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TMI Blog2022 (7) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... usion that the amount in question cannot be treated as deposit and as such does not attract the penal interest that would have otherwise applied, for the following reasons: a. firstly, the money was given by the Petitioner in the year 2010, and was returned by the Respondent Company to the Petitioner in the year 2018, and hence the same shall be governed by the provisions of The Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975; b. secondly, as per the General Circular No. 05/2015 dated 20th March 2015 released by the Ministry of Corporate Affairs in consultation with RBI, the amount received by the private companies prior to 1st April 2014 shall not be treated as deposits under the Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014 provided that the same was disclosed by in financial statement for the financial year commencing on or after 1st April, 2014; and c. thirdly, as rightly contended by the learned counsel for the Respondents No. 1 2, the inaction of the Office on the said letters dated 11th December 2018 and 31st October 2019 was by virtue of the fact that the prayers contained therein were outside the purview of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was taken by the Respondent Company on the complaint filed by the Petitioner. The status of the same is currently reflected as under examination on the website of the Ministry of Corporate Affairs. f. The Petitioner has also preferred a private complaint under Section 200 of the Code before the Special Judge, Dwarka Courts, Delhi against Respondent No.3 and others including the Respondents No.1 and 2 for not having taken any action against Respondents No. 3 to 7 as per the law under Section 73 and 76A of the Companies Act, 2013. g. By way of the instant writ petition, the Petitioner has prayed for passing appropriate orders and direction to the respondent No. 2 to do their duty in accordance with law and to prosecute Respondents No.3 to 7 under Section 73 and 76A of the Companies Act, 2013 and to take appropriate action on the complaint filed by the petitioner. SUBMISSIONS 3. Learned counsel appearing on behalf of the Petitioner submitted that the Petitioner had paid amount in question to the Directors of Respondent No.3 Company for issuance of shares in the said company on 27th December 2010 by depositing the share application money in A/C No. 55820001000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also submitted that as per the provisions of Rule 2(1)(c)(vii) of Companies (Acceptance of Deposit) Rules, 2014, it is clear that the money paid towards the share application for allotment shall be treated as deposits if the said money is not refunded within 60 days from acceptance. Accordingly, it is submitted that the money paid by the petitioner to the Respondent No.3 was hence qualified to be treated as deposits since no shares were allotted to him. 9. The learned counsel for Petitioner has further submitted that as per Section 74(1) of the Companies Act, 2013, the companies accepting deposits prior to the commencement of the Companies Act, 2013 are obliged to file statement with the Registrar of Companies, if the amount of such deposit or any interest due thereon, remained unpaid on the commencement of the Act. The Respondent No. 3 Company has failed to comply with the said provision and hence is liable for punishment in violation of provisions of the Companies Act, 2013. 10. Furthermore, it is submitted that the Respondent No. 3 Company contravened Section 73 of the Companies Act, 2013 wherein the private companies are prohibited from accepting deposits from the publ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent No. 3 which are in clear contravention of Section 73 of the Companies Act, 2013 which has created an explicit bar on acceptance of deposits by Public to a Private Company punishable under Section 76A of the Companies Act, 2013. 16. Per Contra, Ms. Bharathi Raju, learned CGSC for Respondents No. 1 2 has submitted that the amount in question, that was given as share application money by the Petitioner on 27th December 2010, was returned without any interest by the Respondent No. 3 Company on 9th February 2018 to the Petitioner. Therefore, the amount in question is not at all due with the company and the dispute between the Petitioner and the Respondent No. 3 Company is only limited to the extent of adjudicating whether there is any entitlement of interest on the amount in question available to the Petitioner. 17. The learned counsel for Respondents No. 1 2 has contended that Petitioner had given the amount in question for allocation of shares in the year 2010 which falls under the operation of Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975 and not under the the Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014. 18. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating whether the penal interest as being claimed by the petitioner is applicable on the amount in question paid to the Respondent No. 3 Company. This can be decided by answering the following questions: a. Whether the Companies Act 2013 and the Companies (Acceptance of Deposit) Rules, 2014 is applicable on the amount in question? b. Whether the amount in question can be treated as deposit ? 25. Both these questions are interlinked and shall be answered sumptuously and comprehensively in the following paragraphs. ANALYSIS 26. For a better appreciation of the case at hand, it is pertinent to peruse and analyse the provisions of law invoked in the instant petition before delving deeper into the facts of the case; and even before their analysis it is crucial to test the applicability of these provisions to the case at hand. 27. It is pertinent to note that the provisions of Companies Act 2013 did not come into force on a single date, rather they have come into operation in phases. In the first phase, the Ministry of Corporate Affairs vide its notification dated 12th September 2013 notified 12th September 2013 as the date on which certain provisions of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contents of the General Circular No. 05/2015, dated 30th March, 2015 issued by the Ministry of Corporate Affairs, it has been clarified as under: 2. The matter has been examined in consultation with RBI and it is clarified that such amounts received by private companies prior to 1st April, 2014 shall not be treated as deposits‟ under the Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014 subject to the condition that relevant private company shall disclose, in the notes to its financial statement for the financial year commencing on or after 1st April, 2014 at the figure of such amounts and the accounting head in which such amounts have been shown in the financial statement. 34. As per this circular, the amount received by the private companies prior to 1st April 2014 shall not be treated as deposits under the Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014 provided that the same was disclosed in financial statement for the financial year commencing on or after 1st April 2014. 35. Therefore, as per Rule 2(b)(vii) of Companies (Acceptance of Deposits) Rules, 1975 read with General Circular No. 15/2015, the share appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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