Amended and updated notes on section 75 of Companies Act 2013. Detail discussion on provisions and rules related to damages for fraud.
Chapter V (Sections 73–76A) of the Companies Act, 2013 (CA 2013) deals with the provisions related to acceptance of deposits by companies. Section 75 of CA 2013 provides for damages for fraud.
Recently, we have discussed in detail section 74 (Repayment of deposits, etc., accepted before commencement of this Act) of CA 2013. Today, we learn the provisions of section 75 of Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
Section 75 of the Companies Act, 2013 has been notified by the Ministry of Corporate Affairs (MCA) vide Notification No. S.O. 1934(E) issued dated 01.06.2016. This notification was come into force from 1st June, 2016 i.e. the commencement date of section 75 is 1-6-2016.
| 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. | 75 |
| Section Name | Damages for fraud |
| Monthly Updated Edition | Company Law PDF |
Section 75 of Companies Act 2013: Damages for fraud
Section 75 shall come into force on 1st June, 2016 vide Notification No. S.O. 1934(E) issued dated 01.06.2016.
(1) Where a company fails to repay the deposit or part thereof or any interest thereon referred to in section 74 within the time specified in sub-section (1) of that section or such further time as may be allowed by the Tribunal under sub-section (2) of that section, and it is proved that the deposits had been accepted with intent to defraud the depositors or for any fraudulent purpose, every officer of the company who was responsible for the acceptance of such deposit shall, without prejudice to the provisions contained in subsection (3) of that section and liability under section 447, be personally responsible, without any limitation of liability, for all or any of the losses or damages that may have been incurred by the depositors.
(2) Any suit, proceedings or other action may be taken by any person, group of persons or any association of persons who had incurred any loss as a result of the failure of the company to repay the deposits or part thereof or any interest thereon.