Saturday, 31 October 2015

Application for Extension of Time for Repayment of Deposits before Company Law Board - Synopsis until 31/10/2015

Under the Companies Act, 2013 under S. 74 a company is supposed to repay fixed deposits accepted before April 2014 within one year from April 2014 or within one year from when the deposit became due for repayment. If the company is unable to repay the deposit, it can apply to the Company Law Board for extension of time for repayment of the deposits. The Company Law Board has discretion to extend such time depending upon the financial circumstances of the company.

Helios and Matheson moved an application for extension of time for repayment of deposits before the Company Law Board, Chennai.

The Company Law Board directed Helios and Matheson to advertise such application in national and local newspapers and invited objections to the same.

Objections were sent by a large number of depositors.

However since the Madras High Court issued an interim order (covered here) virtually staying any other judicial action, the Company Law Board has put the matter on hold and has not yet ruled on it. 

In the event the Company Law Board is asked to rule upon the same, it is highly unlikely that Helios and Matheson will succeed.