The ODISHA PROTECTION OF INTERESTS OF DEPOSITORS (IN FINANCIAL ESTABLISHMENT) ACT, 2011

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*THE ODISHA
PROTECTION OF INTERESTS OF DEPOSITORS
(IN FINANCIAL ESTABLISHMENT) ACT, 2011
LAW DEPARTMENT
NOTIFICA TION
The 17th August, 2013
No.8377-I. Legis-8/201 1/L.,–  The following Act on the Odisha
Legislative Assembly having seen assented to by the President on the 12th
August, 2013 is hereby published for general information.
ODISHA  ACT 21 OF  2013
THE ODISHA PROTECTION OF INTERESTS OF DEPOSITORS
(IN FINANCIAL  ESTABLISHMENT) ACT, 2011
AN ACT TO PROTECT  THE DEPOSITS MADE BY  THE PUBLIC IN
THE FINANCIAL  EST ABLISHMENTS AND MA TTERS RELA TING
THERETO
Be it enacted by the Legislature of the State of Odisha in the Sixty-
second Year of the Republic of India as follows :-
1. Shor t title, extent and commencement :- (1) This Act may be
called the Odisha Protection of interests of Depositors (in financial
Establishments) Act, 2011
(2) It extends to the whole of the State of Odisha.
(3) It shall come into force at once.
2. Definitions :-In this Act, unless the context otherwise requires,-
(a) "Competent Authority" means the Authority appointed under
* Published by Odisha Gazette Extraordinary No. 1595, Dt. 19.8.2013
The Odisha   Gazette
EXTRAORDINARY
PUBLISHED BY AUTHORITY
 No. 1595 Dated. 19 August, 2013
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section 4;
(b) "Deposit" means the deposit of money either in one lump sum
or by installments made with the Financial Establishment for a fixed period
for interest or for return in any kind or for any service;
(c) "Designated Court" means the Designated Court constituted
under section 8;
(d) "Financial Establishment" means an individual or an association
of individuals, a firm or a company registered under the Companies Act,
1956 carrying on the business of receiving deposits under any scheme or
arrangement or in any manner but does not include a corporation or a co-
operative society owned or controlled by any S tate Government or the
Central Government, or a banking company as defined under clause (c)
of section 5 of the Banking Regulation Act, 1949;
(e) "Government" means the Government of Odisha; and
(f) "prescribed" means prescribed by rules made under this Act.
3. Attachment of pr operties on default of r eturn of  deposit :-
Notwithstanding anything contained in any other law for the time being in force,-
(i) where, upon complaints received from a number of depositors
that any Financial Establishment defaults the return of deposits after
maturity or fails to pay interest on deposit or fails to provide the service
for which deposit has been made, or
(ii) where the Government have reason to believe that any Financial
Establishment is acting in a calculated manner with an intention to defraus
the depositors,
and if the Government are satisfied that such Financial
Establishment is not likely to return the deposits or to make payment of
interest or to provide the service, the Government may, in order to protect
the interest 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 from and out of the deposits collected by the Financial
Establishment, or 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 the Promoter ,
Director , Partner or Manager or Member of the said Financial
Establishment or a person who has borrowed money from the Financial
Establishment to the extent of his default or such other properties of that
person in whose name properties were purchased from and out of the
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deposits collected by the Financial Establishment, as the Government
may think fit and transfer the control over the said money or property to
the Competent Authority.
4. Competent Authority:- (1) The Government may, by notification,
appoint a District Magistrate or an Additional District Magistrate for such area
or areas or for such case or cases as may be specified in the notification as the
Competent Authority to exercise control over the properties attached by the
Government under section 3.
(2) The Competent Authority shall have such others powers as may be
necessary for carrying out the purpose of this Act.
(3) Upon receipt of the orders of the Government under section 3, the
Competent Authority shall apply within thirty days to the Designated Court for
making the ad-interim order of attachment absolute and for a direction to sell
the property so attached by public auction and realize the sale proceeds.
(4) An application under sub-section (3) shall be accompanied by one or
more af fidavits, stating the grounds on which the belief that the Financial
Establishment has committed any default or is likely to defraud, is founded, the
amount of money or value of other property believed to have been procured by
means of the deposit and the details, if any , of persons in whose name such
property is believed to have been invested or purchased out of the deposits or
any other property attached under section 3.
(5) The Competent Authority shall make an application to any court having
jurisdiction to try similar cases or deal with the subject matter pertaining to
money or property belonging to a Financial Establishment or any person specified
in section 3 situated within the territorial jurisdiction of that court for appropriate
orders.
(6) For the purpose of crediting and dealing with the money realized by
the Competent Authority, he shall open an account in any Scheduled Bank.
5. Report and return by Financial Establishment :- (1) Every Financial
Establishment which commences or carries on its business as such in the State
of Odisha on or after the commencement of this Act shall make a report to the
Collector and the Superintendent of Police of the district, mentioning the details
about its authority to carry on such business, the location of the Financial
Establishment in the State and its main Branch Office, if any, whereever situated,
permanent address of every person responsible for the management of, or
conducting of the business or affairs of, the financial Establishment in the State
and such other particulars as may be prescribed.
(2) Such report shall be made within seven days from the date on which a
Financial Establishment commences or carries on its business as such in the
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State;
Provided that a Financial Establishment which has been carrying on its
business as such prior to the commencement of this Act shall make such report
within seven days from the date of such commencement.
(3) Every Financial Establishment shall furnish a quarterly return within
one month of the expiry of each quarter of a financial year to the Collector and
the Superintendent of Police of the district in respect of its business and financial
position, the area of its investment and the location of investments of moneys
made by it within and outside the S tate, if any, and such other particulars as
may be prescribed.
(4) Whoever fails to submit report required under sub-section (2) or fails
to furnish return under sub-section (3) shall be punishable with fine which may
extend to fifty thousand rupees.
6. Default in Repayment of deposits and inter ests honoring the
commitment :- Notwithstanding anything contained in section 3, where any
Financial Establishment defaults the return of the deposit or defaults the payment
of interest on the deposit or fails to return in any kind or fails to render service
for which the deposit have been made, every person responsible for the
management of the affairs of the Financial Establishment shall be punished with
imprisonment for a term which may extend to ten  years and with the fine which
may extend to one lakh rupees and such Financial Establishment is also liable
for a fine which may extend to two lakh rupees.
7. Compounding of offence :- (1) An offence punishable under section 6
may, before the institution of the prosecution, be compounded by the Competent
Authority or after the institution of the prosecution, be compounded by the
Competent Authority with the permission of the Designated Court on payment
of the entire amount due to the depositors with or without interest.
(2) Where an offence has been compounded under sub-section (1), no
proceeding or further proceeding  or further proceeding or further proceeding,
as the case may be, shall be taken or continued against the offender, if in custody,
shall be discharged forthwith.
8. Designated Court :-(1) For the purpose of this Act, the Government
may, with the concurrence of the Chief Justice of the Orissa High Court, by
notification, constitute one more Designated Court for such area or areas or
such case or cases as may be specified in the notification which shall be presided
by an officer belonging to the Odisha Superior Judicial Service.
(2) No court including the Court constituted under the Provincial
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Insolvency Act, 1920 other than the Designated Court shall have jurisdiction in
respect of any matter to which the provisions of this Act apply.
(3) Any pending case in any other court to which the provisions of this
Act apply shall transferred to the Designated Court.
(4) When trying any case, the Designated Court may also try any offence,
other than an offence specified in section 6, with which the accused may, under
the Code of Criminal Procedure, 1973, be charged at the same trial.
9. Powers of Designated Cour t regarding attachment, sale, etc.:-
(1) Upon receipt of an application under section 4, the Designated Court shall
issue to the Financial Establishment or to any other person whose property is
attached by the Government under section 3, a notice accompanied by the
application and affidavits and of the evidence, if any, recorded, calling upon the
said Establishment or the said person to show cause on a date to be specified in
the notice as to why the order of attachment should not be made absolute and the
properties so attached be sold in public auction.
(2) The Designated Court shall also issue such notice to all other persons
represented to it as having or being likely to claim any interest or title in the
property of the Financial Establishment or the person to whom the notice is
issued under sub-section (1), calling upon such person to appear on the same
date as that specified in the notice and make objection if he so desires to the
attachment of the property or any portion thereof on the ground that he has an
interest in such property or portion thereof.
(3) Any person claiming an interest in the property attached or any portion
thereof may, notwithstanding that no notice has been served upon him under this
section, make an objection as aforesaid to the Designated Court at any time
before an order is passed under sub-section (4) or sub-section (6).
(4) If no cause is shown and no objections are made on or before the
specified date, the Designated Court shall forthwith pass an order making the
ad-interm order of attachment absolute and direct the Competent Authority to
sell the property so attached by public auction and realize the sale proceeds.
(5) If cause is shown or any objection is made as aforesaid the Designated
Court shall proceed to investigate the same and in so doing, as regards the
examination of the parties and in all others respects, the Designated Court shall,
subject to the provisions of this Act, follow the procedure and exercise all the
powers of a court in hearing a suit under the Code of Civil Procedure, 1908 and
any person making an objection shall be required to adduce evidence to show
that on the date of the attachment he had some interest in the property attached.
(6) After investigation under sub-section (5), the Designated Court shall
pass an order, within a period of one hundred and eighty days from the date of
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receipt of an application under sub-section (3) of section 4, either making the
ad-interim order of attachment absolute or varying it by releasing a portion of
the property from attachment or cancelling the ad-interim order of attachment
and then direct the Competent Authority to sell the property so attached by
public auction and realize the sale proceeds:
Provided that the Designated Court shall not release from attachment any
interest, which it is satisfied that the Financial Establishment or the person referred
to in sub-section (1) has in the property, unless it is also satisfied that there will
remain under attachment an amount or properly of a value not less than the
value that is required for repayment to the depositors of such Financial
Establishment.
(7) The Designated Court shall, on an application by the Competent
Authority, pass such order or issue such direction as may be necessary for the
equitable distribution among the depositors of the money attached or realized
out of the sale.
10. Attachment of property of malafide transferees :- (1) Where the
assets available for attachment of a Financial Establishment or the person referred
to in section 3 are found to be less than the amount or value which such Financial
Establishment is required to repay to the depositors and where the Designated
Court is satisfied by af fidavit or otherwise, that thee is reasonable cause for
believing that the said Financial Establishment has transferred, whether before
or after the commencement of this Act, any of the property otherwise than in
good faith and for consideration, the Designated Court may, by notice, require
any transferee of such property, whether or not he received the property directly
from the said Financial Establishment, to appear on a date to be specified in the
notice and show cause why so much of the transferee's property as is equivalent
to the proper value of the property transferred should not be attached.
(2) Where the said transferee does not appear and show cause on the
specified date or where after investigation in the manner provided in sub- section
(5) of section 9, the Designated Court is satisfied that the transfer of the property
to the said transferee was not in good faith and for consideration, the Designated
Court shall order the attachment of so much of the said transferee's properly as
in the opinion of the Designated Court equivalent to the proper value of the
property transferred.
11. Any Financial Establishment or person whose properly has been or is
about to be attached under this Act may, at any time, apply to the Designated
Court for permission to give security in lieu of such attachment and where the
security offered and given is, in the opinion of the Designated Court, satisfactory
and sufficient, it may cancel the ad-interim order of attachment or, as the case
may be, refrain from passing the order under sub-section (6) of section 9.
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12. Administration of property attached :- The Designated Court may,
on the application of any person interest in any property attached under this Act,
and after giving the Competent Authority an opportunity of being heard, make
such order as the Designated Court considers just and reasonable for,-
(a) providing from such of the property attached as the applicant
claims an interest in, such sum as may be reasonably necessary for the
maintenance of the applicant and of his family and for expenses connected
with the defence of the applicant where criminal proceedings have been
instituted against him in the Designated Court under section 6;
(b) safeguarding so far as may be practicable, the interest of any
business affected by the attachment and in particular, the interest of any
partners in such business.
13. Appeal :- Any person including the Competent Authority, if aggrieved
by an order of the Designated Court, may prefer an appeal to the High Court
within thirty days from the date of the order.
14. Special Public Prosecutor :- The Government shall, by notification,
appoint one or more Advocates of not less than ten years standing practice as
special Public Prosecutor for each of the Designated Court for the purpose of
conducting cases in the Designated Court.
15. Procedure and powers of Designated Court regarding offences :-
(1) The Designated Court may take cognizance of the offence without the accused
being committed to it for trial and in trying the accused person, shall follow the
procedure prescribed in the Code of Criminal Procedure, 1973 for the trial of
warrant cases by Magistrates.
(2) The provisions of the Code of Criminal Procedure, 1973 shall so far
as may be, apply to the proceedings  before a Designated Court and for the
purposes of the said provisions, a Designated Court shall be deemed to b a
Magistrate.
16. Act to override other laws :- Save a otherwise provided in this Act,
the provisions of this Act shall have effect notwithstanding anything in consistent
therewith contained in any other law for the time being in force or any custom or
usage or any instrument having effect by virtue of any such law.
17. Protection of action taken in good faith :- No suit or other proceedings
shall lie against the Government or the Competent Authority or an officer or
employee of the Government for anything which is, in good faith, done or intended
to be done under this Act.
18. Power to make rules :- The Government may, by notification, make
rules to carry out the purposes of this Act.
19. Power to remove difficulties :- (1) If any difficulty arises in giving
effect to the provisions of this Act, the Government may, by order, make such
provisions not inconsistent with the provisions of this Act as may appear to be
necessary for removing the difficulty:
Provided that no order shall be made under this section after expiry of a
period of two years from the date of commencement of this Act.
(2) Every order made under this section shall be laid, as soon as may be
after it is made, before the State Legislature.
By order of the Governor
S. PUJAHARI
Principal Secretary to Government
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