Section 74: Repayment of deposits, etc., accepted before commencement of this Act

Companies Act, 2013 · Chapter V: Acceptance Of Deposits By Companies · In force

This section requires companies to repay deposits accepted before the commencement of this Act within a specified timeframe and provides for penalties for non-compliance.

Penalty

(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 officer 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.

The section, clause by clause

What the section says

In plain terms

(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 company must file a statement with the Registrar within 3 months of the commencement of this Act, detailing all unpaid deposits and interest, and repay these deposits within 3 years or by the end of the deposit period, whichever is earlier.

(1)(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 4[(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:

provisoProvided 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 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.

The Tribunal can grant a company more time to repay deposits if it considers the company's financial condition and other factors.

(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 officer 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.

If a company fails to repay deposits on time, it can be fined between 1 crore rupees and 10 crore rupees, and its officers can be imprisoned for up to 7 years or fined between 25 lakh rupees and 2 crore rupees.

The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.

Amendment notes

1. Subs. by Act 1 of 2018, s. 15, for clause (c) (w.e.f. 15-8-2018).
2. Clause (d) omitted by s. 15, ibid. (w.e.f. 15-8-2018).
3. Subs. by s. 15, ibid., for “such deposits;” (w.e.f. 15-8-2018).
4. Subs. by s. 16, ibid., for clause (b) (w.e.f. 15-8-2018).

Referred to by

s. 75 Damages for fraud

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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.