LexThe Assam Protection of Interests of Depositors (In Financial Establishments) (Amendment) Act, 2013
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Registered No .-768/97
THE ASSA M G AZETTE
~~Gt
EXTRAORDINARY
ett~ <fS~\fi<iil ~ ~
PUBLISHED BY THE AUTHORITY
'if~ 184 fWxt~. ~*1<1~. 14 ~" 2013, 24 "1~~. 1935 ~)
No . 184 Dispur, Tuesday, 14th May, 2013, 24th Baisakha, 1935 (S.E.)
GOVERNMENT OF ASSAM
ORDERS BY THE GOVERNOR
LEGISLATIVE DEPARTMENT : : : LEGISLATIVE BRANCH
NOTIFICATION
The 14th May, 2013
No. LGL.19/2013/5.- The following Act of the Assam Legislative Assembly
which received the assent of the Governor is hereby published for general information.
ASSAM ACT NO. XI OF 2013
{Received the assent of the Governor on 8th May, 2013)
THE ASSAM PROTECTION OF INTERESTS OF DEPOSITORS
(IN FINANCIAL ESTABLISHMENTS) (AMENDMENT) ACT, 2013
•
1096 THE ASSAM GAZETTE~ EXTRAORDINARY, MAY 14, 2013
Preamble
Short title,
extent and
commencement
Substitution of
section 2
"Definitions
1. (1)
AN
ACT
to amend the Assam Protection oflnterests of Depositors
(in Financial Establishments) Act, 2000.
Whereas it is expedient to amend the Assam Protection of
Interests of Depositors (in Financial Establishments) Act,2000,
hereinafter referred to as the principal Act;
It is hereby enacted in the Sixty-fourth Year of the
Republic oflndia as follows:-
J
This Act may be called the Assam Protection of Interests of
Depositors (in Financial Establishments) (Amendment) Act,
2013.
(2) It shall have the like extent as the principal Act.
(3) It shall come into force at once.
2. In the principal Act, for the existing section 2, the following
shall be substituted, namely :-
2. In this Act, unless the context otherwise requires,-
(a) "Competent authority" means the authority appointed by the
Government under section 4;
(b) "Deposit" means and shall be deemed always to have included
any receipt of money or acceptance of any valuable
commodity by any Financial Establishment to be returned after
a specified period of time or otherwise. either in cash or in
kind or in the form of a specified service with or without any
benefit in the form of interests, bonus, profit or iri any other
form, but does not include,-
(i) amount raised by way of share capital or by way of
debenture, bond or any other instrument covered under the
guidelines given and regulations made, by the Securities and
Exchange' Board of India, established under the Securities and
Exchange Board of India Act, 199~;
(ii) amounts contributed as capital by
partners of a firm;
(iii) amounts received from a Scheduled Bank or a Co
operative Bank or any other banking company as defined in
clause ( c) of section 5 of the Banking Regulation Act, 1949;
Assam
Act
No.VI of
2000
Central
Act 15
of1992
Central
Act· 10
of 1949
THEASSAM GAZETTE, EXTRAORDINARY, MAY 14, 2013
(iv) any amount received from the Industrial Development
Bank of India, or a State Financial Corporation, or any
financial Institution specified in or under section 4 A of the
Companies Act, 1956, or any other institution that may be
specified by notification by the Government in this behalf;
(v) any amount received from an'individual or a firm or an
association of individuals, registered under any enactment
relating to money lending which is for the time being in force
in the State of Assam; and
(vi) any amount received by way of subscription in respect of a
Chit;
Explanation I.- "Chit" has the meaning as assigned to it in
clause (b) of section 2 of the Chit Funds Act, 1982;
Explanation II.- ·Any credit giv~n by a seller to a buyer on the
sale of any property (whether.movable or immovable) shall not
be deemed to be deposit for the purposes of this clause;
(c) "Financial Establishment" means an individual or an
association of individuals or a finn, or a company registered
under the Companies Act, 1956 and carrying on the business
of receiving.deposits under any scheme or arrangement or in
any other manner and includes the Non Banking Financial
Companies (NBFCs) as defined in section 45 l(c) and (t) of
the Reserve Bank of India Act 1934, but does not include a
corporation or a co-operative society owned or controlled by
any State Government or the Central Government, or a
banking company as defined Under section S(c} of the Banking
Regulation Act, 1949.
(d) "Depositor" means a person who has made deposits with
Financial Establishment;
(e) "Government" means the State Government of Assam;
(f) "any other officer authorized by Government in order to carry
out the purposes Of this Act" means an officer empow~red by
the Government, by notification in the Official Gazette, in
order to carry out the purposes of this Act;
(g) "the Deputy Commissioner" means the Deputy Copunissioner
and District Magistrate of the District;
(h) "the Superintendent of Police of the District" means the Senior
most police officer In-Charge of the Police District and shall be
deemed to have. included his sub-ordinate officers;
(i) "the Bureau of Investigation (Economic Offences)" means the
Bureau of Investigation (Economic Offences) under the
Government of Assam;
G) "Competent Regulatory Authority" means and includes
Reserve Bank of India (RBI), Securities and Exchange Board
of India (SEBI), Insurance Regulatory and Development
Authority (IRDA), Registrar of Companies (ROC), Registrar
of Cooperative Societies, Government of Assam or any other
Authority empowered by the Central or State Government
from time to t@e by a notification in the Official Gazette;
Central
Act 1
1956
Central
Act40
of 1982
Central
Act 1
1956
Central
ActNo.2
of1934
Central
Act 10
of 1949
1097
1098 THE ASSAM GAZETTE, EXTRAORDINARY, MAY 14, 2013
Substitution of
section 3.
"Attachment of
properties on
default of
return of
Cleposits.
(k) "Competent Court" means the Court of District and Sessions
Judge of Competent Jurisdiction or the Special Court
constituted under this Act."
(a)
(b)
(c)
(d)
3. In the principal Act, for th~ existing section 3, the following
shall be substituted, namely :-
3. Notwithstanding anything contained in any other law for the
time being in force,-
(i) where, upon complaint received from any depositor or
any report from the Deputy Commissioner or an officer not
below the rank of Superintendent of Police of the Bureau of
Investigation .(Economic Offences) of the respective
jurisdiction or otherwise, that any Financial Establishment
has-
received deposits from public by indulging in a fraudulent
act; or
failed to return the deposit after maturity or on demand by
depositor; or
failed in payment of interest or other assured benefit; or
failed to provide the service against such deposit; and/or
(ii) Where the Government has reason to believe that any
Financial.Establishment is acting in a calculated manner with
an intention to defraud the depositors, and if the Government
is satisfied that such Financial Establishment is not likely to
return the deposits;
The Government may, in order to protect the
interests of the depositors of such Financial Establishment
pass an ad~interim order · by publishing it in the Official
Gazette, attaching the money or other property alleged to
have been procured either in the_ name of the Financial
Establishment, or in the name- of any other person froin and
out of the deposits collected by the Financial Establishment,
or if it transpires that such money or other property is not
available for attachment or not sufficient ·for repayment of
the deposits, such other property of the said Financial
Establishment or the promoter, manager or member of the
said Financial Establishment, as the Government may think
fit, transfer the control over the said money or property to the
Competent Authority.
Explanation 1 :- For the purposes of clause (i) any Financial
Establishment receiving deposits from public in violation of
any law for the time being in force or without valid
registration/license/pennission from a competent Regulatory
Authority or dresses, camouflages its deposit taking in the
form of any other business or activity shall be deemed to be
indulging in a fraudulent act.
,_,,
THE ASSAM GAZETTE, EXTRAORDINARY, MAY 14, 2013 1099
Insertion of
new section 3A
"Authorities to
receive
complaints and
cause inquiry
and
investigation
Explanation 2 :- The expression "Government" for the
purpose of this section shall mean and include the Finance
Department of the Government of Assam."
4. In the principal Act. after the existing section 3, the
following new section 3A shall be inserted, namely:-
3A(l) Notwithstanding .any thing contained in sectjon 3, any
person or public in general aggrieved. against any Financial
Establishment receiving deposits from public may file a
complaint in writing specifically mentioning the nature of
allegations against the Financial Establishment before,-
(i) the Deputy Commissioner or an officer not below the
rank of the Superintendent · of Police of the Bureau of
Investigation (Economic Offences) of the respective
Jurisdiction, who shall be competent to receive the
complaints and cause enquiry and/or investigation of. the
complaints so received in respect of any fraudulent act as
referred to under section 3(i);
(ii) an officer not below the rank of Circle Officer of the
concerning Revenue Circle, the Superintendent of Police of
the District or the Officer-in-Charge of the Police Station
concerned, as tbe case may be, . who shall forward the
complaint to the Deputy Commissioner of the District within
seven days of the receipt of the complaint.
(2) Notwithstanding anything contained in section 3 and sub
section (1) of this section, the Circle Officer of the Revenue
Circle or the Superintendent of Police of the District or the
Officer-in-Charge of the Police Station within their
respective jurisdictipn , may suo-moto file a complaint with
the Deputy Commissioner against any Financial
Establishment which according to informat!on received by
him has committed any one or more of the acts mentioned
under section 3(i).
(3) On receipt of the complaints, the Deputy Commissioner may
make such further enquiry/enquirie_s as may be necessary
within his jurisdiction or outside his jurisdiction with the
assistance of the District Administration of the concerned
District for the purpose of arriving at a conclusion with
respect to the complaint made against the Financial
Establishment.
(4) In making such enquiries, the Deputy Commissioner may
take necessary assistance of any officer sub-ordinate to him
for the purpose of preparation of the enquiry report.
(5) The Deputy Commissioner or an officer not below the rank
of Superintendent of Police of the Bureau of Investigation
(Economic Offences) shall forward his report together with
the complaint to the Government in all cases within 90
(ninety) days from the date of receipt of the complaint.
1100 THE ASSAM GAZETTE, EXTRAORDINARY, MAY 14, 2013
Insertion of
new section 3B
"Offences to be
cognizable and
non-bailable
Insertion of
certain the
words in the
Act
Substitution of
sections
"Punishment
for default in
repayment of
deposit and
interests
(6) Notwithstanding anything contained in sections 3 and 3A,
the Deputy Commissioner of the concerned District, on
receipt of information against any Financial Establishment as
regards commission of any fraudulent activities mentioned in
section 3 (i), may suo·moto, cause an enquiry and/or
investigation of s1,1ch fraudulent activities and submit a report
to the Government for necessary action.
(7) Notwithstanding anything contained in sections 3 and 3A,
the Government may suo-moto or on receipt of any ·
complaint under section 3(i) may cause enquiry and/or
investigation into the complaint by the Deputy
Commissioner of the concerned District or cause enquiry
and/or investigation of the complaint or fraudulent
transaction referred to in section 3(i) through the Bureau of
Investigation (Economic Offences) or through any other
Investigation Agency.;'
5. In the principal Act, after section 3A so inserted, the
following new section 3B shall be inserted, namely:-
3B
6.
7.
Any offence committed under this Act shall be cognizable Central·
and non-bailable within the meaning of the Code of Criminal Act no 2
Procedure, 1973. of 1974
In the principal Act, after the words "District and Sessions
Judge" wherever they occur in the Act, the words and
punctuation mark "or the Special Court constituted under
this Act, ·as the case may be," shall be inserted.
In the principal Act; for the existing section 5, the following
shall be substituted, namely :-
5. Notwithstanding anything contained in Chapter II, any
Financial Establishment which,- (i) defaults in repayment of
di;lposit on maturity along with any benefit in the form of
interest bonlis, profit or in any other form as promised; or (ii)
fails to render service as assured, again$t the deposit; or (iii)
is found indulging in a fraudulent act during business
operation, every person including the promoter partner,
director, manager or any other person or an employee
responsible for the management or conduct of the business or
affairs of such Financial Establishment or any person
abetting the commission of such acts by the Financial
Establishment s.tiall, on conviction, be punished with
imprisonment for a term which may extend to ten years and
with fine which may extend to five lakh rupees and such
Financial Establishment shall also be liable for a fine which
may extend to 5 lakh rupees :
Provided that in the absence of special and
adequate reasons recorded in the judgment of the Court, the
imprisonment shall not be for less than 5 years and the fine
shall not be less than two lakh of rupees .
.
Explanation' I. For the purposes of this section, a Financial
Establishment shall be deemed to have committed a default
fraudulently or failed to render-specific service fraudulently,
if it,-
• . ...y ·
/
J
THE ASSAM GAZETTE, EXTRAORDINARY, MAY 14, 2013 1101
Insertion of new
section 5A
"Mandatory
disclosure and
punislunent for
non-compliance
8.
SA.
(I)
(i) commits default in repayment of such deposit with such
benefits in the form of interest, bonus,. profit or in any other
form as promised or fails to render any specified service
promised against such deposit; or
(ii) fails to render any specific service agreed against the
deposit with an intention of causing wrongful gain to one
person or wrongful loss tO another person ; or
(iii) commit$ such defaults due to its inability arising out of
impracticable or commercially not viable promises made while
accepting such deposit or arising out of deployment of money
or assets acquired out of the deposits in such a manner as it
involves inhererit risk in recovery of the same when needed; or
(iv) commits a fraudulent act as mentioned in Explanation I. of
section 3.
Explanation II:- For the purposes of this section any Financial
Establishment shall be deemed to be indulging in fraudulent
act, if it receives deposits from the public in the manner as
me_ntioned in Explanation 1 of section 3 ...
In the principal Act, after the existing section 5, the following
new section 5A shall be inserted, namely :-
(a) Before starting operation in the State. of Assam, every
Financial Establislunent shall intimate the Deputy
Commissioner of the District about the details of its business
under his local jurisdiction indicating, with supporting
documents, the registration/ permission/ sanctions obtained
from the Authorities l~e the Securities and Exchange Board of
India (SEBI) or the Reserve Bank of India (RBI) or any other
Competent Regulatory Authority of Central or State
Government reqU:ired: under the relevant law for the time being
in force in such form and in such manner, as may be
prescribed by the State Government and obtain his No
Objection .
(b) While giving his No Objection under sub-section (1) (a),
· the Deputy Cqmmissioner, inter a/ia, shall satisfy himself on
the adequacy of the capital base of the Financial
Establislunent, its business model and sustainability of its
business . For the purpose of satisfying himself regarding
capital adequacy of the Financial Establishment, the Deputy
Commissioner may call for any other document which he, in
his judgment, considers necessary for arriving at an objective
~onclusion.
(c) Before giving his No-Objection under sub-section (1) (a),
the Deputy Commissioner shall also obtain a report from the
Superintendent of Police having jurisdiction and for this
purpose the Superintendent of Police shall cause such enquires
/verifications of the Financial Establishment and the persons
associated with it in order to ascertain their genuineness or
otherwise, previo~ criminal conduct or acts, if any, and
panuneters relevant thereto as per existing laws.
1102 THEASSAMGAZETTE, EXTRAORDINARY, MAY 14, 2013
(2) Before starting operation in Assam, every Financial
. Establishment incJuding :those operating on-line through
Internet or any other electronic/print media or any other
means, shall obtain a trade license from the competent Local
Body/Authority under wh9se local jurisdiction the
establishment intends to conduct its business operations and
no Local Body/ Authority shall issue such trade license to the
Financial Establishment without receipt of the No Objection as
per sub-section (1) from the Deputy Commissioner of that
particular District within which the Local Authority is ·
empowered.
(3) In case of any existing Financial Establishment as on the date
of enactment of this Act, the details mentioned in sub - section
(1) (a) shall be intimated to the Deputy Commissioner of the
concerned District where the Financial Establishment has been
perfonning its business operations within 30 days of the
co.mmencement of this Act and the requirements under sub
sections (1) (b) and (2) shall be complied with.
(4) Every Financial Establishment shall file a monthly statement .
about its business transaction in that local area in such form
and in such manner, as may be prescribed by the Government
to the'Deputy Commissioner of the District under whose local
jupsdiction the Financial Establishment is conducting its
business operations along with a copy of the periodical
statement Which is filed to the SEBI or, as the case may be,
RBI or any other Competent Regulatory Authority of Central
or State Government.
(5) The Deputy Commissioner of the District under whose local
jurisdiction the Financial Establishment is conducting its
business operations or any other officer authorized by
Government may,·~ any time, direct any Financial
Establishment carrying on business in the area of juri$diction
of the Competent Authority to furnish in such form, at such
intervals and within such time, such other statement or
information relating to or cormected with the deposits received
by it, as may be specified.in a general or a special order.
(6) The Deputy Commissioner of the District under whose local
jurisdiction the Financial Establishnlent is conducting its
business operations or any other officer authorized by the
Deputy Commissioner on his behal~ or any other officer
authorized by the Government in order to carry out the
purposes of this Act shall have power to visit the office
premises or other places of any Financial Establishment
operating in the State to check the books of account and other
documents to ensure that the business of deposit taking is
being conducted as per relevant law with permission or
sanction of the authority empowered by that law or that such
business is not dressed in any form for misleading or cheating
the depositors.
(7) The Deputy Commissioner of the District under whose local
jurisdiction the Financial Establishment is conducting its
business operations or any other officer authorized by the
Deputy Commissioner on his behalf or any other officer
authorized by the Government in order to carry out the
...
·J
THEASSAMGAZETFE,.EXTRAORDINARY, MAY 14, 2013
purposes of this ;\ct shall have power to enter and search any
premises where it' has reason to believe that any register, book,
record, paper, application, infonnation in electronic storage
and retrieval device or medium, instrument or proceedings are
kept and to inspect them and to take such notes and extracts as
it may deem necessary. Every person having in his custody or
maintaining such register,, bc;>ok, record, paper, application,
instrument or proceedings shall at all reasonable times produce
or permit the Competent Authority or any other officer
authorized by the Government to inspect them and to take
notes and extracts as it may deem-necessary and if necessary
seize and impound them :
Provided that no residential accommodation (not being
a place of business-cum-residence) shall be so entered into and Central
searched except on the authority of a search warrant issued by Act 2
a Magistrate having jurisdiction over the area, and all searches of 1974
under this section shall, so far as may be, made in accordance
with the provisions of the Code of Criminal Procedure, 1973.
(8) For failure to furnish the information or statement under sub
sectioJJ. (1),(2), or (3) or furnishing a wrong or misleading
statement, or refusal to produce or pennit inspection of
records/documents, etc., as required under sub-section (4) and
( 5), the Deputy Commissioner of the District under whose
local jurisdiction the Financial Establishment is conducting its
business operations, if satisfied, inay after giving reasonable
opportunity to the Financial Establishment in accordance with
law, impose a fine of up to Rs. 100000/~ (Rupees one lakh) for
such every default.
(9) In order to prevent continuation of such fraudulent act or
default or non cooperation at the time of inspection with
reference to the foregoing provisions or on detection by the
inspecting officer that such business is not being conducted as
per relevant law with pennission or sanction of the authority
empowered by that law or such business is dressed in any form
for misleading or cheating the· depositors, the Government
·basing on the report oftbe Deputy Commissioner of the
District may, pass such interim ord~r as if may consider
appropriate to restrain that establishment from operating in
that area, freeze the bank accounts and restrain it from sale,
transfer or alter any moveable or immoveable property of that
establishment pending confirmation by the Competent Court
after making an application by the Competent A~thority under
section 4 (iii).
(I 0) The fine money imposed under sub-section (8) if not paid
within the time fixed in the order may be recovered as an
arrear of land revenue.
(11) Any Financial Establishment, aggrieved by the order of the
Government, may file their objection before the Competent
Court while hearing the application made by the Competent
Authority under section 4 (iii). Such objection filed by the
aggrieved Financial Establishment shall be heard by the
Competent Court under section 4 (iii) while decided the matter
1103
1104 THEASSAMGAZETTE, :EXTRAORDINARY, MAY 14, 2013
Amendment of
section 6
Substitution of
section 14
"Act to override
other laws
Insertion of new
sections 15 and
16.
"Protection of
action taken in
good faith
Power to remove
difficulties
9.
of and interim order of attachment made by the ·oovenunent
under sections 3 and 5A (9)."
In the principal Act, in section 6, after clause (i), the following
new clauses (ii) and (iii) shall be inserted and the existing
clauses (ii) and (iii) shall be re-numbered as clauses (iv) and
(v) respectively, namely :•
"(ii) For the purpose of speedy disposal of cases under this
Act, the Government may, with the concurrence of the Chief
Justice of the Gauhati High Court, by notification, constitute
one or more Special Courts consisting of a single judge not
below the rank of a District and Sessions Judge or Additional
District and Sessions Judge for such area or areas or for such
class or cl.asses of cases as may be specified in the notification.
(iii) while trying cases by the Special Court under this Act, it
shall exercise the powers, functions and jurisdiction as are
, available to a District and Sessions Judge of the competent
jurisdiction."
10. In the principal Act, for the existing section 14, the following
shall be substituted, namely :-
14. Notwithstanding · anything to the contrary contained in any
other law for the time being in force enacted by the State
Legislature and the Rules framed thereunder, the provisions of
this Act shall have overriding effept."
11. In the principal Act, after section 14, the following new
sections l5 and 16.shall be inserted and the existing section 15
shall be re-numbered as section 17, namely:-
15. No suit or other proceeding shall lie against the Government
or the authorized officer or Com,petent Authority orJm officer
or employee of the Government for anything, which is in good
faith done or indented to be done wider this Act.
16. If any difficulty arises in giving effect to any provisions of this
Act, the Government may, by an order, do anything not
inconsistent with the provisions of this Act, wfrich appears to
it to be n~essary to remove such difficulty."
MOHD. ABDUL HAQUE,
Commissioher and Secretary to the Govt. of Assam,
Legislative Department, Dispur.
Guwahati :- Printed and Published by the Dy. Director (P & S), Directorate of Ptg. & Sty. Assam, Guwahati-21.
Ex G-!IEette No. 367 - 300 + 600 - 14 - 5 - 2013.