General Circular No. 09/2015

No. 1/8/2013-CL-V

Government of India

Ministry of Corporate Affairs

5th Floor, A Wing, Shastri Bhavan,

 Dr R.P. Road, New Delhi

Dated: 18th June, 2015

To

All Regional Directors,

All Registrars of Companies,

All Stakeholders.

Subject: Clarification on repayment of deposits accepted by the companies before the commencement of the Companies Act, 2013 under section 74 of the said Act

This Ministry has received representations seeking clarification regarding processing of the deposits related complaints received from investors under section 74 of the Companies Act, 2013 (the said Act) in respect of defaults made by  companies  in  repayment  of  deposits  accepted  by  them  before  the commencement  of the  said  Act  i.e.  before 1st  April, 2014 and  filing of prosecutions   against   defaulting   companies   by   the   Registrars   of Companies/ Regional Directors.

2.  The matter has been examined in the Ministry and it is clarified that vide Removal of Difficulties (Second) Order [S.O. 1428 (E)] dated 2nd  June,  2014 and Removal of Difficulties (Fourth) Order [S.O.  1460(E)] dated 6th  June, 2014, the Company Law Board has been empowered to exercise the powers of National Company Law Tribunal under sub-section (4) of section 73 and sub section (2) of section 74 of the said Act, till the latter’s constitution.  Thus, a depositor is free to file an application under section 73(4) of the said Act, with the Company Law Board if the company fails to make repayment of deposits accepted by it. Further the company may also file application under section 74(2) of the said Act with the Company Law Board seeking extension of time in making the repayment of deposits accepted by it before the commencement of the provisions of the said Act .

3. Further, attention is also drawn to Explanation appearing below Rule 19 of the Companies (Acceptance of Deposits) Rules, 2014 which clarifies the conditions subject to which a company would be deemed to have complied with the requirements laid down in Section 74(1)(b) of the Companies Act, 2013. Companies can repay deposits accepted prior to 1st  April, 2014 in accordance with terms and conditions for which the deposits had been accepted.

4. It is also clarified that there is no bar on the Registrar of Companies for filing of prosecution against a company if such company fails to make repayment of deposits accepted by it under the provisions of the Companies Act, 1956 or Companies Act, 2013, subject to the contents of para 3 above.

This issues with the approval of the competent authority.

Yours faithfully

(KMS Narayanan)

Assistant Director (Policy)

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Posted Under

Category : Company Law (3467)
Type : Circulars (7539) Notifications/Circulars (30595)

0 responses to “Registrar of Companies can file prosecution against Companies defaulting in Payment of Deposits”

  1. Jayant Satpute says:

    Dear Sir,
    In connection with your above clarification I would like to ask one question.
    IF any company has taken deposit from the investor in the name of company director & issued the receipt which shows sale of shares of his company.Now the director is refusing to pay back the money-principal or interest-whether in such case company law board can take any action against such company’s? What & where the investor is supposed to make complaint in such case? Pl.advice.We are from Pune,Maharashtra.

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