Section 74 — Repayment of Deposits Accepted Before Commencement of the Act
## Section 74 — Treatment of pre-existing deposits
Section 74 deals with deposits which were accepted by a company before the commencement of the Companies Act, 2013 and which remained unpaid or became due thereafter.
### Twin Obligations under Section 74(1)
(a) Filing of Statement with ROC:
Within 3 months from the commencement of the Act (or from the date on which payments become due, whichever is earlier), file a statement with the Registrar of Companies disclosing:
All particulars of the deposits accepted,
The amounts that remain unpaid (including interest), and
Arrangements made for repayment.
(b) Repayment Deadline:
Repay all such deposits along with interest within 3 years from the commencement of the Act or on or before the maturity date, whichever is earlier.
### Important Note
If the company has been repaying such deposits and interest regularly without default during the relevant period, this is treated as compliance with Section 74.
## Section 74(2) — Extension of time by Tribunal
On an application by the company, the NCLT (Tribunal) may, after considering:
The financial condition of the company,
The amount of deposit and interest payable, and
Any other relevant matters,
grant a reasonable extension of time for repayment.
## Section 74(3) — Punishment for non-repayment
Company: Fine of ₹1 crore to ₹10 crore.
Officer in default: Imprisonment up to 7 years AND fine of ₹25 lakh to ₹2 crore.
Worked example
### Example 1
Example: Old & Co. Ltd. had accepted public deposits of ₹40 lakh on 1st January 2013 with maturity on 31st December 2018. The Companies Act, 2013 came into force on 1st April 2014. Discuss the company's obligations under Section 74.
Answer:
(i) Statement to ROC: File within 3 months from 1st April 2014 (i.e., by 30th June 2014) giving details of these deposits and arrangements for repayment.
(ii) Repayment: Repay within 3 years from 1st April 2014 (i.e., by 31st March 2017) OR by maturity (31st Dec 2018), whichever is earlier — i.e., by 31st March 2017.
If unable to repay by then, the company can apply to the NCLT under Section 74(2) for extension.
⚠️ Common exam mistakes
Reading 'whichever is earlier' as 'whichever is later' for the repayment deadline.
Confusing the 3-month period (filing of statement) with the 3-year period (repayment).
Believing that punishment under Section 74(3) only includes fine — it includes both imprisonment AND fine for officers.
Failing to recognise that regular repayment without default is itself compliance with Section 74.
Bare-Act text Section 74(1) · Companies Act, 2013 · click to expand
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; 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.