SCENARIO POST COMPANIES (AMENDMENT) ACT, 2017 – DEPOSIT

Pre Amendment:  As per section 76A of the Companies Act, 2013,

     ·   If the Company has accepted or invited or allowed or causes any other person to accept or invite on its behalf any deposit in contravention of the provisions of  section 73 or section 76 the Act or rules made thereunder OR

    ·   If the Company failed to repay the deposit or part thereof or any interest due thereon within the  time as per of  section 73 or section 76 or such further time as may be allowed by the Tribunal under section 73

The default was compoundable offence and the penalty provided is mentioned below:  

·   Company – not less than Rs.1,00,00,000/- [Rupees One Crore] which may extend to Rs.10,00,00,000/-[Rupees Ten Crores] and payment of deposit alongwith interest thereon AND

·   Every officer of the company who is in default – Imprisonment which may extend to seven years or fine not less than Rs - 25,00,000 [Rupees Twenty Five lakhs] but may extend to  Rs. 2,00,00,000/-  [Rupees Two crores] or with both

 Post Amendment: The Companies (Amendment) Act, 2017 has altered the provisions of the thereby making the above referred default as non-compoundable. Every officer of the Company who is in default shall be punishable with imprisonment and fine. The revised penalty is as follows:

·   Company – not less than Rs.1,00,00,000/- [Rupees One Crore] or twice the amount of deposit accepted by the company, whichever is lower which may extend to Rs. 10,00,00,000/- [Rupees Ten Crores] and payment of deposit alongwith interest thereon AND

·   Every officer of the company who is in default – Imprisonment which may extend to seven years and fine not less than Rs - 25,00,000 [Rupees Twenty Five lakhs] but may extend to Rs. 2,00,00,000/-  [Rupees Two crores]