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2021 (12) TMI 487 - HC - Companies LawDisqualification of the petitioners as Directors - Section 164(2)(b) of the Companies Act, 2013 - HELD THAT:- As per Section 74(1)(b) of the Act, the Company shall repay, within three years from the commencement of the Act or on or before expiry of the period for which the deposits were accepted, whichever is earlier. The said provision has to be read in context and in conjunction with Section 74(2), which clearly provides that the Tribunal may, on an application made by the Company, after considering the financial condition of the Company, the amount of deposit or part thereof and the interest payable thereon and such other matters, allow further time as considered reasonable to the Company to repay the deposit. In the event of renewal in compliance with the said sub-section, it could not be said that the Company or, for that matter the petitioners, were guilty of any offence within the ambit of Section 164(2)(b) of the Act. The term "deposits", as defined in Section 2(31) of the Act, envisages the same to include any receipt of money by way of deposit or loan or in any other form by a Company, but does not include such categories of amount as may be prescribed in consultation with the Reserve Bank of India - Sections 73 and 74 of the Act, on the other hand, prohibit acceptance of deposits from the public. Section 74, read in conjunction with Section 73, would have included the money taken by the Company unless, as discussed above, the exemptions were applicable to the withdrawals. In view of the exemption under the 1975 Rules, more specifically Rules 2(b)(ix) and (xi) of the same, no liability within the contemplation of Sections 164 and 167 could have been imposed on the Company and/or the petitioners - the disqualifications envisaged under Section 164 and Section 167 of the Act were not applicable to the petitioners and, as such, the decision disqualifying the petitioners' DIN and the consequential vacation of office were illegal and bad in the eye of law. Petition allowed.
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