Chapter V - Acceptance of Deposits by Companies
Section 74
Section 74: repayment of deposits accepted before the Act
Section 74 deals with deposits a company accepted before the Act commenced: it required a statement to the Registrar, repayment within a fixed time, and allows the Tribunal to extend that time.
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This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) Where in respect of any deposit accepted by a company before the commencement of this Act, the amount of such deposit or part thereof or any interest due thereon remains unpaid on such commencement or becomes due at any time thereafter, the company shall— (a) file, within a period of three months from such commencement or from the date on which such payments, are due, with the Registrar a statement of all the deposits accepted by the company and sums remaining unpaid on such amount with the interest payable thereon along with the arrangements made for such repayment, notwithstanding anything contained in any other law for the time being in force or under the terms and conditions subject to which the deposit was accepted or any scheme framed under any law; and (b) repay within three years from such commencement or on or before expiry of the period for which the deposits were accepted, whichever is earlier: Provided that renewal of any such deposits shall be done in accordance with the provisions of Chapter V and the rules made thereunder.
(2) The Tribunal may on an application made by the company, after considering the financial condition of the company, the amount of deposit or part thereof and the interest payable thereon and such other matters, allow further time as considered reasonable to the company to repay the deposit.
(3) If a company fails to repay the deposit or part thereof or any interest thereon within the time specified in sub-section (1) or such further time as may be allowed by the Tribunal under sub-section (2), the company shall, in addition to the payment of the amount of deposit or part thereof and the interest due, be punishable with fine which shall not be less than one crore rupees but which may extend to ten crore rupees and every officer of the company who is in default shall be punishable with imprisonment which may extend to seven years or with fine which shall not be less than twenty-five lakh rupees but which may extend to two crore rupees, or with both.
Introduction
Section 74 is a transitional provision. Where a deposit accepted before commencement, or interest on it, remained unpaid at commencement or fell due later, the company had to file a statement with the Registrar and repay within the period in clause (b).
Sub-section (1) came into force on 1 April 2014 (S.O. 902(E)); sub-sections (2) and (3) came into force on 6 June 2014 (S.O. 1459(E)), as recorded in the India Code commencement note. Clause (b) was substituted by the Companies (Amendment) Act, 2017, section 16, with effect from 15 August 2018 according to the India Code footnote.
Key takeaways
Statement to the Registrar
Clause (a) required a statement of all such deposits, unpaid sums, interest and repayment arrangements within three months of commencement or of the due date.
Repayment period
The current clause (b) requires repayment within three years from commencement or on or before expiry of the deposit period, whichever is earlier; renewals must follow Chapter V and its rules.
Tribunal extension and penalty
The Tribunal may allow further time; default beyond the allowed time attracts the fines and officer punishment in sub-section (3).
Identify legacy deposits
List every deposit accepted before the Act commenced that remained unpaid at commencement or fell due afterwards, including interest. Section 74(1) applies notwithstanding other laws, the deposit terms or any scheme framed under any law.
The amended clause (b) replaced the original 2013 text, which required repayment within one year from commencement or from the due date, whichever was earlier. Check which version applied to the period under review.
Check the filing and repayment record
Confirm whether the clause (a) statement was filed with the Registrar within the three-month window and whether repayment met the clause (b) deadline. Any renewal of such a deposit must comply with Chapter V and the rules made under it, principally the Companies (Acceptance of Deposits) Rules, 2014.
Tribunal application for further time
Under sub-section (2) the company may apply to the Tribunal, which considers the company’s financial condition, the deposit amount and interest, and other matters before allowing reasonable further time.
Consequences of default
If repayment is not made within the statutory or extended time, sub-section (3) makes the company liable, in addition to repaying the deposit and interest, to a fine of not less than one crore rupees, extending to ten crore rupees. Every officer in default is punishable with imprisonment up to seven years or a fine of twenty-five lakh to two crore rupees, or both. Section 75 adds personal liability for officers where deposits were accepted with intent to defraud.
Practical preparation
Reconcile the pre-commencement deposit ledger; trace the Registrar statement; compare repayment dates with clause (b); collect any Tribunal order extending time; review renewals against Chapter V and the Deposit Rules.
Practical checklist
Do
- Keep the statement filed under clause (a) with the deposit ledger.
- Apply to the Tribunal before the period expires if more time is genuinely needed.
Avoid
- Do not renew a legacy deposit outside Chapter V and its rules.
- Do not assume contractual deposit terms override section 74(1).
Illustrative example
Hypothetical: a legacy fixed deposit
During due diligence, a buyer finds a deposit the target company accepted under the old law that was repaid late.
Trace
Locate the clause (a) statement and the repayment date.
Compare
Test the repayment date against clause (b) as it stood for the relevant period.
Order
Check for any Tribunal order allowing further time under sub-section (2).
Outcome
- Without a timely repayment or a Tribunal extension, the finding is flagged as potential exposure under section 74(3) for professional advice.
Glossary
- Deposit
- A receipt of money by way of deposit or loan, as defined in section 2(31) and the Deposit Rules, subject to their exclusions.
- Tribunal
- The National Company Law Tribunal constituted under the Act.
Frequently asked questions
Which deposits does section 74 cover?
Deposits accepted by a company before the commencement of the Act whose amount or interest remained unpaid on commencement or became due afterwards.
Can the repayment time be extended?
Yes. The Tribunal may, on the company’s application, allow further time it considers reasonable after reviewing the matters listed in sub-section (2).
What happens if the company still does not repay?
Besides repaying principal and interest, the company faces a fine of one crore to ten crore rupees, and officers in default face imprisonment up to seven years, a fine of twenty-five lakh to two crore rupees, or both.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026