Amended and updated notes on section 74 of Companies Act 2013. Detail discussion on provisions and rules related to repayment of deposits, etc., accepted before commencement of this Act.
Chapter V (Sections 73–76A) of the Companies Act, 2013 (CA 2013) deals with the provisions related to acceptance of deposits by companies. Section 74 of CA 2013 provides for repayment of deposits, etc., accepted before commencement of this Act.
Recently, we have discussed in detail section 73 (Prohibition on acceptance of deposits from public) of CA 2013. Today, we learn the provisions of section 74 of Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
Section 74 of the Companies Act, 2013 has been notified by the Ministry of Corporate Affairs (MCA) vide Notification No. S.O. 902(E) issued dated 27.03.2014. This notification was come into force from 1st April, 2014 i.e. the commencement date of section 74 is 1-04-2014.
| Name of Act | The Companies Act 2013 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Ministry of Corporate Affairs (MCA) |
| Number of Chapters | 29 |
| Number of Sections | 484 (470-43+57) |
| Number of Schedules | 7 |
| You are reading: | |
| Chapter No. | V |
| Chapter Name | Acceptance of deposits by Companies |
| Section No. | 74 |
| Section Name | Repayment of deposits, etc., accepted before commencement of this Act |
| Monthly Updated Edition | Company Law PDF |
Section 74 of Companies Act 2013: Repayment of deposits, etc., accepted before commencement of this Act
Sub-section (1) of section 74 shall come into force on 1st April, 2014 vide Notification No. S.O. 902(E) issued dated 27.03.2014 and sub-sections (2) and (3) of section 74 shall come into force on 6th June, 2014 vide Notification No. S.O. 1459(E) issued dated 06.06.2014.
(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 three years from such commencement or on or before expiry of the period for which the deposits were accepted, whichever is earlier:
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 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 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.