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TMI Blog1984 (7) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... es, 1975, showed that a sum of Rs. 1,95,000 in respect. of forty accounts remained unpaid to the depositors during the year ending March 31, 1976, though claimed. The non-repayment of the deposits of Rs. 1,95,000 on maturity is in contravention of section 58A(3)( a ) of the Companies Act, 1956, punishable under section 629A of the said Act. Hence the prosecution. It is contended by the learned counsel for the petitioners that the acceptance of deposits by non-banking non-financial institutions was formerly governed by the directions and regulations issued by the Reserve Bank of India under the Reserve Bank of India Act, 1934, and violation of the directions of the Reserve Bank of India in the acceptance of deposits was punishable with imprisonment up to a period of three years only, but, under section 58A of the Companies Act introduced by the Amendment Act XLI of 1974, the punishment has been enhanced to five years, that an offence committed earlier cannot be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence and, hence, section 58A imposing a greater punishment of five years is hit by arti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erve Bank of India under Chapter III-B of the Reserve Bank of India Act, 1934, shall, unless renewed in accordance with clause ( b ), be repaid in accordance with the terms of such deposit. ( b )No deposit referred to in clause ( a ) shall be renewed by the company after the expiry of the term thereof unless the deposit is such that it could have been accepted if the rules made under sub-section (1) were in force at the time when the deposit was initially accepted by the company. ( c )Where before the commencement of the Companies (Amendment) Act, 1974, any deposit was received by a company in contravention of any direction made under Chapter III-B of the Reserve Bank of India Act, 1934, repayment of such deposit shall be made in full on or before the 1st April, 1975, and such repayment shall be without prejudice to any action that may be taken under the Reserve Bank of India Act, 1934, for the acceptance of such deposit in contravention of such direction. (4) Where any deposit is accepted by a company after the commencement of the Companies (Amendment) Act, 1974, in contravention of the rules made under sub-section (1), repayment of such deposit shall be made by the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (2), nothing in this section shall apply to such classes of financial companies as the Central Government may, after consultation with the Reserve Bank of India, specify in this behalf. (8) The Central Government may, if it considers it necessary for avoiding any hardship or for any other just and sufficient reason, by order, issued either prospectively or retrospectively from a date not earlier than the commencement of the Companies (Amendment) Act, 1974 (41 of 1974), grant extension of time to a company or class of companies to comply with, or exempt any company or class of companies from, all or any of the pro visions of this section either generally or for any specified period subject to such conditions as may be specified in the order : Provided that no order under this sub-section shall be issued in relation to a class of companies except after consultation with the Reserve Bank of India. Explanation. For the purposes of this section, ' deposit means any deposit of money with, and includes any amount borrowed by, a company but shall not include such categories of amount as may be prescribed in consultation with the Reserve Bank of India." The prosecution, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken under the Reserve Bank of India Act, 1934, as is clear from the last clause of section 58A(3)( c ) of the Companies Act. Section 58A(6), however, provides for punishment for acceptance of deposits after the Companies (Amendment) Act came into force in excess of the limits prescribed under sub-section (1) of section 58A. The Legislature has advisedly left the contravention of the directions of the Reserve Bank of India under Chapter III-B of the Reserve Bank of India Act, 1934, to be dealt with only under that Act and not by the Amendment Act of 1974. The assumption that acceptance of deposits before the Companies (Amendment) Act came into force in contravention of the directions of the Reserve Bank of India is made punishable under section 58A of the Act and with greater severity does not appear to be correct. The next contention advanced by the learned counsel for the petitioners is that the failure to repay the pre-Companies (Amendment) Act deposits on due dates was not an offence before the Companies (Amendment) Act of 1974 came into force and the Legislature is not competent to make it an offence in respect of those deposits as has been done in section 58A(3)( c ) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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