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

Rohan Pharma Ltd, a public company, accepted a deposit from a depositor for 18 months. On maturity, the company failed to repay it. Which is the correct legal position under the Companies Act, 2013 regarding the depositor's remedy?

Where a company fails to repay a matured deposit, the depositor may apply to the Tribunal, which can direct repayment, and the company and its officers in default are liable to penalties. The depositor does not have to wait for winding up or an AGM.

  1. AThe depositor has no remedy until the company is wound up
  2. BThe depositor can apply to the Tribunal for an order directing the company to repay the deposit, and the company and its officers in default face penaltiesCorrect
  3. CThe depositor can only approach a civil court under the Indian Contract Act
  4. DThe depositor must wait for the next annual general meeting before claiming repayment

Explanation

If a company fails to repay a deposit or interest when due, the depositor may apply to the Tribunal, which can order repayment and impose penalties on the company and officers in default. The Act does not restrict the depositor to civil courts or to winding up, so the other options are incorrect.

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