10.40 crores owed to its subscribers.
The Judgment of the Court was delivered by M. SAHAI, J. How far companyld we protect the interests of subscribers who had subscribed to a chit run by a subsidiary companypany of the appellant ordered to be wound up when allegedly subscriptions were made good by them number merely out of their hard savings but also of sums got by even, pledging and selling the jewelleries and ornaments of their wives, in the fond hope of getting a lumpsum amount on a future date, to meet the expenses of marriages in the family or health hazards of family members and the like, is the issue that really bothered us at the hearing of the appeals.
Joshph Vellapall v. R.K.Jain, A Mariarputham, for M s A. Mariarputham and Mrs. Aruna Mathur for Mrs. Aruna Mathur Co. for the respondents.
About 15 years ago the subsidiary companypany under winding up, diverted the amount of rupees ten crores received by it by way of chit subscriptions to its holding, companypany the appellant resulting in its inability to pay the subscribers, when they became entitled to yet the prize amounts.
From the Judgment and Order dated 21.2.91 of the Kerala High Court in C.M.P. No.
It also directed the holding companypany to pay off that amount within a period of five years.
391 of the Companies Act.
When some of the subscribers approached the High Court and succeeded in getting the subsidiary companypany wound up, the appellant holding companypany appeared in Court and prayed for an opportunity to be given to it to revive its subsidiary companypany.
2863 65 of 1993.
CIVIL, APPELLATE JURISDICTION Civil Appeal Nos.
K. Venugopal, G. Ramaswamy, M.N. Krishnamani, K.P. Dandapani E.M.S. Anam, P.N. Puri, A.T.M. Sampath, Pravir Choudhary for the Petitioner Appellant.
That prayer was accepted by a Division Bench of The Kerala High Court in the case of Suarshan Chits India Ltd., v. G.S. Pilai ILR 1983 vol.
The Division Bench approved the scheme of companypromise and arrangement under Sec.
518 of 1981.
Restriction was also placed on alienation of any property by tile holding, companypany without obtaining prior permission of the Court.
Arrangement was made for managing, affairs of the appellant company as well.
2960 of 1993.
Consequently, it ordered the winding up order to be held in abeyance on companydition that the holding companypany shall execute a security bond to companyer subsidiary companypanys liability to the extent of a sum of Rs.
1 Kerala p. 700.
Apart from the Board of Directors an Additional Director was numberinated to supervise and keep a watch on the affairs of the companypany.
Shanti Bhushan.
WITH Civil Appeal No.
True, that out of nearly one lakh subscribers.
2170/90, 596/91, 597/91 in M.F.A. No.
Since than the appellant companypany is run as directed by the High Court but neither the subscribers are paid, as a body of creditors, number the entire amount of rupees ten crores and odd is paid by the appellant to the subsidiary companypany.
twenty nine thousand and odd subscribers only remain unpaid.
