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2025 Supreme(Online)(NCLT) 3874
NATIONAL COMPANY LAW TRIBUNAL
Cheekati Radha Krishna, Member Judicial
JAYANTA KUMAR MITTAL – Appellant
Versus
POLOWINGS HEALTHTECH PRIVATE LIMITED – Respondent
Companies Act | C.P. No. 101 of 2023
For the Appellants/Petitioners: Mr. Ojaswa Pathak
For the Respondents:
A deposit for shares qualifies under the Companies Act; if shares aren't allotted in time, the amount must be refunded with interest.
Headnote:(A) Companies Act, 2013 - Section 2(31) - Companies (Acceptance of Deposit) Rules, 2014 - Obligation to allot shares upon receipt of deposit - Petitioner deposited Rs 15,00,000 for 3% shareholding but the company failed to allot shares or refund within stipulated time, leading to the petitioner's claim for refund of the deposit. (Paras 9, 6)
(B) Deposits - Definition of deposits under Companies Act includes advance for shares which were not allotted or refunded within specified time frame. Court held that the amount retaken as deposit shall be refunded along with penal interest due to non-compliance by the Respondent. (Paras 8, 9)
Facts of the case:
The Petitioner entered a Term Sheet with the Respondent for an investment of Rs 15,00,000 intending to acquire shares but faced inaction from the company after the deposit.
Findings of Court:
The Respondent Company was directed to refund the deposit plus interest due to non-compliance with share allotment obligations.
Issues: Whether the deposit qualifies under the Companies Act and obligations thereof for timely share allotment.
Ratio Decidendi: The court established that the amount retained as deposit must be returned as shares were not allotted within two months and further emphasized the legal obligations outlined in the Companies Act.
Result: C.P. No. 101 of 2023 is allowed and disposed of.
SINGLE BENCH
An Application under Section 73(4) of Companies Act.
IN THE MATTER OF:
JAYANTA KUMAR MITTAL
Petitioner
Versus
POLOWINGS HEALTHTECH PRIVATE LIMITED
Respondent Company
Coram:
Date of Pronouncement: 01.08.2025
Appearances (through hybrid mode):
Mr. Ojaswa Pathak, Adv ] Petitioner
ORDER
Submission of the Learned Counsel appearing for the Petitioner/Depositor
1. The Respondent company was incorporated under Companies Act, 2013 on 03.09.2021 as a Private company limited by share with an authorized capital of Rs 15,00,000/ (Rs Fifteen Lakh Only) and subscribed paid up Capital of Rs 1, 25,000/-( Rs One lakh Twenty Five Thousand Only).
2. The Petitioner had signed a binding Term Sheet with the Respondent Company on
12.04.2022 as per which the Petitioner had agreed to invest an amount of Rs 15,00,000 ( Rs Fifteen Lakh Only) for an equity amounting to 3% of shareholding in the Respondent Company.
3. The Petitioner remitted the deposit to the Respondent Company on 13.04.2022 through bank transfer. As per the Term Sheet dated 12.04.2022, Respondent Company is under legal obligation to allot equity shares amounting to 3% of its shareholding and issue share certificates within 30 days of the release of deposit. However, despite of repeated remainders by Petitioner, no action was taken by Respondent Company to comply with the provisions of the Term Sheet.
Submission of the Learned Counsel appearing for the Respondent Company
4. As per the terms and conditions of the Term Sheet, the Respondent Company has to allot equity amounting to 3% of shareholding in the Respondent Company upon the receipt of investment by the Petitioner.
Finding and Analysis
5. This matter was reserved for orders on 17 June 2025. However, on 24th June 2025, the Learned Counsel of the Respondent Company mentioned before this Hon'ble Tribunal that due to technical glitches, he was unable to appear before this Tribunal and accordingly he sought an opportunity to be heard and prayed for recalling of order dated 17th June 2025. In view of above, the Respondent Company was given liberty to file an appropriate Application to recall the order dated 17th June 2025 within seven days, upon serving the Petitioner in advance, failing which this Tribunal shall pass appropriate Orders. However, till 30.07.2025, the Respondent company has not filed any Application for recalling of orders.
6. Upon perusal of the record, it is found that the Petitioner has signed Term Sheet with Respondent Company for an investment of Rs 15,00,000 (Rs Fifteen Lakh only) and the Respondent company is under obligation to allot equity share amounting to 3% of its shareholding and had to issue share certificate with 30 days from the date of deposit.
7. At this juncture, it will be relevant to refer the provisions relating to Deposits. Section
2(31) of the Companies Act, 2013 (the Act) defines ‘deposit’ to include any receipt of money by way of deposit or loan or in any other form by a company but does not include such categories of amount as may be prescribed in consultation with the RBI. Further, as per Explanation (a) of Rule 2(1)(c)(vii) of Companies (Acceptance of Deposit) Rules, 2014 is laid as follows.
a) Without prejudice to any other liability or action, if the securities for which application money or advance for such securities was received cannot be allotted within sixty days from the date of receipt of the application money or advance for such securities and such application money or advance is not refunded to the subscribers within fifteen days from the date of completion of sixty days, such amount shall be treated as a deposit under these rules.
8. From the above extract it is evident that if the securities for which application money or advance for such securities was received and shares are not allotted and such Application money or advances is not refunded to the subscriber within fifteen days from the date of completion of sixty days, such amount shall be treated as a deposit under said Rules.
9. The sa
