ICDS Ltd,having reputation of serving people for more than three decades was showing satisfactory performance till the end of 1997.Consequent to the issuance of stringent regulatory guidelines by the Reserve Bank of India (RBI), the Company was required to refund almost entire deposits within a short period which was next to impossible for any financial Company.

The subsequent development of downgrading the credit rating by the Credit Rating Agency further complicated the situation.The Company was forced to a situation of committing default as a result of run due to failure of a couple of NBFCs operating in the area.Till 15th July, 2002 the Company was able to meet the commitment of not only repaying the matured deposits but also substantial number of premature deposits hoping the situation will improve.When breaking point reached in the first week of July, 2002, the Company’s Management decided to approach Hon’ble High Court of Karnataka with a Scheme of Arrangement as it apprehended that it will be forced to default.At that time RBI prohibited the Company from accepting and renewing of Public Deposits and also directed the Company not to sell, transfer, create charge or mortgage any of its assets.Later in October, 2002, RBI has cancelled the NBFC Registration issued to the Company thus stopping the Company from carrying on business of non-banking finance.

Accordingly, the Company approached the Hon’ble High Court of Karnataka with a Scheme of Arrangement under which all the Depositors, Debentureholders and Debt holders would receive their dues in a structured manner as mentioned in the Scheme.Inresponse,theHon’ble High Court has directed the Company to hold meetings of all classes of creditors in the month of October, 2002. Subsequently,the Scheme was passed by all classes of creditors in their respective meetings with requisite majority.On 15th October, 2004,after a series of hearings, the Hon’ble High Court of Karnataka has sanctioned the Scheme with minor modifications.The Scheme has come into effect from 30th December, 2004.The schedule of repayment of installments as per the sanctioned Scheme is given below:

Repayment Schedule as per approved Scheme of Arrangement:


Face value of Investment Certificate Rs. Payable within 6 months Payable from 7th month to 18th month Payable from 19th month to 30th month Payable from 31st month to 42nd month Payable from 43rd month to 54th month Payable from 55th month to 66th month
Less than 10,000 100% with interest accrued till 15-7-2002
10,000 to 19,500 20% 40% 40% interest accrued till 15-7-2002
20,000 and above 20% 20% 20% 20% 20% interest accrued till 15-7-2002

In terms of the above Schedule, the Company has promptly repaid all the 6th instalments of public liabilities.

Present Status of the Scheme:

The Final installment payable under the Scheme of Arrangement was on 30th June, 2010. In spite of sending letters, reminders to various investors, 5,123 investors have not surrendered the original certificates of investments to take back their investment and interest. Further some of the investors have not either presented the cheque issued in their favour in settlement of their dues or the instruments were lost in transit. The aggregate amount of investments still lying with the Company is Rs.293 Lakhs. In addition, interest payable to the investors as per the Scheme of Arrangement upto 15th July 2002 amounting to Rs.198 Lakhs has not yet been claimed by the investors as they are required to claim by producing original investment certificates. Arrangements are in place to pay the claims received from investors as and when the original investment certificates lodged by such investors.

Transfer of Unclaimed Public Liabilities to Investors Education & Protection Fund (IEPF) formed by the Govt. of India, u/s 205 (C) of the Companies Act, 1956.

The public liabilities which were not claimed by the investors as on 31st March, 2016 pertaining to Installment of category 4 of the Scheme, ie. Face value of investment of Rs 10000 and above and less than Rs.20,000 was Rs.Nil. However unclaimed/unencashedcheques amounting to Rs.84,65,735/- remaining unpaid has been remitted to IEPF.

The Company has sent individual letters to all the investors to claim their investment/interest by tendering the original certificates failing which the company will be compelled to remit the same to IEPF by 31st July, 2017.

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