Section 74 of the Companies Act, 2013
Section 74 of the Companies Act, 2013 deals with the “Repayment of deposits, etc., accepted before commencement of this Act.”
📘 Summary of Section 74:
This section mandates companies to repay deposits (and interest, if any) that were accepted before the commencement of the Companies Act, 2013 (i.e., before 1st April 2014), under the previous Companies Act, 1956.
✅ Key Provisions of Section 74:
Timeframe for Repayment:
Companies must file a statement with the Registrar within 3 months from the commencement of the Act (i.e., by 30 June 2014) stating:
Amount of deposits accepted before commencement
Amount remaining unpaid
Maturity dates
Repayment of these deposits must be made within 3 years from commencement or before the maturity date, whichever is earlier.
Application to Tribunal:
If a company is unable to repay within this period, it can apply to the NCLT (National Company Law Tribunal) for an extension.
Penalty for Default:
Company: Fine of ₹1 crore to ₹10 crore.
Every officer in default: Imprisonment up to 7 years or fine of ₹25 lakh to ₹2 crore, or both.
🧾 Example:
If a company accepted ₹50 lakh as deposit in 2012 and the deposit was due for repayment in 2016, the company was required to:
File the required statement by June 2014.
Repay the deposit by 2016 or earlier.
If it couldn't repay, it needed to seek an extension from the NCLT.
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