Due to ceaseless efforts put
in by IGF President - Shri Kirit Somaiya,
an Ordinance was promulgated by Maharashtra
Government namely, “Protection of
Interests of Depositors” ( in Financial
Establishment) has been effective since 29th
April, 1999.
Deposit:
The Act will cover all
types of Deposits received or accepted by
any person, not being State/Central Govt.
Owned/controlled Co-op, Societies &
Corporation, either in cash or in kind and
to be returned after specified period either
in cash or in kind or in form of specified
services, with or without any benefit in
form of interest, bonus, profit or in any
other form, It will cover all Corporate
and unincorporate bodies, Individual partnership
Firms, But will not cover amount raised/received
by way of -
i) Share Capital,
Debenture or Bond
ii) Partners’ Capital Contribution
iii) Scheduled Book, Co-operative
Bank or any other Banking Co,
v) In the ordinary course of business
on Security Deposit, dealership Deposit,
Earnest Money, Advance against Order for
goods or services.
vi) Unincorporated Bodies registered
under law relating to Money Lending.
vii) Subscription in respect of Chit
Fund.
viii) Any credit given be a seller
to a buyer on sales of movable / immovable
property.
Fraudulent Default in Return To Deposits:
Defaults in repayments of Deposits, or complying
with committment or promises. with malafide
intention to cause damage or loss to the
depositors shall be considered as fruaudulent
default.
Actions
(A) Punishments:
(i) Imprisonment upto six month and
fine upto Rs.1 lac to Promoter, Proprietor,
Partner, Director, Manager or any person
/ employee responsible for managing or conducting
business affairs of the defaulting organisation.
(ii) Fine upto Rs. 1 lac to defaulting
organisation.
(B) Attachment
of Property:
On complaints received regarding defaults
by the organisation, or any doubts about
the Scheme being managed in a manner detrimental
to interest of Depositors, The Government
can attach the property of the organisation
or its promotrs, partners, directors, or
member of such organisation. The Government
will have to pass such order, after recording
reasons in writing and publishing same in
Official Gazzette.
The property so attached, shall vest with
The Competent Authority appointed by the
Govenment till further order from the designed
Court. The Competent Authority will have
to apply within fifteen day from the publication
of Attachment Order, to the Designated Court.
Designated Court: Government
by notification, constitute Designated Court
in the cadre of District and Session Judge.
All the pending cases relating to interest
of Depositors shall be transferred to such
Designated Court. The Designated Court Shall
issue show Cause Notice to all those, whose
property has been attached by the Competent
Authority, to make such Notice shall also
be issued to all those who have interest
in the property so attached. The Designated
Court shall exercise all the powers, Procedures
of a Court under Civil Procedures Code,
to face objection raised by anybody, to
advance evidence to show that at the date
of attachment, he has same interest in the
property. After investigation, the Designated
Court shall approve the attachment under
on order releasing a portion of that property
from attachment or cancelling the order
of attachment.
Attachment of Property of Malafide
Transferee:
Designated Court can also attach, the property
already transfered with malafide intention
( before or after commencement of the, ordinance),
at lower rate, and recover the proper value
from such transferee.
Appeal: The order of the Designated
Court is appealable before High Court within
60 days by any agrieved party.
Jurisdiction of Designated Court:
All pending cases in any other court, before
enactment of this Ordinance shall be transferred
to the Designated Court. No Court, including
The Court Constituted under Presidenery
Towns Insolvency Act or Provincial Insolvency
Act, Shall have jurisdiction in respect
of any matter which the provision of this
Ordinance apply. Only Designed Court shall
have jurisdication in such matter.
The Government of Maharashtra has designated
the seven Courts to address the Grievances
and complaints of the investors in these
matters.
