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MCA Circular 30/3/15- repayment of deposits u/s 74 waived?

Shree , Last updated: 01 April 2015  
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MCA has issued a Clarification vide General Circular No. O5/2O15 dated 30th March, 2015, regarding applicability of Companies (Acceptance of Deposits) Rules, 2014 to amounts received by Private Limited Companies from their members, directors or their relatives before 1st April, 2014.

This was one of the contentious provisions since its introduction.  As per the Circular, such amounts received by private companies prior to 1st  April, 2014 shall not be treated as 'deposits' under the Companies Act,2013 and Companies (Acceptance of Deposits) Rules, 2014. However, this is subject to the condition that the private company who has received such amounts shall disclose the following in the notes to its financial statement for the FY commencing on or after 1st April, 2014 

- Figures of such amounts  i.e. the details of the amounts and 

- the accounting head under which such amounts have been shown in the financial statement

Further, it states that any renewal or acceptance of fresh deposits on or after 1st April, 2014 will be in accordance with the provisions of the Companies Act, 2013 and Rules.

To read the circular click on 

http://www.mca.gov.in/Ministry/pdf/General_Circular_5-2015.pdf 

It is interesting to note, section 74 of the Companies Act, 2013 states that in case any deposit is accepted by a Company before the commencement of this act i.e. before 1st April, 2014 and the the deposit in part or in full or interest is outstanding as on 1st April, 2014 or is due after 1st April, 2014 , then the Company will have to

- file a return in DPT 4 within 3 months of 1st April, 2014  i.e by 30th June, 2014 and

- repay within 1 year i.e by 31st March, 2014 or the due date the amount that is due, whichever is earlier.

Now, if we analyse the MCA circular, it clarifies that the amounts received by the Companies on or before 1st April, 2014 shall not be treated as deposits and the provisions of the act and rules do not apply.  The provisions of section 74 are applicable wrt deposits. As it is clarified that the amounts shall not be treated as deposits, there is a room for interpretation and we may conclude that the provisions of section 74 are not applicable and the hardship caused on Companies to repay the amounts before 31st March, 2014 is removed.


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Shree
(Director)
Category Corporate Law   Report

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