LOAN RECEIVED FROM A LENDER HELD REPAYABLE AS DEPOSIT UNDER COMPANIES ACT HELD BY NCLT, ALLAHABAD.
Company’s own balance sheets continued to disclose the amount as
Long-Term Borrowings and it cannot refuse to repay the loan.
A company cannot retain funds admittedly received as loan and then refuse
repayment by contending that the lender was not its member.
Companies cannot avoid loan repayment obligations merely by raising technical objections regarding the status of the lender.
NCLT ALLAHABAD VS. DHANRAJ BUILDWELL PRIVATE LIMITED
Companies cannot avoid loan repayment
obligations merely by raising technical objections regarding the status of the
lender.
M/s Dhanraj
Builders advanced around ₹2.33 crore to Dhanraj Buildwell Private Limited in
2014 as financial assistance for its business operations. Except for a partial
repayment of ₹5 lakh, the balance amount remained unpaid.
The lender
approached NCLT seeking repayment under Sections 73 and 74 of the Companies
Act, 2013.
The
borrower opposed on the following grounds
The amount
was not a deposit under the Companies Act.
The lender
was not a member of the company and therefore could not invoke Section 73(4).
The NCLT
held that:
·
Money
received by the company as a loan fell within the definition of deposit under
Section 2(31), as it did not fall under any prescribed exclusion.
·
The alleged
repayment was not proved, particularly when the company’s own balance sheets
continued to disclose the amount as Long-Term Borrowings.
·
A company
cannot escape repayment merely because the amount was received from a
non-member.
The NCLT
directed the company to repay the outstanding amount along with applicable
interest within 30 days.
#R V SEKAR
FCS,LLB 79047 19295,
