Public Deposits - Acceptance of ‑ Scope and provision of Companies (Acceptance of Deposits) Rules, 1975 - Companies Law - Letter : No. 3/17/79‑CL‑X,

Letter : No. 3/17/79 ‑ CL ‑ X, dated 30 ‑ 6 ‑ 1979. Subject:- Public Deposits - Acceptance of ‑ Scope and provision of Companies (Acceptance of Deposits) Rules, 1975 explained Rule 3(1)(b) : WHETHER RETENTION OF BALANCE PAYMENT OF DEPOSIT AMOUNTS TO RENEWAL Query : The constituent company has incurred losses in the last year and its paid‑up capital and reserves have depleted. As a result, the deposits already accepted by the company have crossed the maximum permissible limit prescribed under the Rules. The deposits accepted by the company are for a period exceeding six months. There is no specific provision either under the Rules governing acceptance of deposits or in the terms and conditions under which deposits have been accepted by the company prohibiting a part payment by the company against the deposit amount to those who are willing to accept the same. The question that arises for consideration is whether the company concerned can in such a case resort to part payments both to satisfy the depositors willing to accept such part payments as also to bring down the deposits remaining with it within the limits prescribed by law. Incidentally, a question would also arise whether by making such part payments and keeping the balance amount of deposits, the company would have by implication renewed the balance amount of deposits ? Answer : If the deposits were accepted at a point of time when they were within limits, they are to be repaid according to the date of maturity. If due to subsequent losses, etc., the deposits already accepted exceed the limit, which has become reduced due to losses, there is no contravention of the provisions of the Rules.