Fixed Deposit

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CS Ankur Srivastava

Company Secretary & Compliance Officer

17858 Points Joined November 2008

Query related to Acceptance of Deposit Rules, 1975

Under Rule,3A

Every Company shall before the 30^th Day of April of each year, deposit or invest as the case may be a sum which shall not be less than 15% of the amount of its deposits maturing during the year ending on 31^st day of march next following...

Query:- what about the deposit if the repayment date is mid April. Because the date of investment is 30 April and if the deposit is matured before that day, is such deposit is to be included for such 15% investment.??

My Opinion:- Every company is required to create an investment, as prescribed, not less than 15 % of the amount of deposit maturing during the year i.e. from 1^st April to 31 March, next following year. Because the rule says “15% of the amount of deposits maturing during the year.”

Contrary View:- If the date of investment as above is on 29^th April and if some Deposits are maturing between 10 to 15 April, they are not included for such 15% investment limit. Because on the date of investment such Deposits are already paid. The intention of Law is to create security for the repayment of deposits but if any Deposit is already matured why such security is to be provided.

Replies (4)

CS Ankur Srivastava

Company Secretary & Compliance Officer

17858 Points Joined November 2008

This matter has already been discussed on this forum between Mr. Ankur Garg and me. But now it is to be discussed in veiw of abovementioned contrary view.

CA Dhiraj Ramchandani

CA M. com

10823 Points Joined November 2008

Hi sir,

A. I consider the Contrary View to be correct and satisfactory.

B. Logically, it is very obvious to not invest for any amount which has been already paid.

C. I mean, let say for example,

If BAD DEBT RESERVE is to be created, then it is on current outstanding debtors. Its never created on the debtors which already paid the amount or the debtors which are already declared as BAD DEBTS

CS Ankur Srivastava

Company Secretary & Compliance Officer

17858 Points Joined November 2008

But when we are talking about law we should be very specific law says as under:-

“15% of the amount of deposits maturing during the year.”

so how can we reduce the amount by saying that it has been already paid, whether it is not amount matuting during the year.

Suman Khurana

ACS

209 Points Joined June 2009

i agree with your opinion. Its better to deposit or invest 15% of the amount of deposits maturing during the year.

Bcoz we are complying with requirement of law.

if we go with contrary view, then objection can be raised for depositing less than 15% of the deposits maturing during the year. Company will not have solid defence for the same.