2) of Reserve Bank of India Act, 1934. Besides that, it also filed an application under Section 186 of the Companies Act before the Company Law Board. However, the Board rejected the said application under Section 45QA(2) of Reserve Bank of India Act, 1934 by virtue of the Order dated 30th June, 2000. The opposite-party No. 1 then challenged the said order of June 30, 2000 by filing a C.M. (M) 536/2000 before Delhi High Court in the said petition, on being admitted, is pending adjudication. The Company Law Board allowed the application under Section 186 of the Companies Act vide Order dated June 30, 2000 and in pursuance of the said Order, Mr, Justice S.N. Sapra, Retired Judge of Delhi High Court, has already taken initiative for holding a meeting of Shareholders for the purpose of formulating the scheme regarding the payment of deposits. Mr. Justice Sapra asked for a certified copy of Shareholders but the Registrar of Companies, Kanpur failed to carry out the compliance. As the Company Law Board vide its Order of August 31, 1999 altered the terms and conditions of deposits in terms of Section 45QA(2) of the Reserve Bank of India Act, 1934 read with Section 58 of the Companies Act, 1956, the petitioners/depositors as well as the company are under obligation to follow the said terms and conditions. By virtue of the said order, the terms, on which the deposits were made, were superseded. As a consequence, the company will now make payments to the depositors in pursuance of the said order with further modified terms as laid in the order of June 30, 2000 of the Company Law Board. Since the issue relating to the payment of deposits has already been adjudicated by the Company Law Board, the present petition is not maintainable nor the petitioner's notice under Section 434 of the Companies Act is legal and valid. Further, it was also alleged that the petitioners failed to establish a cause of action for winding up of M/s. Incan Group of Companies, as such, the petitioner is liable to be dismissed.

10. The crucial question, which arises for determination, is as to whether the company M/s. Incan Group of Companies and M/s. Incan Mutual Fund Benefit Limited are liable to be wound up under the provisions of Section 434 of the Companies Act. Another point to be decided is as to whether the petitioners are entitled to recover their money along with interest from the opposite-parties or their assets.

11. Before proceeding to discuss the merit of this case, it would be appropriate to discuss the preliminary objections raised by the opposite-party No. 2 regarding maintainability of this petition. The first such objection asserted by the contesting opposite-party No. 2 is that since the petitioners have sought for winding up of a group of companies, which is not a legal entity, this petition is not maintainable. The petitioners have impleaded in the array of opposite-parties, M/s. Incan Group of Companies, Incan Bhawan, B-1/37, Sector-F, Kapoorthala, Aliganj, Lucknow through its Chairman Manjit Singh Aujla. As a matter of fact, the petitioners deposited their money in the account of M/s. Incan Mutual Fund Benefit Limited and since the Head Office of this company is accommodated in the Incan Bhawan, B-l/37, Sector-F, Kapoorthala, Aliganj, Lucknow and further since M/s. Incan Group of Companies have floated as many as eight other companies with the investment of the funds collected by the Incan Mutual Fund Benefit Limited, the petitioners have depicted M/s. Incan Group of Companies as the leading company having its assets and liabilities with other companies including M/s. Incan Mutual Fund Benefit Limited. Mr. Manjit Singh Aujla was the Managing Director of M/s. Incan Mutual Fund Benefit Limited and the Director of other companies. Mr. B.D. Sharma, who is the representative of the M/s. Incan Group of Companies, has also published notice in newspapers under the title and heading of M/s. Incan Group of Companies, as is evident from a public notice advertised in 'Dainik Jagran' a local Hindi Newspaper of October 25, 1999 (Copy Annexure 6). Mr. B.D. Sharma clearly indicates by virtue of the said notice that the Incan Group of Companies shall not be responsible for the individual decision of senior executives of the Incan Group of Companies, who had been mischievously misrepresenting for their own benefit. Though the Incan Group of Companies is comprised of Incan Fertilizers and Chemicals Limited, Ratan Micronutrients Limited, Vinayak Trading Pvt. Limited, Incan Construction Limited, Incan Consultancy Services Limited, Deva Investments & Leasing Limited, Incan International Limited, Merit Pharmaceuticals Limited and Incan Mutual Benefit Limited, the petitioners have claimed relief against the opposite-party No. 2 with whom they had invested their money. As admittedly, the opposite-party No. 1 M/s. Incan Group of Companies is not a legal entity, the question of any relief being granted against it or its winding up would not arise at all. Learned Counsel appearing on behalf of the petitioners has during the course of arguments dropped the petitioners' prayer for any relief or winding up proceedings against the opposite-party No. 1. As a matter of fact, the petitioners and other investors, as supplemented further by the petitioners' counsel, were mislead by the publicity, which was made on behalf of M/s. Incan Group of Companies that this company was managing the affairs of all the abovementioned nine companies. Therefore, the relief in view of the prayer clause of the petitioners' petition shall remain confined to the liabilities of M/s. Incan Mutual Fund Benefit Limited only. In view of this, the contention pressed into service on behalf of the opposite-party No. 2 that the petition is not maintainable stands rejected.