Dear professional colleagues,
Firstly I wish to thank Mr. Anmol Jha for bringing out this controversial topic to enlighten the professionals. I am herewith posting my understandings and comments, for which I require my professional friends to comment and educate me upon the same.
A serious step has to be taken in respect of the provisions contained in Sec. 74 of Companies Act, 2013 (hereinafter referred to as the “Act” for the sake of brevity).
On a plain reading of the said section it does not make any distinction between a private company and a public company. Accordingly inference can be drawn that the provisions laid down u/s 74 of the Act are applicable to private companies also, which has accepted deposits from its directors.
Sec. 74 of the Act speaks specifically about the deposits accepted prior to the commencement of 2013 Act. Therefore, according to me, even though there was an exception provided under Rule 2(b) of Companies (Acceptance of Deposits) Rules, 1975 insofar as the deposits received by a private company from its directors or their relatives.
Accordingly it is pertinent to note that that this particular Sec. 74 is brought into force and is introduced to overcome the said exception as was provided in the earlier 1975 Rules. It is important here to mention that the term “Deposit” was not specified in the old Act, but has been given a place under the provisions of Sec. 2(31) of the new Act.
Main crux of Sec. 74(1)(b) has to be analyzed since it makes a company (without making any distinction between a public and private company) liable to repay the deposits. However this may not be possible for the major reason of non-availability of funds with the company.
Further, the section is very apt and clear insofar as filing of Form DPT – 4 before the ROC and repayment of such outstanding deposits within one year from such commencement or from the date on which such payments are due whichever is earlier.
At this juncture attention is drawn to the article posted by Mr. Anmol Jha on 11.02.2015 that there is no obligation for a private company to comply with the provisions of Sec. 74 of the Act for repayment of deposits to the directors read with Rule 2(b) of Companies (Acceptance of Deposits) Rules, 1975.
However Rule 16 of Companies (Acceptance of Deposits Rules), 2014 specifies the “Return of Deposits to be filed with the Registrar”. According to the said Rule, – “Every company to which these rules apply, shall on or before the 30th day of June, of every year, file with the Registrar, a return in Form DPT – 3 along with the fees as provided ……… as on the 31st day of March of that year duly audited by the auditor of the company.”
Now, attention is drawn to Form DPT – 3 as envisaged under Rule 16 of Companies (Acceptance of Deposits Rules), 2014 and accordingly the monies/ deposits which remains unpaid due to lack of funds or for any other reason(s), a Return of Deposits in the prescribed Form DPT – 3 may be filed before the ROC within the due date prescribed as mentioned above to overcome the default of the provisions of Sec. 74.
Tags Corporate Law