DELHI CLOTH AND GENERAL MILLS, ETC. vs UNION OF INDIA, ETC.

The Supreme Court upheld the constitutional validity of Section 58A of the Companies Act, 1956 and Rule 3A of the Companies (Acceptance of Deposits) Rules, 1975, which mandates companies to deposit 10% of maturing deposits with a Scheduled bank or in government securities. The Court ruled that this requirement is a legitimate condition for inviting deposits and serves to ensure repayment to depositors, thus not violating Articles 14 and 19(1)(g) of the Constitution. The petitions challenging these provisions were dismissed, affirming the regulatory framework's purpose in protecting depositors.