law: Companies (Amendment) Act, 2000
  19.
  
  Insertion of new sections 58AA and 58AAA.-
  After
  
  section 58A of the principal Act, the following sections shall be inserted,
  
  namely:-
  '58AA.
  
  Small depositors.-
  (1)
  
  Every company, which accepts deposits from small depositors, shall intimate to
  
  the Company Law Board any default made by it in repayment of any such 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 in respect of the names and addresses of each small
  
  depositor, the principal sum of deposits due to them and interest accrued
  
  thereupon.
  Explanation.-For
  
  the 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 Company Law Board, on receipt
  
  of intimation under sub-section (1) shall,-
  (a)
  
  exercise, on its own motion, powers conferred upon it by sub-section (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 Board 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 such 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 Company Law Board 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, proceeded against and punished
  
  accordingly. shall be deemed to be guilty of the offence and shall b liable to
  
  be
  (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. 58AAA. Default in acceptance or refund of deposits to be
  
  cognizable.-(1) Notwithstanding anything contained in sections 621 and 624,
  
  every offence connected with or arising out of acceptance of deposits under
  
  section 58A or section 58AA shall be recogniza le offence under the Code of
  
  Criminal Procedure, 1973 (2 of 1974).
  (2)
  
  No court shall take cognizance of any offence under sub-section (1) except on a
  
  complaint made by the Central Government or any officer authorised by it in
  
  this behalf.'.