The Hindu Business Line : Madras HC orders fresh probe into Maxima

THE Madras High Court has ordered a thorough investigation into the affairs of the Chennai-based Maxima Investments and Finance, following allegations of suppression of facts and presentation of false statements.

Maxima Investments was floated in 1993 as a partnership firm with the purpose of mobilising deposits from the public at higher interest rates.

A Division Bench, comprising Mr Justice N. Dhinakar and Mr Justice D. Murugesan, while ordering the investigation, held that the managing partner was not entitled for immunity from facing criminal charges registered under Sections 120B, 409, 420 and 506 (II) of the IPC before the Additional Chief Metropolitan Magistrate, Egmore, Chennai.

Accordingly, the relevant scheme formulated by the High Court to repay the moneys due to the depositors by disposing of the movable and immovable properties belonging to the firm, was being lifted.

According to the report submitted to the court by the Administrator appointed to take over and manage the affairs of the firm, the partnership firm had as partners Mr N.S.T. Madhan and Ms Lavina Madhan. The firm had collected huge amounts from the public as deposits. As the amounts were not returned in time, a complaint came to be registered at the instance of one Premkumar in X-Crime No 970 of 1996.

Thereafter, a writ petition was filed by the first respondent with a prayer to frame a scheme for scrutinising the accounts of the firm and to sell the property of the firm.

The first respondent, the Administrator said, had said that he was in possession of properties as listed in the writ petition. The total value of the assets in his possession was Rs 17,58,00,000, against which the liability was only Rs 14,35,56,181.

On the basis of these averments, this court was led to believe that if the above properties were sold, the amounts could be realised and refund of deposits could be effected to all the depositors. On the basis of the submission, the court framed a scheme to sell the properties and adjudicate the claims of the depositors.

The court also ordered that all civil, criminal and insolvency proceedings pending on date against the group and partners shall be suspended till the scheme was implemented and completed.

The Bench said that the materials placed before it showed that the petitioner in the writ petition had not disclosed all the relevant materials in the affidavit. The writ petitioner not only suppressed several material facts, but also came out with false statements and obtained a scheme by an order of this court and thereby obtained suspension of all proceedings pending before the civil, criminal and insolvency courts against the group and partners.

The writ petitioner did not also assist the Administrator as directed by this court in terms of the scheme, and therefore, the Administrator could not function effectively.

The result was that the petitioner had obtained immunity from all proceedings, but the depositors had yet to get any relief.

"We are therefore of the view that a thorough investigation is required in the matter,'' the Bench said, and directed further investigation by a competent officer, who would be not below the rank of a Superintendent of Police, nominated by the Inspector General of Police, Economic Offences Wing, Chennai. The said officer would investigate the case thoroughly and file the final report as expeditiously as possible. The IG of Police would nominate the officer to conduct investigation within 2 weeks. The other portions of the scheme shall continue for the present.

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