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CA Intermediate · Corporate and Other Laws · Acceptance of Deposits by Companies

Meera Foods Ltd, a public company, accepted deposits but failed to repay on maturity, with the default continuing. A depositor, Mr Anand, asks about the remedy. Which is the correct legal position under the Companies Act, 2013?

The depositor may apply to the Tribunal, which can order repayment of the deposit with interest, and the company and its officers in default face penalties including fine and imprisonment as the Act provides. The depositor is not left without a remedy, and SEBI is not the forum.

  1. AThe depositor can only wait; the Act provides no remedy
  2. BThe Tribunal may, on an application by the depositor, order repayment and the company and officers in default are liable to penalty and imprisonment as providedCorrect
  3. COnly SEBI can direct repayment
  4. DThe depositor can file an application only after 10 years

Explanation

Where a company fails to repay a deposit or interest on due date, the depositor may apply to the Tribunal, which can direct repayment, and the company and its officers in default face penal consequences, including fine and imprisonment, under the Act. SEBI has no role for an unlisted-deposit default, and no 10-year wait applies.

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