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Deposits section 74

Gaurav (ACS) (90 Points)

27 August 2014

If non eligible co. has accepted deposit exceeding 50% of the paidup capital and free reserve and it does not repay by March 2014. Then what are the penalties and prosecution??

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Vandana J Doshi (Practising Company Secretary) (12562 Points)
Replied 27 August 2014

Rule 21 of the deposits rules 2014 Punishment for contravention.- If any company referred to in sub-section (2) of section 73 or any eligible company inviting deposits or any other person contravenes any provision of these rules for which no punishment is provided in the Act, the company and every officer of the company who is in default shall be punishable with fine which may extend to five thousand rupees and where the contravention is a continuing one, with a further fine which may extend to five hundred rupees for every day after the first day during which the contravention continues.

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Gaurav (ACS) (90 Points)
Replied 27 August 2014

But section 74 says if the co. fails to repay deposit within time specified then co. shall be punishable with fine which shall not be less than one crore which may exyend to 10 crores. Further officer in default will be punishable with not less tha 25 lakhs which may extend to 2 Crores.

Vandana J Doshi (Practising Company Secretary) (12562 Points)
Replied 27 August 2014

What i have mentioned is the general penalty for violation of provisions relating to deposits.

Gaurav (ACS) (90 Points)
Replied 27 August 2014

Originally posted by : gaurrav
	But section 74 says if the co. fails to repay deposit within time specified then co. shall be punishable with fine which shall not be less than one crore which may exyend to 10 crores. Further officer in default will be punishable with not less tha 25 lakhs which may extend to 2 Crores.

Then these are also applicable along with general penalty?? I just wanted to confirm as for a Private Company or a public co. having net worth of less than 100 Crores these penalties are too hefty.