LexThe Chhattisgarh Protection of Depositors Interest Act, 2005
Chhattisgarh · state statute
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CHHATTISGARH ACT
(No. 24of2015)
€fafl~•I~ ;);~~ <ITli~c'lm 311~!111:!~Fl,
~mcio . ~~-
THE CHHATTISGARH PROTECTION OF DEPOSITORS
INTEREST ACT, 2005
TABLE OF CONTENTS
Clauses:
I. Short title and comm encement.
2. Definitions.
3. Act not in derogati on of any law
4. Special Court.
5. Competent Authority.
6. Intimation of business.
7. Attac hment of properties on defa ult of return of depos its. Power of Specia l Court regard ing attac hment.
8. Attachment of prope rty of malafide transferees.
9. Security in I ieu of attachment.
IO. Punishment for defaults by financial esta blishment.
11 . Facto rs to be considered for imposing fine.
12. Awarding of compensation.
13. Procedure and powers of Specia l Court regardi ng offences .
14. Special Public Prosec utor.
15. Anticipa tory bail not to be granted.
16. Appea l.
17. Power to make rules.
18. Protection of Action taken in good faith.
19. Power to remove difficulty.
792 (6)
CHHATTI SGARH ACT
(No. 24 of2005)
THE CHHATT ISGARH PROTECTION OF DEPOSITORS
INTEREST ACT, 2005
An Act to protect the deposits made by the public in the financial establishment and
matters connected therewith or incidental thereto.
Be it enacted by the Chhattisgarh Legislature in the Fifty sixth Year of the Republic
oflnd ia as follows :-
Short title a nd I. (1) This Act may be called the Chha ttisgarh Protection of Depositors ' Interest
Act, 2005. co mmencem e nt.
Defi nit ions . 2.
Act not in derogation 3.
of any law.
(2) It sha ll come into force from the date of its publication in the Official Gazette.
In this Act, unless the context otherwise requires,-
(a) "Ch ief Justice " means Chie f Justice of the High Court ofChhatt isgarh.
(b) "State" mean s State of Chhattisga rh.
(c) "Sta te Government " means State Governme nt ofChhatt isgar h.
(d) "Competent author ity" mean s the authority appointed under Section 5 of the
Act;
(e) " Deposit " means "depos it" as defined in Sect ion 45- 1 (bb) Reser ve Bank of
India Act, 1934 (No. 2 of 1934)
(f) " Depositor " means person who makes depos it with company; and includes
heir, legal representat ive, adm inistrato r or ass ignee of the deposito r.
(g) "D istrict Magistrate" means person appo inted as district magistrate under
Section 20 ofThe Code of Crim inal Procedure , 1973 (No. 2 of 1974).
(h) "Financial estab lishment" mean s an individual , an association of individuals ,
firm or compan y incorporated under the Companies Act, 1956 ( I of 1956)
rece iving depo sits under any scheme or arrangem ent or in any other manner
but does not include, Corpora tion or Co-operat ive Socie ty owned or
contro lled by the State Government or the Central Governme nt, or Bankin g
Company as defined under Section 5 of the Bank ing Regula tion Act, 1949
(No. IO of 1949).
(i) "Fraudulent default" means any financial establ ishment , which fraudulently
defa ults any repayment of depos its on maturity and/or any benefit in the form
of interest , bonus, profit or dues in any other form as promised or on maturit y
or fraudul ently fails to render serv ices as assured agai nst the depo sit.
0) "Special Court" means the spec ial court constituted under Section 4 of the
Act.
The provisions of the Act shall be in addition to and not in derogat ion of any other law
for the time being in force .
4.
5.
6.
7.
792 (7)
(i) State Government in consultation with the Chief Justice may be notification in Specia l Co urt.
the offic ial gazette notify as many spec ial courts as may be necessary for
such area or areas for trial of cases under the Act.
(ii) A person shall not be qualified to act as judge in spec ial court unless he is a
session's judge or additiona l sessio n's judge under Code of the Criminal
Procedure, 1973 (No. 2 of I 974).
The State Government may, by notification, appoint any authority not below the rank
of a District Mag istrate as competent authority.
(1) Every financial establishment already carrying on its business in the area of
jurisdiction of the compe tent authority, shall intimate the competent
authority about its business within two months from the commencement of
the Act.
(2) No financial estab lishment sha ll commence its business in the area of
jurisdiction of the competent authority without prior intimation.
(3) The financial estab lishment shall file all such copies of periodica l stateme nts
to the competent authority, which are required to be filed under the law to
supervisory authorities including Securities and Exchange Board of India
(SEBI) and Reserve Bank of India (RBI).
(4) The competent authority at his discretion may at any time direct any financial
establishment carryi ng on business in the area of jurisd iction of the
competent authority to furnish in such form, at such interva ls ans within such
time, such statements, information or particulars relating to or connected with
deposits received by the establishment, as may be specified in genera l or
specia l order.
(5) Who ever contravenes the provisions of this sect ion shall be punished with
imprisonment , which may extend to three months or with fine, which may
extend to five thousand rupees or with both and financial establishment shall
also be liable to pay fine, which shall not be less than twenty five thousand
rupees but may extend to fifty thousand rupees.
(1) Where the competent authority is satisfied,
(i)
(ii)
Upon complaints received from depositors or otherwi se, that any
financial establishment has fraudulently defaulted.
That any financial establ ishment is acting in a calculated manner
with an intention to defraud the depositors and such financial
establishm ent is not likely to return the deposits , the competent
autority may, in order to protect the interests of the depositors of
such financial establishment, pass an ad-interim order 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 or establishment, or if it appears that such money or other
property is not available for attachment or not sufficient for
repayment of the depos its, such other property of the said
financial establishment or the promot er, partner, director,
manager or member of the said financial esta blishment, as the
competent authority may think fit and publish the order in local
newspaper of the area.
(2) The competent authority shall apply within fifteen days from the date of the
order to the spec ial court for making the ad-interim order or attachment
absolute.
Competent
authority .
Intimation
bu siness.
Attachment
of
of
prope rties on
defa ult of return of
deposits & power of
special court
regarding
attachmen t.
792 (8)
Attachment of 8.
property of malalide
transferees .
(3)
(4)
(5)
(6)
(7)
(8)
(9)
The competent authority may also make an application to any specia l court or
designated court or any other judicial forum established or constit uted or
entrusted with the powers by any other State Governmen t for adjudicating
any issue or subject pertaining to any money or assets of a financial estab
lishment under any simila r enactment in respect of money or property or
assets belonging to or ostensibly belonging to a financial esta blishment or
any person notified under the Act situated within the territorial juri sdiction
of that special court or designated court or any other judicial forum as the
case may be, for passing appropriate orders to give effect to the provisions
of the Act.
Upon receipt ofan application under subsection (2) of sect ion (7), the special
court shall issue show cause notice accompanied by copy of application filed
by the competent authority to the financial establish ment or any other person
whose property is attached that why the order of attachment should not be
made absolute.
Any person having any interest or claim in the property attached under
sub-section ( I) may apply to the special court within 45 days of the order of
attachment for their claim. after receiving the application /objection the
spec ial court shal l, after giving an opportunity of being heard to the
applicants and the compete nt authority, may make such order as deem fit.
For hearing ofapplication /object ion provision of the Code of Civi l Procedure,
1908, shall be applicable.
If no cause is shown and no objections are made on or before the specified
date , the specia l court shal I forwith pass an order making the ad-interim order
of attachment absolute.
The special court may at the time of passing the final order pass an order of
attachment absol ute or in part. In making such order the spec ial court shall
not relea se such part of property so attached as is necessary for repayment to
depositors .
The special court may, on application by the competent authority , pass such
order or issue such direction as may necessary for sa le of property attached
and for distribution among the depositors of the money realised from such
sale .
(IO) Where an app licatio n is made by any person duly author ised or specified by
any other State Government under similar enactment empowering him to
exercise control over any money or proper ty or assets attached by that State
Government, the special court shall exercise all its powers , as if such an
application were made under the Act and pass appropriate order or direction
on such application , so as to give effect to the provisions of such enactmen t.
(I) Where the assets availab le for attachment of a financia l establishment or
other person referred to in section 7 is insufficient for repayment to
depositors and where the spec ial court is satisfied by affidavit or otherwise
that there is reasonable cause for believing that the sa id financial
establishm ent has transferred before or after the commencement of the Act
any prop erty otherwise than in good faith not for consideration the spec ial
court may, by notice , require any transferee of such property whether or not
he has recei ved the property directly from the said financial establishment, to
show cause why so much of the transferees property , as is equivale nt to the
proper value of the property tran sferred should not be attached.
9.
IO.
I 1.
12.
13.
14.
15.
16.
17.
18.
19.
(2) Where the said transferee fails to appear or show cause on the specified date,
or where after investigation in the manner provided in sub-section (5) to (9) of
section (7), the special court is satisfied that the transfer of the property to the
said transferee was not in good faith and not for consideration, the special
court shall order the attachment of so much of the said property of the
transferee, as is in the opinion of the special court, equivalent to the proper
value of the property transferred.
Specia l court may on application on behalf of a financial establishment or any person
referred to in sub-section (I) of section (7) pass an order in writing to permit furnishing
of security in lieu of attachment in appropriate case.
Where any financial establishment fraudulently defaults or any financial
establishment acts in a calculated manner with an intention to defraud the depositors;
every person including the promoter, partner, director, manager or any other person or
an employee responsible for the management of or conducting of the business or
affairs or of such financial establishment shall be punished with imprisonment for a
term which shall not be less than 3 years but may extend to ten years and with fine
which not be less than one lakh rupess but may extend to five lakhs rupees and such
financial establishment shall also be liable to fine not less than three lakhs rupees but
may extend to ten lakhs rupees .
The court in fixing the amount of fine shall take into consideration the amount required
for repayment to depositor s.
When a court imposes a sentence of fine, the court shall, when passing the judgment ,
order the whole or part of the fine recovered be awarded as compensation to the
depositors in lieu of their claim in full or part as an equitable distribution.
For trial of the offence the procedure prescribed for the warrant trial in the Code of
Criminal Procedure, 1973 (No.2 of 1974) shall be applicable and special court may take
cognizance of the offence without being committed the case to it.
The State Government shall appoint a special public prosecutor, having not less than
ten year practice as an advocate, for conducting cases before the special court.
Notwithstandi ng anything contained in section 438 of the Code of Procedure, 1973
(No. 2 of 1974) no application for anticipatory bail shall lie for an offence punishable
under the Act.
792 (9)
Security in lieu of
attachment.
Punishment for
defaults by
financial
establishment.
Factors to be
considered for
impo s ing fine .
Awarding of
compensation
Procedure and
powers of Special
Court regarding
offe nces .
Special Public
Prosecutor.
Anticipatory bail
not to be granted.
(I) An appeal against the order passed by the special court shall lie to the High Appeal.
Court within thirty days from the date of order.
(2) No appeal shall be entertained unless it is accompan ied by satisfactory proof
of seventy five percent deposit of liability with competent authority.
(I) The State Government may make rules for carrying out the provisions of this
Act.
(2) Every rule made under this Act, shall as soon as possible be laid on the table
of the Legislative Assembly.
No suit or other proceedings shall lie against the State Government or the competent
authority or an officer or employee of the State Government for anything, which is
done in good faith or intended to be done under the Act.
If any difficulty arises in giving effect to the provisions of the Act, the State
Government may be order do anything not inconsistent with the provisions of the Act.
Power
ru I es.
to mak e
Prot ection of action
taken in good faith.
power to remove to
difficult y.