Recovering Money from Birla Power
I had invested Rs1 lakh as fixed deposit in Birla Power on 19 October 2010. The company has not paid any interest for over one and a half years. Now, the FD has matured. However, there is no response from the company about redemption. The Company Law Board (CLB), Delhi, has rejected my application saying “It is not a fixed deposit and does not fall under its purview.” How can I recover my money?
LRC’s Reply: You may appeal to the Delhi Bench of CLB by showing the recent order issued by the Mumbai Bench of CLB in the matter of Birla Power Solution: http://tinyurl.com/kexbypl
The order of the Mumbai Bench of CLB clearly mentions that company FDs come under their jurisdiction; it has the powers to direct a company to pay corporate fixed deposit-holders and has passed many orders under Section 58A (9) of Companies Act, 1956. You can also file a case against the company with the CLB under Section 58A (9) of Companies Act, 1956, or under Section 45QA of the RBI Act, 1934. You need to fill up Form No 4 of CLB regulations and submit it with a demand draft of Rs50 to nearest CLB Bench.
Corporate fixed deposits are unsecured, which means they are unsafe compared to deposits with government banks or secured bonds. It is a risk that you took. If the company has no money, other creditors and the tax department get priority over fixed deposit-holders. Moneylife Foundation, at every seminar, warns people against investing in fixed deposits that are not AAA-rated.
Managing Committee Member Misusing Parking Space
The managing committee (MC) of our cooperative housing society (CHS) allotted open parking space through lots. I did not get a parking space. However, one MC member is not parking her vehicle in her allotted space. She is parking her vehicle in a stilt parking of another member. Another member of the MC, who was not allotted open parking space, is parking his vehicle in the space that was allotted to the lady. When I protested, the MC told me that it has passed a resolution to allow members to exchange their parking space with each other. I am based in Mumbai. Kindly help me.
LRC’s Reply: In your case, the following two Sections of the model byelaws for CHS in Maharashtra are applicable.
1. Section 79 (b): It says that allotment of parking slots is to be made by the managing committee and, once the parking space is allotted, a member cannot transfer that space to anybody.
You can file a complaint to the secretary of your CHS about violation of parking space as the member is not parking her vehicle in the space allotted. Send a reminder after 15 days. Send a second reminder after the next 15 days with a CC to the deputy registrar. Then file a complaint before the deputy registrar about violation of byelaws.
2. Section 83: In case the number of vehicles of eligible members is in excess, the managing committee shall allot the available parking space by ‘lot’ on a yearly basis.
In this case, you will have to wait for the next year’s allotment.
In addition, under Section 32 of the Maharashtra Cooperative Societies Act, 1960, you can ask the MC to show you the books like the minutes of the MC’s meeting in which the decision of not intervening and allowing exchange was taken (Note: the MC has no authority to change/modify any byelaw and the final authority for such decisions rests with the general body meeting only). If the MC refuses to show the books, you can file an application before the deputy registrar asking for the copy of the minutes of MC’s meeting.
However, we would suggest you try to resolve the issue through discussion only, as filing complaints requires time and may result in unnecessary bitterness between neighbours.
Have a legal question? Try our Moneylife Foundation’s Legal Resource Centre. Check out http://lrc.moneylife.in and register at http://moneylife.in/lrc.html
A concession on payment of stamp duty in cases of immoveable properties being settled among family members cannot be claimed, if the settlement is made in favour of great-grandchildren, the Madras High Court Bench has ruled.
Justice R Sudhakar and Justice VM Velumani held that the definition of the term ‘family’, in the Indian Stamp Act 1899, must be considered as ‘exhaustive’ and not ‘illustrative’. Amendments made by the state government (to the Central enactment) defined the term ‘family members’ to mean father, mother, husband, wife, son, daughter, grandchild, brother, sister, adoptive father, adoptive mother, adopted son and adopted daughter.
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