58AA. Small depositors.—(1)
Every company, which accepts deposits from small depositors,
shall intimate to the Tribunal any default made by it in repayment
of any deposits or part thereof or any interest thereupon.
(2) The intimation under sub-section (1) shall,—
(a) be given within sixty days from the date of default;
(b) include particulars iii respect of the names and addresses
of each small depositor, the principal sum of deposits due
to them and interest accrued thereupon.
Explanation.—For or removal of doubts, it is hereby
declared that the intimation under this section shall be given
on monthly basis
(3) Where a company has made a default in repayment of any
deposit or part thereof or any interest thereupon to a small
depositor, the Tribunal on receipt of intimation under sub-section
(1) shall,—
(a) exercise, on its own motion, powers conferred upon it
by subsection (9) of section 58A;
(b) pass an appropriate order within a period of thirty days
from the date of receipt of intimation under sub-section (1):
Provided that the Tribunal may pass order after expiry of
the period of thirty days, after giving the small depositors
an opportunity of being heard:
Provided further that it shall not be necessary for a small
depositor to be present at the hearing of the proceeding under
this sub-section.
(4) No company shall, at any time, accept further deposits
from small depositors, unless each small depositor, whose
deposit has matured, had been paid the amount of the deposit
and the interest accrued thereupon:
Provided that nothing contained in this sub-section shall
apply to—
(a) any deposit which has been renewed by the small depositor
voluntarily; or
(b) any deposit, whose repayment has become impracticable
due to the death of the small depositor or whose repayment
has been stayed by a competent Court or authority.
(5) Every company, which has on any occasion made a default
in the repayment of a deposit or part thereof or any interest
thereupon to a small depositor, shall state, in every future
advertisement and application form inviting deposits from
the public, the total number of small depositors and amount
due to them in respect of which such default has been made.
(6) Where any interest accrued on deposits of the small depositors
has been waived, the fact of such waiver shall be mentioned
by the company in every advertisement and application form
inviting deposits issued after the waiver.
(7) Where a company had accepted deposits from small depositors
and subsequent to such acceptance of deposits, obtains funds
by taking a loan for the purposes of its working capital from
any bank, it shall first utilise the funds so obtained for
the repayment of any deposit or any part thereof or any interest
thereupon to the small depositor before applying such funds
for any other purpose.
(8) Every application form, issued by a company to a small
depositor for accepting deposits from him, shall contain a
statement to the effect that the applicant had been apprised
of—
(a) every past default by the company in the repayment of
deposit or interest thereon, if any, such, default has occurred;
and
(b) the waiver of interest under sub-section (6), if any,
and reasons therefor.
(9) Whoever knowingly fails to comply with the provisions
of this section or comply with any order of the Tribunal shall
be punishable with imprisonment which may extend to three
years and shall also be liable to fine for not less than five
hundred rupees for every day during which such non-compliance
continues.
(10) If a company or any other person contravenes any provision
of this section, every person, who at the time the contravention
was committed, was a director of the company, as well as the
company, shall be deemed to be guilty of the offence and shall
be liable to be proceeded against and punished accordingly.
(11) The provisions of section 58A shall, as far as may be,
apply to the deposits made by a small depositor under this
section.
Explanation.—For the purposes of this section, “a
small depositor” means a depositor who has deposited
in a financial year a sum not exceeding twenty thousand rupees
in a company and includes his successors, nominees and legal
representatives.
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