Corporate and Other Laws (Group I) Model Test Paper - 1 (Answers) | Model Test Papers for CA Intermediate PDF Download

 Page 1


ANSWER OF MODEL TEST PAPER 1  
INTERMEDIATE COURSE: GROUP – I 
PAPER – 2: CORPORATE AND OTHER LAWS  
ANSWER TO PART – I CASE SCENARIO BASED MCQS 
1. (d)
2. (b)
3. (d)
4. (b)
5. (c)
6. (c)
7. (a)
8. (a)
9. (b)
10. (b)
11. (c)
12. (b)
13. (c)
14. (b)
15. (a)
ANSWERS OF PART – II DESCRIPTIVE QUESTIONS 
1. (a) (i)  According to section 2(85) of the Companies Act, 2013, small
company means a company, other than a public company, having- 
(A) paid-up share capital not exceeding four crore rupees; and
(B) turnover as per profit and loss account for the immediately
preceding financial year not exceeding forty crore rupees:
Provided that nothing in this clause shall apply to a holding 
company or a subsidiary company. 
Also, according to section 2(87), subsidiary company, in relation 
to any other company (that is to say the holding company), 
means a company in which the holding company exercises or 
controls more than one-half of the total voting power either at 
its own or together with one or more of its subsidiary companies. 
401
Page 2


ANSWER OF MODEL TEST PAPER 1  
INTERMEDIATE COURSE: GROUP – I 
PAPER – 2: CORPORATE AND OTHER LAWS  
ANSWER TO PART – I CASE SCENARIO BASED MCQS 
1. (d)
2. (b)
3. (d)
4. (b)
5. (c)
6. (c)
7. (a)
8. (a)
9. (b)
10. (b)
11. (c)
12. (b)
13. (c)
14. (b)
15. (a)
ANSWERS OF PART – II DESCRIPTIVE QUESTIONS 
1. (a) (i)  According to section 2(85) of the Companies Act, 2013, small
company means a company, other than a public company, having- 
(A) paid-up share capital not exceeding four crore rupees; and
(B) turnover as per profit and loss account for the immediately
preceding financial year not exceeding forty crore rupees:
Provided that nothing in this clause shall apply to a holding 
company or a subsidiary company. 
Also, according to section 2(87), subsidiary company, in relation 
to any other company (that is to say the holding company), 
means a company in which the holding company exercises or 
controls more than one-half of the total voting power either at 
its own or together with one or more of its subsidiary companies. 
401
In the given question, Yellow Limited (a public company) holds 
2,00,000 equity shares of Resolutions Private Limited (having 
paid up share capital of 5,00,000 equity shares @ ` 10 each 
totaling ` 50 lakh). Hence, Resolutions Private Limited is not a 
subsidiary of Yellow Limited and hence it is a private company 
and not a deemed public company. 
Further, the paid up share capital (` 50 lakh) and turnover (` 2 
crore) is within the limit as prescribed under section 2(85), hence, 
Resolution Private Limited can be categorised as a small 
company. 
(ii) According to section 2 (40), Financial statement in relation
to a company, includes—
(a) a balance sheet as at the end of the financial year;
(b) a profit and loss account, or in the case of a company
carrying on any activity not for profit, an income and
expenditure account for the financial year;
(c) cash flow statement for the financial year;
(d) a statement of changes in equity, if applicable; and
(e) any explanatory note annexed to, or forming part of, any
document referred to in points (a) to (d):
Provided that the financial statement, with respect to One 
Person Company, small company and dormant company, may 
not include the cash flow statement. 
Resolution Private Limited being a small company is exempted 
from filing a cash flow statement as a part of its financial 
statements. Thus, Resolution Private Limited has not defaulted in 
filing its financial statements with ROC. 
(b) According to section 135(1) of the Companies Act, 2013, every
company having net worth of rupees five hundred crore or more, or
turnover of rupees one thousand crore or more or a net profit of
rupees five crore or more during the immediately preceding
financial year shall constitute a Corporate Social Responsibility
Committee of the Board consisting of three or more directors, out of
which at least one director shall be an independent director.
In the given question, the company does not fulfil any of the given
criteria (net worth/ turnover/ net profit) for the immediately preceding
financial year (i.e., 1.4.2022 to 31.3.2023). Hence, Pacific Limited is
not required to constitute Corporate Social Responsibility Committee
for the financial year 2023-24.
402
Page 3


ANSWER OF MODEL TEST PAPER 1  
INTERMEDIATE COURSE: GROUP – I 
PAPER – 2: CORPORATE AND OTHER LAWS  
ANSWER TO PART – I CASE SCENARIO BASED MCQS 
1. (d)
2. (b)
3. (d)
4. (b)
5. (c)
6. (c)
7. (a)
8. (a)
9. (b)
10. (b)
11. (c)
12. (b)
13. (c)
14. (b)
15. (a)
ANSWERS OF PART – II DESCRIPTIVE QUESTIONS 
1. (a) (i)  According to section 2(85) of the Companies Act, 2013, small
company means a company, other than a public company, having- 
(A) paid-up share capital not exceeding four crore rupees; and
(B) turnover as per profit and loss account for the immediately
preceding financial year not exceeding forty crore rupees:
Provided that nothing in this clause shall apply to a holding 
company or a subsidiary company. 
Also, according to section 2(87), subsidiary company, in relation 
to any other company (that is to say the holding company), 
means a company in which the holding company exercises or 
controls more than one-half of the total voting power either at 
its own or together with one or more of its subsidiary companies. 
401
In the given question, Yellow Limited (a public company) holds 
2,00,000 equity shares of Resolutions Private Limited (having 
paid up share capital of 5,00,000 equity shares @ ` 10 each 
totaling ` 50 lakh). Hence, Resolutions Private Limited is not a 
subsidiary of Yellow Limited and hence it is a private company 
and not a deemed public company. 
Further, the paid up share capital (` 50 lakh) and turnover (` 2 
crore) is within the limit as prescribed under section 2(85), hence, 
Resolution Private Limited can be categorised as a small 
company. 
(ii) According to section 2 (40), Financial statement in relation
to a company, includes—
(a) a balance sheet as at the end of the financial year;
(b) a profit and loss account, or in the case of a company
carrying on any activity not for profit, an income and
expenditure account for the financial year;
(c) cash flow statement for the financial year;
(d) a statement of changes in equity, if applicable; and
(e) any explanatory note annexed to, or forming part of, any
document referred to in points (a) to (d):
Provided that the financial statement, with respect to One 
Person Company, small company and dormant company, may 
not include the cash flow statement. 
Resolution Private Limited being a small company is exempted 
from filing a cash flow statement as a part of its financial 
statements. Thus, Resolution Private Limited has not defaulted in 
filing its financial statements with ROC. 
(b) According to section 135(1) of the Companies Act, 2013, every
company having net worth of rupees five hundred crore or more, or
turnover of rupees one thousand crore or more or a net profit of
rupees five crore or more during the immediately preceding
financial year shall constitute a Corporate Social Responsibility
Committee of the Board consisting of three or more directors, out of
which at least one director shall be an independent director.
In the given question, the company does not fulfil any of the given
criteria (net worth/ turnover/ net profit) for the immediately preceding
financial year (i.e., 1.4.2022 to 31.3.2023). Hence, Pacific Limited is
not required to constitute Corporate Social Responsibility Committee
for the financial year 2023-24.
402
(c) Section 127 of the Companies Act, 2013, requires that the declared
dividend must be paid to the entitled shareholders within the
prescribed time limit of 30 days from the date of declaration of
dividend. In case dividend is paid by issuing dividend warrants, such
warrants must be posted at the registered addresses within the
prescribed time. Once posted, it is immaterial whether the same are
received within 30 days by the shareholders or not.
In the given question, the dividend was declared on 31.07.2023 and the
dividend warrant was posted within 30 days from date of declaration of
dividend (posted on 22nd August, 2023). It is immaterial if Mr. A has
received it on 5th September 2023 (i.e., after 30 days from
31.07.2023). Hence, Mr. A cannot initiate action against the
company for failure to distribute the dividend within 30 days of
declaration.
(d) (i)  Remittance of Foreign Exchange for studies abroad: According
to the provisions of the Foreign Exchange Management Act, 1999, 
foreign exchange may be released for studies abroad up to a limit 
of US $ 250,000 for the studies abroad without any permission 
from the Reserve Bank of India (RBI). Above this limit, RBI’s prior 
approval is required. Further, proviso to Para I of Schedule III 
states that individual may be allowed remittances exceeding USD 
250,000 based on the estimate received from the institution 
abroad. In this case since US $ 140,000 is the drawal of foreign 
exchange, so permission of the RBI is not required by Mr. Pravesh. 
(ii) Under section 5 of the Foreign Exchange Management Act, 1999,
and Rules relating thereto, some current account transactions
require prior approval of the Central Government, some others
require the prior approval of the Reserve Bank of India, some are
freely permitted transactions and some others are prohibited
transactions.
This is a current account transaction, where Pravesh is required
to take approval of the Central Government for drawal of foreign
exchange for remittance of hire charges of transponders.
In all the cases, where remittance of Foreign Exchange is
allowed, either by general or specific permission, the remitter has
to obtain the Foreign Exchange from an Authorised Person as
defined in Section 2(c).
2. (a) According to section 103(1) of the Companies Act, 2013, unless the
articles of the company provide for a larger number, in case of a public 
company: 
(1) five members personally present if the number of members as on
the date of meeting is not more than one thousand,
(2) fifteen members personally present if the number of members as on
403
Page 4


ANSWER OF MODEL TEST PAPER 1  
INTERMEDIATE COURSE: GROUP – I 
PAPER – 2: CORPORATE AND OTHER LAWS  
ANSWER TO PART – I CASE SCENARIO BASED MCQS 
1. (d)
2. (b)
3. (d)
4. (b)
5. (c)
6. (c)
7. (a)
8. (a)
9. (b)
10. (b)
11. (c)
12. (b)
13. (c)
14. (b)
15. (a)
ANSWERS OF PART – II DESCRIPTIVE QUESTIONS 
1. (a) (i)  According to section 2(85) of the Companies Act, 2013, small
company means a company, other than a public company, having- 
(A) paid-up share capital not exceeding four crore rupees; and
(B) turnover as per profit and loss account for the immediately
preceding financial year not exceeding forty crore rupees:
Provided that nothing in this clause shall apply to a holding 
company or a subsidiary company. 
Also, according to section 2(87), subsidiary company, in relation 
to any other company (that is to say the holding company), 
means a company in which the holding company exercises or 
controls more than one-half of the total voting power either at 
its own or together with one or more of its subsidiary companies. 
401
In the given question, Yellow Limited (a public company) holds 
2,00,000 equity shares of Resolutions Private Limited (having 
paid up share capital of 5,00,000 equity shares @ ` 10 each 
totaling ` 50 lakh). Hence, Resolutions Private Limited is not a 
subsidiary of Yellow Limited and hence it is a private company 
and not a deemed public company. 
Further, the paid up share capital (` 50 lakh) and turnover (` 2 
crore) is within the limit as prescribed under section 2(85), hence, 
Resolution Private Limited can be categorised as a small 
company. 
(ii) According to section 2 (40), Financial statement in relation
to a company, includes—
(a) a balance sheet as at the end of the financial year;
(b) a profit and loss account, or in the case of a company
carrying on any activity not for profit, an income and
expenditure account for the financial year;
(c) cash flow statement for the financial year;
(d) a statement of changes in equity, if applicable; and
(e) any explanatory note annexed to, or forming part of, any
document referred to in points (a) to (d):
Provided that the financial statement, with respect to One 
Person Company, small company and dormant company, may 
not include the cash flow statement. 
Resolution Private Limited being a small company is exempted 
from filing a cash flow statement as a part of its financial 
statements. Thus, Resolution Private Limited has not defaulted in 
filing its financial statements with ROC. 
(b) According to section 135(1) of the Companies Act, 2013, every
company having net worth of rupees five hundred crore or more, or
turnover of rupees one thousand crore or more or a net profit of
rupees five crore or more during the immediately preceding
financial year shall constitute a Corporate Social Responsibility
Committee of the Board consisting of three or more directors, out of
which at least one director shall be an independent director.
In the given question, the company does not fulfil any of the given
criteria (net worth/ turnover/ net profit) for the immediately preceding
financial year (i.e., 1.4.2022 to 31.3.2023). Hence, Pacific Limited is
not required to constitute Corporate Social Responsibility Committee
for the financial year 2023-24.
402
(c) Section 127 of the Companies Act, 2013, requires that the declared
dividend must be paid to the entitled shareholders within the
prescribed time limit of 30 days from the date of declaration of
dividend. In case dividend is paid by issuing dividend warrants, such
warrants must be posted at the registered addresses within the
prescribed time. Once posted, it is immaterial whether the same are
received within 30 days by the shareholders or not.
In the given question, the dividend was declared on 31.07.2023 and the
dividend warrant was posted within 30 days from date of declaration of
dividend (posted on 22nd August, 2023). It is immaterial if Mr. A has
received it on 5th September 2023 (i.e., after 30 days from
31.07.2023). Hence, Mr. A cannot initiate action against the
company for failure to distribute the dividend within 30 days of
declaration.
(d) (i)  Remittance of Foreign Exchange for studies abroad: According
to the provisions of the Foreign Exchange Management Act, 1999, 
foreign exchange may be released for studies abroad up to a limit 
of US $ 250,000 for the studies abroad without any permission 
from the Reserve Bank of India (RBI). Above this limit, RBI’s prior 
approval is required. Further, proviso to Para I of Schedule III 
states that individual may be allowed remittances exceeding USD 
250,000 based on the estimate received from the institution 
abroad. In this case since US $ 140,000 is the drawal of foreign 
exchange, so permission of the RBI is not required by Mr. Pravesh. 
(ii) Under section 5 of the Foreign Exchange Management Act, 1999,
and Rules relating thereto, some current account transactions
require prior approval of the Central Government, some others
require the prior approval of the Reserve Bank of India, some are
freely permitted transactions and some others are prohibited
transactions.
This is a current account transaction, where Pravesh is required
to take approval of the Central Government for drawal of foreign
exchange for remittance of hire charges of transponders.
In all the cases, where remittance of Foreign Exchange is
allowed, either by general or specific permission, the remitter has
to obtain the Foreign Exchange from an Authorised Person as
defined in Section 2(c).
2. (a) According to section 103(1) of the Companies Act, 2013, unless the
articles of the company provide for a larger number, in case of a public 
company: 
(1) five members personally present if the number of members as on
the date of meeting is not more than one thousand,
(2) fifteen members personally present if the number of members as on
403
the date of meeting is more than one thousand but up to five 
thousand, 
(3) thirty members personally present if the number of members as on
the date of the meeting exceeds five thousand,
shall be the quorum for a meeting of the company. 
The term ‘members personally present’ as mentioned above refers to 
the members entitled to vote in respect of the items of business on the 
agenda of the meeting. 
(b) According to proviso to section 68(2) of the Companies Act, 2013,
no offer of buy-back, shall be made within a period of one year from
the date of the closure of the preceding offer of buy- back, if any.
Section 68 (8) casts an obligation that where a company completes a
buy-back of its shares or other specified securities under this section,
it shall not make further issue of same kind of shares including
allotment of further shares under section 62 (1) (a) or other specified
securities within a period of six months except by way of bonus issue
or in the discharge of subsisting obligations such as conversion of
warrants, stock option schemes, sweat equity or conversion of
preference shares or debentures into equity shares.
Keeping in view of the above provisions, the statement “the offer of
buy-back of its own shares by a company shall not be made within a
period of six months from the date of the closure of the preceding
offer of buy back, if any and cooling period to make further issue of
same kind of shares including allotment of further shares shall be a
period of one year from the completion of buy back subject to certain
exceptions” is not valid.
(c) According to section 27 of the General Clauses Act, 1897, where
any legislation or regulation requires any document to be served by
post, then unless a different intention appears, the service shall be
deemed to be effected by:
(i) properly addressing
(ii) pre-paying, and
(iii) posting by registered post.
Further, on the basis of decision taken by the apex court in case of 
Jagdish Singh vs Natthu Singh, where a notice is sent to the landlord 
by registered post and the same is returned by the tenant with an 
endorsement of refusal, it will be presumed that the notice has been 
served. 
In the given case, the Income Tax Department sent the show cause 
notice properly by a registered post at the address which was in the 
records of the department. Hence, it was a proper service of notice. 
404
Page 5


ANSWER OF MODEL TEST PAPER 1  
INTERMEDIATE COURSE: GROUP – I 
PAPER – 2: CORPORATE AND OTHER LAWS  
ANSWER TO PART – I CASE SCENARIO BASED MCQS 
1. (d)
2. (b)
3. (d)
4. (b)
5. (c)
6. (c)
7. (a)
8. (a)
9. (b)
10. (b)
11. (c)
12. (b)
13. (c)
14. (b)
15. (a)
ANSWERS OF PART – II DESCRIPTIVE QUESTIONS 
1. (a) (i)  According to section 2(85) of the Companies Act, 2013, small
company means a company, other than a public company, having- 
(A) paid-up share capital not exceeding four crore rupees; and
(B) turnover as per profit and loss account for the immediately
preceding financial year not exceeding forty crore rupees:
Provided that nothing in this clause shall apply to a holding 
company or a subsidiary company. 
Also, according to section 2(87), subsidiary company, in relation 
to any other company (that is to say the holding company), 
means a company in which the holding company exercises or 
controls more than one-half of the total voting power either at 
its own or together with one or more of its subsidiary companies. 
401
In the given question, Yellow Limited (a public company) holds 
2,00,000 equity shares of Resolutions Private Limited (having 
paid up share capital of 5,00,000 equity shares @ ` 10 each 
totaling ` 50 lakh). Hence, Resolutions Private Limited is not a 
subsidiary of Yellow Limited and hence it is a private company 
and not a deemed public company. 
Further, the paid up share capital (` 50 lakh) and turnover (` 2 
crore) is within the limit as prescribed under section 2(85), hence, 
Resolution Private Limited can be categorised as a small 
company. 
(ii) According to section 2 (40), Financial statement in relation
to a company, includes—
(a) a balance sheet as at the end of the financial year;
(b) a profit and loss account, or in the case of a company
carrying on any activity not for profit, an income and
expenditure account for the financial year;
(c) cash flow statement for the financial year;
(d) a statement of changes in equity, if applicable; and
(e) any explanatory note annexed to, or forming part of, any
document referred to in points (a) to (d):
Provided that the financial statement, with respect to One 
Person Company, small company and dormant company, may 
not include the cash flow statement. 
Resolution Private Limited being a small company is exempted 
from filing a cash flow statement as a part of its financial 
statements. Thus, Resolution Private Limited has not defaulted in 
filing its financial statements with ROC. 
(b) According to section 135(1) of the Companies Act, 2013, every
company having net worth of rupees five hundred crore or more, or
turnover of rupees one thousand crore or more or a net profit of
rupees five crore or more during the immediately preceding
financial year shall constitute a Corporate Social Responsibility
Committee of the Board consisting of three or more directors, out of
which at least one director shall be an independent director.
In the given question, the company does not fulfil any of the given
criteria (net worth/ turnover/ net profit) for the immediately preceding
financial year (i.e., 1.4.2022 to 31.3.2023). Hence, Pacific Limited is
not required to constitute Corporate Social Responsibility Committee
for the financial year 2023-24.
402
(c) Section 127 of the Companies Act, 2013, requires that the declared
dividend must be paid to the entitled shareholders within the
prescribed time limit of 30 days from the date of declaration of
dividend. In case dividend is paid by issuing dividend warrants, such
warrants must be posted at the registered addresses within the
prescribed time. Once posted, it is immaterial whether the same are
received within 30 days by the shareholders or not.
In the given question, the dividend was declared on 31.07.2023 and the
dividend warrant was posted within 30 days from date of declaration of
dividend (posted on 22nd August, 2023). It is immaterial if Mr. A has
received it on 5th September 2023 (i.e., after 30 days from
31.07.2023). Hence, Mr. A cannot initiate action against the
company for failure to distribute the dividend within 30 days of
declaration.
(d) (i)  Remittance of Foreign Exchange for studies abroad: According
to the provisions of the Foreign Exchange Management Act, 1999, 
foreign exchange may be released for studies abroad up to a limit 
of US $ 250,000 for the studies abroad without any permission 
from the Reserve Bank of India (RBI). Above this limit, RBI’s prior 
approval is required. Further, proviso to Para I of Schedule III 
states that individual may be allowed remittances exceeding USD 
250,000 based on the estimate received from the institution 
abroad. In this case since US $ 140,000 is the drawal of foreign 
exchange, so permission of the RBI is not required by Mr. Pravesh. 
(ii) Under section 5 of the Foreign Exchange Management Act, 1999,
and Rules relating thereto, some current account transactions
require prior approval of the Central Government, some others
require the prior approval of the Reserve Bank of India, some are
freely permitted transactions and some others are prohibited
transactions.
This is a current account transaction, where Pravesh is required
to take approval of the Central Government for drawal of foreign
exchange for remittance of hire charges of transponders.
In all the cases, where remittance of Foreign Exchange is
allowed, either by general or specific permission, the remitter has
to obtain the Foreign Exchange from an Authorised Person as
defined in Section 2(c).
2. (a) According to section 103(1) of the Companies Act, 2013, unless the
articles of the company provide for a larger number, in case of a public 
company: 
(1) five members personally present if the number of members as on
the date of meeting is not more than one thousand,
(2) fifteen members personally present if the number of members as on
403
the date of meeting is more than one thousand but up to five 
thousand, 
(3) thirty members personally present if the number of members as on
the date of the meeting exceeds five thousand,
shall be the quorum for a meeting of the company. 
The term ‘members personally present’ as mentioned above refers to 
the members entitled to vote in respect of the items of business on the 
agenda of the meeting. 
(b) According to proviso to section 68(2) of the Companies Act, 2013,
no offer of buy-back, shall be made within a period of one year from
the date of the closure of the preceding offer of buy- back, if any.
Section 68 (8) casts an obligation that where a company completes a
buy-back of its shares or other specified securities under this section,
it shall not make further issue of same kind of shares including
allotment of further shares under section 62 (1) (a) or other specified
securities within a period of six months except by way of bonus issue
or in the discharge of subsisting obligations such as conversion of
warrants, stock option schemes, sweat equity or conversion of
preference shares or debentures into equity shares.
Keeping in view of the above provisions, the statement “the offer of
buy-back of its own shares by a company shall not be made within a
period of six months from the date of the closure of the preceding
offer of buy back, if any and cooling period to make further issue of
same kind of shares including allotment of further shares shall be a
period of one year from the completion of buy back subject to certain
exceptions” is not valid.
(c) According to section 27 of the General Clauses Act, 1897, where
any legislation or regulation requires any document to be served by
post, then unless a different intention appears, the service shall be
deemed to be effected by:
(i) properly addressing
(ii) pre-paying, and
(iii) posting by registered post.
Further, on the basis of decision taken by the apex court in case of 
Jagdish Singh vs Natthu Singh, where a notice is sent to the landlord 
by registered post and the same is returned by the tenant with an 
endorsement of refusal, it will be presumed that the notice has been 
served. 
In the given case, the Income Tax Department sent the show cause 
notice properly by a registered post at the address which was in the 
records of the department. Hence, it was a proper service of notice. 
404
Further, refusal by current owner of house to accept the notice, will 
not amount to- that the notice was not properly served by the 
Income Tax Department. It was the duty of Mr. Rachit to update his 
address. Therefore, Income Tax Department is correct in its 
decision. 
3. (a) Under section 20 of the Companies Act, 2013 a document may be served
on a company or an officer thereof by sending it to the company or the 
officer at the registered office of the company by registered post or by 
speed post or by courier service or by leaving it at its registered office 
or by means of such electronic or other mode as may be prescribed. 
However, in case where securities are held with a depository, the records 
of the beneficial ownership may be served by such depository on the 
company by means of electronic or other mode. 
Under section 20 (2), save as provided in the Act or the rule thereunder 
for filing of documents with the registrar in electronic mode, a 
document may be served on Registrar or any member by sending it 
to him by post or by registered post or by speed post or by courier or 
by delivering at his office or address, or by such electronic or other 
mode as may be prescribed. However, a member may request for 
delivery of any document through a particular mode, for which he shall 
pay such fees as may be determined by the company in its annual 
general meeting. 
(b) According to Rule 2(1)(c) of the Companies (Acceptance of Deposits)
Rules, 2014, the following amount is not considered as deposit:
Any amount brought in by the promoters of the company by way of
unsecured loan in pursuance of the stipulation of any lending financial
institution or a bank subject to the fulfillment of following conditions:
(a) the loan is brought because of the stipulation imposed by the lending
institutions on the promoters to contribute such finance;
(b) the loan is provided by the promoters themselves or by their
relatives or by both; and
(c) such exemption shall be available only till the loans of financial
institution or bank are repaid and not thereafter.
Hence, in the instant case, the unsecured loan contributed by 
promoters of J Limited will not be regarded as deposit as the 
unsecured loan is brought because of the stipulation imposed by the 
SIDCL and the loan is provided by the promoters themselves. 
In case the entire loan obtained from SIDCL is repaid, then the 
unsecured loan provided by promoters of J Limited will be regarded as 
deposit. 
405