Recovering unrefunded interest money and principal amount from fixed deposits with investment company in India

We all have a very good habit of saving for the future. We invest our hard earned savings either in the banks or in some private company or in an NBFC (Non-Banking Finance Company). Well, banks are the safest as your savings are insured upto the value of Rs. 1,00,000=00. Registered and reputed private companies are a good option too. But what about the cluster of NBFC's that have mushroomed all over the country. How safe is your deposit with these companies? Very frequently there is news of a scam committed by some financial company. There are cases where the finance company has stopped paying interest and maturity amount to its depositors. The helpless investors, with their dreams shattered, run from pillar to post in search of recourse against these finance companies. Nothing happens, either because the investor cannot afford a lawyer to fight a court case or he is ignorant of the laws. Here I wish to tell you the ways to tackle such a problem and how you can lodge a complaint against the defaulting company.

ACT AGAINST THE DEFAULTING COMPANY

First, as soon as your cheque is bounced, try to collect as many investors as possible for a united action. To collect more people, give your advertisement free of cost in the helpline column of various newspapers asking the investors of the defaulting company to telephone you. When you have collected many investors, hold a meeting and collect individual applications from each investor to make a joint complaint.

First thing you have to do is jointly approach the defaulting company with a written application asking for refund of your interest amount and the maturity amount. If you all are not satisfied with the reply of the owner of the defaulting company, then jointly lodge a complaint against the defaulting company with the local police department. If the value of the total amount of deposit exceeds Rs. 20,00,000=00

then it falls in the vicinity of the Economic Offences Wing of the Crime Branch situated at the Crawford market, Mumbai. File your joint complaint with the Jt. Commissioner of Police at the EOW of Crime Branch.

Another recourse is that you file a complaint with the relevant Consumer Forum. You can also file a complaint against the defaulting company with the Reserve Bank of India, Company Law Board and MRTP ( Monopolies and Restrictive Trade Practices, New Delhi).

Company Law Board (CLB) is now vested with additional powers to take action against the defaulting company. Details about Company Law Board and the format of filing a complaint is given below

DEFAULTING NBFC'S ARE BOUND TO MAKE REFUNDS

Now the powers have been vested with the Company Law Board for directing the defaulting NBFCs to make repayment of the deposits/interest with a view to protect the interests of the depositors.

Reserve Bank of India (Amendment) Act,1997 have added section 45QA to the Act so as to empower the Company Law Board to order repayment of deposit.

WHAT IS SECTION 45QA HOME

Section 45QA reads as follows :

"Power of Company Law Board to order repayment of deposit. -

(1) Every deposit accepted by a non-banking financial company, unless renewed, shall be repaid

and the other persons interested in the matter.

To give effect to the above provisions, Company Law Board Regulations 1991 have been amended vide Notification No.GSR 433 (E) dated 1st August, 1997-(1997) 26 CLA (ST) 112.

The application for refund of deposits and interest thereon, can be made in prescribed Form No.4 of the Company Law Board Regulations 1991 in duplicate along with a fee of Rs.50 by way of Demand Draft/Pay Order in favour of Pay & Accounts Officer, Department of Company Affairs to the Bench Officer, Company Law Board, at New Delhi/Calcutta/Mumbai/Chennai under whose jurisdiction, the Registered Office of the defaulting company falls.

The following table gives the jurisdiction of various offices of the Company Law Board :-in accordance with the terms and conditions of such deposit.

(2) Where a non-banking financial company has failed to repay any deposit or part thereof in accordance with the terms and conditions of such deposit, the Company Law Board constituted under section 10E of the Companies Act, 1956 (1 of 1956) may, if it is satisfied, either on its own motion or on an application of the depositor, that it is necessary so to do to safeguard the interest of the company, the depositors or in the public interest, direct, by order, the non-banking financial company to make repayment of such deposit or part thereof forthwith or within such time and subject to such conditions as may be specified in the order:

Provided that the Company Law Board may, before making any order under this sub-section, give a reasonable opportunity of being heard to the non-banking financial company.

FORM NO.4

(See Regulation 37)

APPLICATION BY DEPOSITOR UNDER SECTION 58 A (9) OF THE ACT OR SECTION 45 QA of the RBI Act, 1934. BEFORE THE COMPANY LAW BOARD (...... BENCH)

IN THE MATTER OF THE COMPANIES ACT, 1956 (1 OF 1956) SECTION 58 A/RBI ACT,1934.

AND

IN THE MATTER OF : (Name of the Depositor-applicant)

AND

IN THE MATTER OF : (Name of the Company)

1. INTRODUCTION:

1. Name and address of the Depositor-applicant :

2. Name of the company and address of its Registered Office :

3. Name(s) of Depositor(s) (if being filed jointly by many depositors) with full address and amount of deposit. (To be enclosed as annexure giving details under following heads).

S. NO NAME ADDRESS DEPOSIT AMOUNT DATE RATE OF INTEREST MATURITY AMOUNT DATED REMARKS

HOME

2. TRANSACTION:

1. Total amount of Deposit :

2. Fixed Deposit Receipt no. & Date (Photostat copy to be enclosed) :

3. Terms and Conditions of Deposit as also date of maturity of Deposit :

4. Details of payment made, by the company, if any :

5. Actual amount due as on date of application (Principal/interest) :

6. Details of correspondence, if any, made between the company and the Depositor (copy of correspondence to be enclosed) :

7. Any other particular(s) as may be considered relevant :

PRAYER:

The Depositor -applicant, therefore, prays : -

(i) that the company be directed to make repayment of the aforesaid Deposit(s) along with interest due thereon in accordance with the Terms and Conditions of the Deposit.

(ii) that such further orders be passed as the Company Law Board may deem fit in the circumstances of the case.

(Signature of the Depositor-applicant)

Place ................

Date ...................

Important:

1. The application is required to be accompanied by a demand draft of Rupees Fifty, drawn in favour of "The Pay and Accounts Officer, Department of Company Affairs, New Delhi/ Bombay/ Calcutta/Chennai."

2. Application is to be submitted in duplicate at one of the following addresses (suiting your territorial jurisdiction).

ADDRESS OF CLB BENCH
Bench officer
Western Region branch
2nd Floor, N.T.C.House,
15, Narottam Morarjee Marg,
Ballard Estate,
Bombay : 400 038.
Bench Officer, Company Law Board
Southern Region Bench,
Amindivi, Shastri Bhavan, ‘A’ Wing,
5th floor, Block 8 No.26,
Haddows Road,
Chennai : 600 006.

Bench Officer, Company Law Board,
Eastern Region Bench,
9, Old Post Office Street, 6th Floor,
Calcutta : 700 001.

Bench Officer, Company Law Board,
Principal Bench at New Delhi
Shastri Bhavan, 5th Floor, ‘A’ Wing,
Dr.Rajendra Prasad Road,
New Delhi : 110 001.
TERRITORIAL JURISDICTION
Madhya Pradesh, Goa, and Union territories
of Dadra Haveli, Daman & Diu.

Tamil Nadu, AndhraPradesh, Kerala, Karnataka and Union Territories of Amindivi, Minicoy and Lakshadweep Islands and Pondicherry

West Bengal, Orissa, Bihar, Assam, Tripura, Manipur, Nagaland, Meghalaya, Arunachal Pradesh and Mizoram.

Jammu & Kashmir, Punjab, Himachal
Pradesh, Rajasthan, Haryana and Union territories of Chandigarh, Delhi,and Uttar Pradesh.
.