Harsh is a promoter director of Himmat Pvt. Ltd. He borrowed some funds from his friend for a certain purpose but the same is lying idle at present. Thus, he plans to give loan to the company for working capital needs. H

According to the section 2(31) of the Act read with Rule 2(1)(c) of Companies (Acceptance of Deposits) Rules, 2014, 'deposit' includes inter alia any receipt of money by way of deposit or loan or in any other form by a company, but does not include- Rule 2(1)(c) (viii)- any amount received from a person who, at the time of the receipt of the amount, was a director of the company or a relative of the director of the private company. Provided that the director of the company or relative of the director of the private company, as the case may be, from whom money is received, furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others and the company shall disclose the details of money so accepted in the Board's report. In the given case, Harsh has borrowed money from his friend. If he gives the same borrowed money to the company, he cannot give declaration in writing under the above sub rule and hence, if he does so, it will be in violation of the Act. Rule 2(1)(c)(xiii) 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 fulfilment of the following conditions:- (a) the loan is brought in pursuance of the stipulation imposed by the lending institutions on the promoters to contribute such finance; and (b) the loan is provided by the promoters themselves or by their relatives or by both; and (c) the exemption under this sub-clause shall be available only till the loans of financial institution or banks are repaid and not thereafter. Thus, loan given by Harsh to Himmat Pvt. Ltd. will not be considered as Deposit if the loan satisfies the conditions as per rule 2(1)(c)(xiii) of the Companies (Acceptance of Deposits) Rules, 2014.