M/s. NRS Biochemicals Limited is planning to buy-back of its shares during the financial year 2023-24 but the company has defaulted in the payment of term loan and interest thereon to its bankers and not filed the annual

Circumstances prohibiting buy-back [Section 70(1) of the Companies Act, 2013] No company shall directly or indirectly purchase its own shares or other specified securities through any subsidiary company including its own subsidiary companies; through any investment company of group of investment companies; or if a default, is made by the company, in the repayment of deposits accepted either before or after the commencement of this Act, interest payment thereon, redemption of debentures or preference shares or payment of dividend to any shareholder, or repayment of any term loan or interest payable thereon to any financial institution or banking company: However, the buy-back is not prohibited, if the default is remedied and a period of three years has lapsed after such default ceased to subsist. According to section 70(2) No company shall, directly or indirectly, purchase its own shares or other specified securities in case such company has not complied with the provisions of sections 92 (Annual Return), section 123 (Declaration of Dividend), section 127 (punishment for failure to distribute dividend) and section 129 (Financial Statement). Therefore, NRS Bio Chemicals Limited cannot buy back its share until the expiry of cooling period (3 years) after the default is remedied since it has defaulted in repayment of loan and not filed the annual return for the financial year 2022-23.