Brown Ltd. committed certain defaults in repayment of deposits. Subsequently, the said defaults were remedied and a period of 30 months has lapsed after such defaults ceased to subsist. Brown Ltd. desires to purchase its

Under Section 70 of the Companies Act, 2013, no company shall directly or indirectly purchase its own shares or other specified securities under certain circumstances. One such prohibition is 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. In the given case, Brown Ltd. has remedied the defaults, but only 30 months have passed since the defaults ceased to subsist. According to Section 70, a period of three years (36 months) must have lapsed after the default ceased to subsist. Therefore, Brown Ltd. is not entitled to proceed with the proposed buy-back of shares as it has to wait for 6 more months to complete the mandatory 36-month period.