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  1. #1
    Join Date
    Dec 2009
    Posts
    1

    Default Interest on Security Deposit

    A Public Limited Company insists its employees to furnish a sum of Rs. 100000 as security deposit (refundable after 5 years of service) for performance of their employment agreement. The said amount was deposit by company in the manner as provided in section 417 of companies Act 1956, and also earned interest thereon.
    Question: -
    1) Now, whether the amount of said security deposit, on maturity, needs to be returned to employees with interest?
    2) What is the effect, if comany has taken undertaking from the employees that interest will not be returned? In this case, whether company can retain the intetrest earned by it on deposit of said secrutiy deposit under section 417 of Companies Act 1956?

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Interest on Security Deposit

    This is a U.S. forum, and your question makes it appear that you're in India. I suggest inquiring with a forum or lawyer who handles Indian legal matters.

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