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Microlesson · 5-min read

Definition of 'Depositor' — Rule 2(1)(d)

# Definition of 'Depositor' [Rule 2(1)(d)]

## Statutory Text

> "Depositor" means —

> - any member of the company who has made a deposit with the company in accordance with the provisions of Section 73 of the Companies Act; or

> - any person who has made a deposit with an eligible company in accordance with the provisions of Section 76 of the Companies Act.

## Two Limbs of the Definition

LimbWho is the depositor?Type of company acceptingSection
First limbA member of the companyAny company accepting from membersSection 73
Second limbAny person (member or non-member, i.e., from the public)Eligible company onlySection 76

## Key Observations

1. A member depositing under Section 73 is a depositor. (Applicable to both private and public companies.)

2. Any person (including a non-member) becomes a depositor only when the receiving company is an eligible company under Section 76 — i.e., an eligible public company can accept deposits from the public.

3. The definition presupposes that the receipt qualifies as a deposit under Section 2(31) read with Rule 2(1)(c). Persons giving money under the exclusions (e.g., ICDs, debenture-holders of secured debentures, etc.) are NOT depositors.

## Connection With Other Concepts

  • A private company can have depositors only from its members (because it cannot accept from the public).
  • A public company that is NOT an 'eligible company' can have depositors only from its members.
  • Only an eligible company can have depositors who are members of the public.

Worked example

### Example 1

Example: Mr. R, a shareholder of ABC Ltd. (a private company), deposits ₹2 lakh with ABC Ltd. for 2 years at 10% interest. Mr. S, who is not a shareholder, deposits ₹3 lakh with the same company. Who is a 'depositor'?

Solution: Only Mr. R is a 'depositor'. A private company can accept deposits from its members under Section 73; it cannot accept from the public. ABC Ltd. cannot accept the deposit from Mr. S in the first place. Even if it does, Mr. S would not be a 'depositor' as Section 76 (the second limb) applies only to eligible companies, not private companies.

### Example 2

Example: PQR Ltd. is an eligible public company. It accepts ₹5 lakh from Mr. K, a member of the public who is not a shareholder. Is Mr. K a depositor?

Solution: Yes. Under the second limb of Rule 2(1)(d), 'any person' who deposits money with an eligible company in accordance with Section 76 is a depositor. Mr. K need not be a member to qualify.

⚠️ Common exam mistakes

  • Treating every person who lends money to a company as a 'depositor'. The lender is a depositor only if (a) the receipt is a 'deposit' under the Act/Rules, AND (b) the lender falls within either of the two limbs of Rule 2(1)(d).
  • Forgetting that the second limb (any person) is available only when the receiving company is an 'eligible company' under Section 76.
  • Confusing depositor with debenture-holder. Holders of secured debentures or listed unsecured NCDs are not 'depositors' because their amounts are excluded from 'deposit' under Rule 2(1)(c).
Bare-Act text Rule 2(1)(d) · Companies (Acceptance of Deposits) Rules, 2014 · click to expand
Rule 2(1)(d): 'Depositor' means — (i) any member of the company who has made a deposit with the company in accordance with the provisions of Section 73 of the Companies Act; or (ii) any person who has made a deposit with an eligible company in accordance with the provisions of Section 76 of the Companies Act.
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