K.M. Abdulla Vs Kerala Chamber of Commerce & Industry (NCLAT Chennai)
NCLAT Dismisses Deposit Claim Because Money Was Credited to a Separate Entity; NCLAT Rejects Section 73 Petition Because Deposit Was Not Shown in Company’s Accounts; NCLAT Upholds Rejection of Deposit Claim Because Burden of Proof Was Not Discharged; Appeal Becomes Infructuous Because Respondent Entered CIRP.
The appeal was filed before the National Company Law Appellate Tribunal (NCLAT) under Section 421 of the Companies Act, 2013, challenging the order of the National Company Law Tribunal (NCLT), Kochi Bench, which had dismissed the appellant’s company petition filed under Section 73(4) of the Companies Act, 2013.
According to the appellant, the respondent company, along with another company, had promoted a special purpose vehicle for constructing the Kerala Trade Centre. The respondent, allegedly facing financial difficulties, requested the appellant to deposit money while offering interest at the rate of 18%. When the appellant sought repayment of the amount along with interest, the respondent refused, contending that the money had been paid towards booking space in the Kerala Trade Centre and referring to a declaration made under the Companies (Acceptance of Deposit) Rules, 2014.
The NCLT dismissed the petition, holding that the amount had been advanced for the Kerala Trade Centre, which was a separate entity, and not to the respondent company. Consequently, the amount could not be treated as a deposit received by the respondent under Section 73(4) of the Companies Act. However, the Tribunal left it open to the appellant to pursue any other remedy available in law against the Kerala Trade Centre.
