Company Cannot Deny Deposit Repayment Claim Merely Because Depositor Was Non-Member: NCLT Allahabad

The National Company Law Tribunal (NCLT) at Allahabad has held that a company cannot defeat a non-member's claim for repayment merely by contending that the money was received from someone who was not its member, where the amount falls within the statutory definition of a "deposit."

A bench comprising Judicial Member Praveen Gupta and Technical Member Ashish Verma held that a company's alleged non-compliance with the rules governing acceptance of deposits does not give it a right to retain money it has received. The bench also observed that such non-compliance may have separate penal consequences.

The case concerned Dhanraj Builders, which had advanced ₹2.33 crore to Dhanraj Buildwell Pvt. Ltd. as a loan. The company repaid ₹5 lakh, leaving ₹2.28 crore outstanding. Dhanraj Builders approached the tribunal seeking repayment of the outstanding amount with interest.

The company argued that the transaction did not qualify as a “deposit”. It also contended that Dhanraj Builders, being a non-member, could not invoke the statutory remedy for repayment of deposits.

The tribunal rejected the objection. It noted that the statutory definition of “deposit” covers money received by a company by way of a deposit, loan or in any other form, subject to specified exclusions.

The bench found that the ₹2.28 crore was advanced as a loan and did not fall within any of the exclusions under the Companies (Acceptance of Deposits) Rules, 2014. The company's balance sheets also reflected the amount as a long-term borrowing.

“In view of the express language of Section 2(31) of the Companies Act, 2013, the receipt of money by a company by way of loan falls within the statutory ambit of 'deposit', subject to the exclusions prescribed under Rule 2(1)(c) of the Deposit Rules,” the bench observed.

On the non-member issue, the bench noted that the law separately regulates deposits from members and deposits from persons other than members by eligible public companies. It held that the petitioner's status as a non-member could not, by itself, defeat the repayment claim.

The bench further held that even if accepting the money from a non-member contravened the statutory framework, that would not allow the company to retain the money.

The tribunal observed that such a contravention could invite penal action. The Registrar of Companies could also examine whether action under the relevant provision was warranted.

The tribunal also rejected the company's reliance on an undertaking claiming that the loan had already been repaid. It found no independent evidence to establish the alleged repayment, while the company's financial statements continued to show the amount as an outstanding liability.

The tribunal therefore held that the ₹2.28 crore was a “deposit” and directed Dhanraj Buildwell to repay the amount with interest within 30 days. It declined the requests for further action and an SFIO investigation, observing that the material on record did not establish fraud.