Chapter V - Acceptance of Deposits by Companies
Section 76A
Section 76A: punishment for deposit contraventions
Section 76A sets the punishment where a company accepts or invites deposits in breach of section 73, section 76 or the rules, or fails to repay deposits or interest on time.
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This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
Where a company accepts or invites or allows or causes any other person to accept or invite on its behalf any deposit in contravention of the manner or the conditions prescribed under section 73 or section 76 or rules made thereunder or if a company fails to repay the deposit or part thereof or any interest due thereon within the time specified under section 73 or section 76 or rules made thereunder or such further time as may be allowed by the Tribunal under section 73,— (a) the company shall, in addition to the payment of the amount of deposit or part thereof and the interest due, be punishable with fine which shall not be less than one crore rupees or twice the amount of deposit accepted by the company, whichever is lower but which may extend to ten crore rupees; and (b) every officer of the company who is in default shall be punishable with imprisonment which may extend to seven years and with fine which shall not be less than twenty-five lakh rupees but which may extend to two crore rupees,: Provided that if it is proved that the officer of the company who is in default, has contravened such provisions knowingly or wilfully with the intention to deceive the company or its shareholders or depositors or creditors or tax authorities, he shall be liable for action under section 447.
Introduction
The company must repay the deposit and interest and is also liable to a fine. Every officer in default faces imprisonment and a fine. If an officer acted knowingly or wilfully with intent to deceive, section 447 (fraud) applies.
Key takeaways
Company fine
Not less than one crore rupees or twice the deposit accepted, whichever is lower, up to ten crore rupees, in addition to repaying the deposit and interest.
Officer punishment
Imprisonment up to seven years and a fine of twenty-five lakh to two crore rupees.
Fraud route
Knowing or wilful contravention with intent to deceive makes the officer liable for action under section 447.
What triggers section 76A
Section 76A applies where a company accepts or invites, or allows or causes another person to accept or invite on its behalf, any deposit in contravention of the manner or conditions prescribed under section 73 or section 76 or the rules; or fails to repay a deposit or interest within the time specified under those provisions or such further time as the Tribunal allows under section 73.
Consequences for the company
The company must pay the deposit or part of it and the interest due, and is punishable with a fine of not less than one crore rupees or twice the amount of deposit accepted, whichever is lower, which may extend to ten crore rupees (clause (a)).
Consequences for officers
Every officer in default is punishable with imprisonment which may extend to seven years and with a fine of not less than twenty-five lakh rupees, which may extend to two crore rupees (clause (b)). If it is proved that the officer contravened the provisions knowingly or wilfully with intent to deceive the company, its shareholders, depositors, creditors or tax authorities, the officer is liable for action under section 447.
Amendments and commencement
Section 76A was inserted by section 8 of the Companies (Amendment) Act, 2015, in force from 29 May 2015 under S.O. 1440(E). Section 17 of the Companies (Amendment) Act, 2017 added the "twice the amount of deposit accepted, whichever is lower" alternative to the one-crore minimum fine, made imprisonment and fine cumulative for officers ("and with fine"), and removed "or with both", effective 9 February 2018 under S.O. 630(E). The bare-law text keeps the comma left behind by that omission, as India Code does.
Practical preparation
Review receipts for deposit classification; confirm compliance with section 73 or 76 and the Deposit Rules before accepting; track repayment and interest dates; seek Tribunal extension where available under section 73; brief officers on personal exposure.
Practical checklist
Do
- Treat deposit compliance as a board-level risk with named responsible officers.
- Keep evidence that each deposit met the section 73 or 76 conditions when accepted.
Avoid
- Do not accept money that may be a deposit without checking section 2(31) and the Deposit Rules.
- Do not miss repayment dates without seeking relief.
Illustrative example
Hypothetical: unsecured loans from outsiders
A company accepts money from persons who are not members, without checking whether the receipts are deposits.
Classify
Test each receipt against section 2(31) and the Deposit Rules exclusions.
Assess
If the receipts are deposits accepted outside Chapter V, section 76A applies.
Remediate
Plan repayment with interest and take advice on officer exposure.
Outcome
- The company faces repayment and a fine; officers in default face imprisonment and fines.
Glossary
- Officer in default
- An officer covered by section 2(60) for the default in question.
- Section 447
- The Act’s punishment provision for fraud.
Frequently asked questions
What is the minimum fine for the company?
One crore rupees or twice the amount of deposit accepted, whichever is lower; the maximum is ten crore rupees.
Can an officer escape with only a fine?
No. Since 9 February 2018, clause (b) provides imprisonment up to seven years and a fine, not an alternative.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026