TMI Blog2021 (3) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... he term Deposit . To put it succinctly, under the new Companies Act, 2013, the definition of the term Deposit is of wider amplitude. In the present case, this Tribunal could not find any evidence the Company filed application before the Registrar of Companies regarding any statement of the deposits accepted by the company and sums remaining unpaid on such amount with the interest payable thereon along with the arrangements made for such repayment. It is evident from the receipt No. 140 issued by the Respondent No.1 Company to the petitioner on 23.05.2012 that the petitioner issued a cheque (No. 118356) of ₹ 2,45,000 towards deposit/Loan. The Respondent did not submit any evidence of Board Resolution with regard to the collection of money - As far as the natural justice is concerned, it is true that the Company retained the Deposit amounts for its business purposes which was otherwise to be paid to the depositors on the due date of maturity (in the present petition no due date or interest payable is referred by both the parties) or in other words, the Company has used the money of the public for number of years for its business purposes. Therefore, it is an accepted co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Company treating the same unilaterally as Deposit/Loan with an assurance that the shares would be issued soon to the Petitioner. 3. The learned counsel for the Petitioner submitted that the petitioner was neither issued any shares against the said payment of ₹ 2,45,000/- nor did the Respondent pay any interest accrued. The petitioner by notice dated 01.03.2017 demanded for return of the deposit with the 12% interest, quarterly compounded from the date of receipt of money within a period of 15 days. However, the Respondent Company did not respond to the said notice. Therefore, this Company Petition has been filed for refund of the deposit received by the company due to the negligence of the Board of the Respondent- Company either in making the payment or giving any reply at all to the demand of the Petitioner. 4. The learned counsel further submitted that the Petitioner made several complaints to the Registrar of Companies, Kerala. When the 2nd Respondent -Registrar of Companies sought a reply from the Respondent -Company, the present Managing Director Sri. K.G. Suresh Kumar replied that the Management of the Company was under the control of Mr. Thomas J. Kappan and tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is bound to maintain the register of deposits of all the amounts received upon such amounts attaining the status of deemed deposit' under the Companies Act, 1956 read with Rule 10 of the Companies (Acceptance of Deposits) Rules, 1975. Every Company is bound to file as per the said rule a return in the prescribed form regarding the deposits received on or before 30th June of every year before the Registrar of Companies. Only such Companies which filed Return of Deposits as per Rule 10 prior to 01.04.2014 can avail the benefit of the Circular. The Respondent -Company wrongly treated the deposits collected from the Petitioner as unsecured loan from the very beginning even though the amount received assume the character of deemed deposit as per the Companies (Acceptance of Deposits) Rules, 1975. The Respondent -Company has no case that it obtained the required declaration from the Petitioner to treat it as an unsecured loan as per Rule 2(b)(ix) of the Companies (Acceptance of Deposits) Rules, 1975. Submissions by Respondent 1: 8. The Respondent No. 1 stated that he had addressed a letter dated 14.06.2017 acknowledging that the erstwhile Managing Director of the Company ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comments to offer. Findings: 12. Both the sides have been heard at length in the light of the facts, circumstances and provisions of the Companies Act along with the Companies (Acceptance of Deposits) Rules, 2014. Deposits can be accepted by the Companies under Section 73 to Section 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 as amended time to time. For invoking the jurisdiction of the Tribunal as per Section 74(2) under the Companies Act, 2013, even a partial failure by the Company to repay the deposit was sufficient. In fact, Section 2 (31) of the Companies Act speaks of the meaning of deposit. The Tribunal is having vide discretionary powers regarding the repayment of Deposit (s) but it must exercise its discretion objectively taking into consideration all the relevant aspects in a conspectus judicial manner. In reality, the distinction between deposit and loan may not be a relevant factor for interpreting the term Deposit . To put it succinctly, under the new Companies Act, 2013, the definition of the term Deposit is of wider amplitude. 13. The Companies Act, 2013 came up with Chapter V relating to acceptance of depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me as considered reasonable to the company to repay the deposit. (3) If a company fails to repay the deposit or part thereof or any interest thereon within the time specified in sub-section (1) or such further time as may be allowed by the Tribunal under sub-section (2), the company shall, in addition to the payment of the amount of deposit or part thereof and the interest due, be punishable with fine which shall not be less than one crore rupees but which may extend to ten crore rupees and every officer of the company who is in default shall be punishable with imprisonment which may extend to seven years or with fine which shall not be less than twenty-five lakh rupees but which may extend to two crore rupees, or with both. 14. This Tribunal finds that this provision grants one year s time from the date of commencement of the Act or date when the repayment is due, whichever is earlier. It is obvious that all deposits accepted before commencement of the new Act are required to be paid not later than one year from the date of commencement of the Act irrespective of whether such deposits had fallen due for payment or not and whether or not the Company was regular in payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Company further failed to act in the manner provided under Clause 51 of the Articles of Association, which reads:- The Board of Directors may, from time to time, secure the repayment of such money in such manner and upon such terms and conditions in all respects as they think fit and in particular by issue of debentures or bonds of the Company or by mortgage or charge of all or any part of the property of the Company and of its uncalled capital of the time being . 17. When such collection of money is attempted to be regularised by including in the financial statement of the Respondent-Company, all members of the Board of the Respondent-Company are equally liable. 18. In the present case, this Tribunal could not find any evidence the Company filed application before the Registrar of Companies regarding any statement of the deposits accepted by the company and sums remaining unpaid on such amount with the interest payable thereon along with the arrangements made for such repayment. It is evident from the receipt No. 140 issued by the Respondent No.1 Company to the petitioner on 23.05.2012 that the petitioner issued a cheque (No. 118356) of ₹ 2,45,000 towards depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 2013 i.e. Section 42(6) which is in respect of Private Placement that if a Company is making an offer should allot its Securities within 60 days from the date of Application money and if not allotted, shall repay Application Money to the subscribers with 12% annual Interest. Meaning thereby, the Legislature is very much convinced of the fact that if the Share Application money is used by the Company without allotment of Shares of Securities, then such Share Application money shall be treated as if it is a deposit with the Company on which 12% Interest can be earned. The present case also falls within the same category, which is in favour of the Depositor. If this principle is followed, then it is judicially correct to order the grant of Interest @ 12% per annum for the delayed period. 23. Considering the above-mentioned provisions of the Companies Act, 2013, the Companies (Acceptance of Deposits) Rules, 2014 and clauses of Articles of Association of the Company, it appears to this Tribunal that Section 74(1)(b) has been attracted as the Respondent defaulted to repay the deposits and the penal provisions would get attracted. 24. Since the instant petition remained pend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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