HBN Dairies and Allied Ltd wants to allay the fear of partners who are associated with the company as part of Joint venture with the company and the individual. The company wants to set aside any rumour regarding its repayment to its joint venture partners. The company is committed to every investor/ joint venture partner to repay his/her investments with additional interest arrears. The company ensures to associated partners that their investment is in the safe hand. After the SEBI’s order dated 12th of July, 2013, the company has repayed over 240 crores to its partners. The company is complying with the SEBI’s order in letter and spirit and it is updating all developments to SEBI on regular basis. The Company has also stopped taking investments after SEBI’s order. And have started the process of payment as per SEBI’s order. The company again reiterates its commitment of repaying the investment with additional interest to its Joint Venture partners. The company is having around 2500 crores of assets in India which are declared with market regulator SEBI as well and this is more than sufficient to meet its liabilities.

The Model on which the company HBN Dairies & Allied Limited was working

  1. Incorporation of the company: The Company HBN Dairies & Allied Limited was incorporated and registered under the Companies Act, 1956, dated 29.12.1998 having its Registered Office at 303, Vardhman Chamber, IIIrd Floor, Sonia Complex, Vikas Puri, New Delhi - 110018. The Company received its Certificate of Commencement of Business pursuant to Section 149(3) of the Companies Act, 1956 dated 22.01.1999 from the Registrar of Companies, N.C.T. of Delhi & Haryana.

  2. Background of Investment Model: The Company was engaged into the activities of dairy, farming, manufacturing, trading and processing of dairy products and other food items.

The company was entering into the concept of Joint Venture with the public as per plans mentioned in the Rule Book which offered various schemes that a Joint Venture holder could avail as per his/her requirements at the profit which varied between 9-10% per year. The company entered into the Joint Venture Agreement at the time of acceptance of such amount from the proposed Joint Venture holders. The amount so raised through such schemes were exclusively utilized for the purpose of manufacturing, marketing and trading of the products of the company. The Company has not been carrying out the business activities of Banking Company i.e. to accept money deposits from the public.


This can be explained with reference to Section 5(c) of Banking Regulation Act, 1949 which states that, "Banking Company" means any company which transacts the business of Banking in India. An explanation to this definition states that, "any company which is engaged in the manufacture of goods or carries on any trade and which accepts deposits of money from the public merely for the purpose of financing its business as such manufacturer or trader shall not be deemed to transact the business of banking within the meaning of this clause. Hence, it clearly estates that HBN Dairies & Allied Limited which accepts deposits from public to finance its business of dairy farming and dairy products is not covered under the Banking Regulation Act, 1949 and cannot be termed as a banking company.

Also, the company is not to be governed under Section 2 (c) of Chit Funds Act, 1982, as the section states that, "Chit Agreement" means document containing the articles of agreement between the foreman and the subscribers relating to the chit. The Company HBN Dairies & Allied Limited is not carrying out the business activities of chit fund as there is no such agreement i.e. "Chit Agreement" as per section 2(c) of the Chit Funds Act, 1982 issued by the company to the public against the money deposits accepted from them. Rather the company issues a "Certificate" against the money deposits accepted from the public mentioning the details of the deposits made by them as per the plan availed out of various plans of the company mentioned in the "Rule Book".

  1. Refund of the money: The company has refunded Rs. 240 Crores of maturity amount to the investors in different branches after SEBI’s order and the repayment of maturity is still in the process.

  2. No illegal Act: It is submitted that the Company has not done any illegal act nor ever thought of criminal breach of trust. DELAY OF MATURITY is not an act of criminality, although we agree that the maturity payment has been delayed. Now we have stopped accepting any amount and are trying to generate funds from other sources including sale/ mortgaging our assets, also by publishing an advertisement in newspaper as well for sale of property. The company has honest intentions and stands committed towards its promises and commitments. We have no intention to defraud our investors or Joint Venturers right from day one and have not done any kind of cheating and criminal breach of trust at any stage. The company will return each and every penny of the public with an additional interest (8.75%) over and above the maturity amount.