Applicability of companies (acceptance of deposit) rules, 1975

This query is : Open

CA Sandeep Biradar (Querist)
Follow

29 April 2014 Hi Everyone, I have a query with regard to applicability of public deposits provisions to limited companies. The case is as follows. The company has collected Security Deposits (SD) from their dealers/agents on which it is paying a simple interest of 12% pa. But now there exist some dealers who aren't doing any business with company past 2-5 years but because they haven't withdrawn their SD's, Company is still paying them an interest @12% pa. As per my understanding, the SD got converted to public deposit where sec. 58A of Composites Act, 1956 and Companies (Acceptance of Deposit) Rules, 1975 would be applicable. please confirm whether my understanding is right. Thanks, Sandeep Biradar

vibhor

vibhor (Expert)
Follow

29 April 2014 a) ONE VIEW: Yes, include these as deposits in Form DPT4.
Reasons:
i) The meaning of the term "deposit" under sec 74 under Co Act, 2013 will
be as per sec 2(34) of the Co Act, 2013. Hence, these will be included as
deposits in Form DPT4.
ii) The intention of introduction of sec 74 is to repay all old deposits
within one year time or extended time. MCA wants that all deposits accepted
have to follow new Act & New Rules.
iii) This view can also be supplemented by the fact that legislature is
giving enough time i.e. 1 year time to repay the deposits existing on 1st
April, 2014 to comply with new Act & New Rules.
iv) ROC is expected to take this view .

Source: CA Nitesh More

http://www.cavibhorjain.com/