COMPANY LAW BOARD

Company Law Board (CLB) is vested with powers to take action against the defaulting company. 

Now the powers have been vested with the Company Law Board for directing the defaulting NBFCs to make repayment of the deposits / interest with a view to protect the interests of the depositors.

Reserve Bank of India (Amendment) Act,1997 have added section 45QA to the Act so as to empower the Company Law Board to order repayment of deposit.
 

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WHAT IS SECTION 45QA                                                          

Section 45QA reads as follows :

"Power of Company Law Board to order repayment of deposit. -

(1) Every deposit accepted by a non-banking financial company, unless renewed, shall be repaid

and the other persons interested in the matter.

To give effect to the above provisions, Company Law Board Regulations 1991 have been amended vide Notification No.GSR 433 (E) dated 1st August, 1997-(1997) 26 CLA (ST) 112.

The application for refund of deposits and interest thereon, can be made in prescribed Form No.4 of the Company Law Board Regulations 1991 in duplicate along with a fee of Rs.50 by way of Demand Draft/Pay Order in favour of Pay & Accounts Officer, Department of Company Affairs to the Bench Officer, Company Law Board, at New Delhi/Calcutta/Mumbai/Chennai under whose jurisdiction, the Registered Office of the defaulting company falls.

The following table gives the jurisdiction of various offices of the Company Law Board :-in accordance with the terms and conditions of such deposit.

(2) Where a non-banking financial company has failed to repay any deposit or part thereof in accordance with the terms and conditions of such deposit, the Company Law Board constituted under section 10E of the Companies Act, 1956 (1 of 1956) may, if it is satisfied, either on its own motion or on an application of the depositor, that it is necessary so to do to safeguard the interest of the company, the depositors or in the public interest, direct, by order, the non-banking financial company to make repayment of such deposit or part thereof forthwith or within such time and subject to such conditions as may be specified in the order:

Provided that the Company Law Board may, before making any order under this sub-section, give a reasonable opportunity of being heard to the non-banking financial company.

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