Section 74Chapter 5

Repayment of deposits, etc., accepted before commencement of this Act

(1)

Where in respect of any deposit accepted by a company before the commencement of this Act, the amount of such deposit or part thereof or any interest due thereon remains unpaid on such commencement or becomes due at any time thereafter, the company shall—

(a)

file, within a period of three months from such commencement or from the date on which such payments, are due, with the Registrar a statement of all the deposits accepted by the company and sums remaining unpaid on such amount with the interest payable thereon along with the arrangements made for such repayment, notwithstanding anything contained in any other law for the time being in force or under the terms and conditions subject to which the deposit was accepted or any scheme framed under any law; and

(b)

repay within one year from such commencement or from the date on which such payments are due, whichever is earlier.

(b)

repay within three years from such commencement or on or before expiry of the period for which the deposits were accepted, whichever is earlier:

Proviso

Provided that renewal of any such deposits shall be done in accordance with the provisions of Chapter V and the rules made thereunder.

(2)

The Tribunal is setup and notified, may on an application made by the company, after considering the financial condition of the company, the amount of deposit or part thereof and the interest payable thereon and such other matters, allow further time as considered reasonable to the company to repay the deposit.

(3)

If a company fails to repay the deposit or part thereof or any interest thereon within the time specified in sub-section (1) or such further time as may be allowed by the Tribunal under sub-section (2), the company shall, in addition to the payment of the amount of deposit or part thereof and the interest due, be punishable with fine which shall not be less than one crore rupees but which may extend to ten crore rupees and every officerofficer of the company who is in default shall be punishable with imprisonment which may extend to seven years or with fine which shall not be less than twenty-five lakh rupees but which may extend to two crore rupees, or with both. (Effective from 06-06-2014)

Notes, amendments & references (8)

It is clarified by MCA that any amount received by a private company from its members, directors or their relatives prior to 01 April 2014 shall not be treated as ‘deposit’. However, any renewal or acceptance of such amount from said parties by a private company on or after 01 April 2014 shall be treated as ‘deposit’ vide Circular no. 05/2015 dated 30 March 2015. To view the clarification, Click Here

Company means a company incorporated under this Act or under any previous company law

Deposit includes any receipt of money by way of deposit or loan or in any other form by a company, but does not include such categories of amount as may be prescribed in consultation with the Reserve Bank of India

Refer rule 20 of the Companies (Acceptance of Deposits) Rules, 2014. To view the rule, Click Here

Substituted vide Companies (Amendment) Act, 2017 dated 03.01.2018, w.e.f., 15.08.2018. To view the notification, Click Here

CLB to exercise powers until NCLT vide order S.O. 1460(E). To view the order, Click Here

Refer Rule 73 National Company law Tribunal Rules 2016.To view the rule, Click Here

“ Tribunal ” means the National Company Law Tribunal constituted under section 408