Clarification on repayment of deposits under section 74 of Companies Act,2013

•       MCA provided Clarification on repayment of deposits under section 74 of Companies Act,2013 accepted by the companies before the commencement of the Act via circular no. 09/2015 dated 18^th June, 2015 and stated vide Removal of Difficulties (Second) Order [S.O. 1428(E)]dated 2nd June, 2014 and Removal of Difficulties (Fourth) Order [S.O. 146O(E)] dated 6^th  June, 2014, the Company Law Board has been empowered to exercise the powers of National Company Law Tribunal under section 73(4) and section 74(2) of the Companies Act,2013, till the latter's constitution. Thus, a depositor is free to file an application under section 73(4) of the Companies Act,2013, 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 Companies Act,2013 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 Companies Act,2013.
•     With reference to Explanation provided with Rule 19 of the Companies (Acceptance of Deposits) Rules, 2014 ministry clarified that in case of a company which had accepted or invited public deposits under the relevant provisions of the Companies Act, 1956 and rules made under that Act (hereinafter known as “Earlier Deposits”) and has been repaying such deposits and interest thereon in accordance with such provisions, the provisions of section 74(1)(b) of the Companies Act,2013 shall be deemed to have been complied with if the company complies with requirements under the Companies Act,2013 and Companies (Acceptance of Deposits) Rules, 2014 and continues to repay such deposits and interest due thereon on due dates for the remaining period of such deposit in accordance with the terms and conditions and period of such Earlier Deposits and in compliance with the requirements under the Companies Act,2013 and Companies (Acceptance of Deposits) Rules, 2014 and  the fresh deposits by every eligible company shall have to be in accordance with the provisions of Chapter V of the Companies Act,2013  and Companies (Acceptance of Deposits) Rules, 2014.
•     It was further clarified by the ministry that Registrar of Companies may initiate 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 above.