The Hindu : Court helps him retrieve deposit

Online edition of India's National Newspaper
Wednesday, Apr 23, 2003

Other States

Other States - New Delhi

Court helps him retrieve deposit

By Mandira Nayar

NEW DELHI APRIL 22. Kasturi Jain probably never thought that he would be spending time in court after he had retired. Well past his 80th birthday, he spent five long years to get back his own money. An investment he was sure not to lose, this was the toughest battle he had to fight. Having invested Rs. 1,20,000 in 15 per cent non-convertible secured redeemable debentures of J.K Synthetics, he never imagined that he would have to drag the company to court to keep its word.

He first approached a district consumer court in 1999, but the case was dismissed as the company submitted that it was registered under the Board of Industrial and Financial Reconstruction and assets could not be disposed of to make payments. But a recent ruling by Karnataka court cleared the way for him to try his legal option again.

A New Delhi Consumer Court held J.K Synthetics guilty of deficiency in service and stated that the company was liable for the same. It further directed J.K Synthetics to pay the redemption amount, in respect of fixed deposit rate, to Mr. Jain at an agreed rate of interest from the effective date of redemption till realisation. A 12 per cent interest on the delayed period from the next day of redemption till realisation was also to be paid.

After going through all the evidence, a bench presided over by L.C Jain of the New Delhi Consumer Court, claimed that the statement made by J.K Synthetics is not tenable in light of the recent judgment delivered by the Karnataka High Court.

Citing the order, the bench stated that a deposit in the sick company is not a sum lent to the company but a sum held in trust by the company till the time of maturity. Therefore, any claim made for return of a deposit with the company cannot be termed as a suit for recovery and under section 22(I) of the Sick Industrial Companies (Special Provisions) Act 1985, the protection is not available to the sick company against fixed deposits. It further stated that in not paying the money, the company has committed deficiency in service and directed J.K Synthetics to pay the amount at an agreed rate of interest from the effective date of redemption till the redemption date. A further 12 per cent interest was to be paid for the delayed period along with Rs. 1,000 as cost of litigation.

Printer friendly page
Send this article to Friends by E-Mail

Other States

Stories in this Section

Markets to get a facelift

Green drive marks Earth Day

Court helps him retrieve deposit