Tamil Nadu Protection of Interests of Depositors (In Financial Establishments) Act, 1997
No: 44 Dated: Aug, 07 1997
Tamil Nadu Protection of Interests of Depositors (In Financial Establishments) Act, 1997
(Tamil Nadu Act 44 of 1997)
An Act to protect the deposits made by the public in the Financial Establishnents and matters relating thereto.
BE it enacted by the Legislative Assembly of the State of Tamil Nadu in the Forty-eighth Year of the Republic of India as follows :-
CHAPTER I
1. Short title and commencement. - (1) This act may be called the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997.
(2) It shall come into force at once.
2. Definitions. - In this Act, unless the context otherwise requires:-
(1) "Competent authority" means the authority appointed under section 4;
(2) "deposit" means the deposit of money either in one lump sum or by instalments made with the Financial Establishment for a fixed period, for interest or for return in any kind or for any service;
(3) "Financial Establishment" means an individual, an association of individuals, a firm or a company registered under the companies Act, 1956 (Central Act 1 of 1956) carrying on the business of receiving deposits under any scheme or arrangement or in any other manner 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 in section 5(c) of the Banking Regulation Act 1949 (Central Act X of 1949).
(4) "Government" means the State Government.
CHAPTER - II
3. Attachment of properties on default of return of deposits. - 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 defraud 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 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, partner, director, 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 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 one or more authorities for such area or areas or such case or cases as may be specified in the notification hereinafter called "the Competent authority" to exercise control over the properties attached by the Government under section 3.
(2) The Competent authority shall have such other powers as may be necessary for carrying out the purposes of this Act.
(3) Upon receipt of the order of the Government under section 3, the Competent authority shall apply within thirty days to the Special Court constituted under this Act for making the ad-interim order of attachment absolute and for a direction to sell the property so attached by public auction, and realise the sale proceeds.
(4) An application under sub section (3) shall be accompanied by one or more affidavits, 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 the dealing with the money realised by the Competent authority, he shall open an account in any Scheduled commercial bank.
CHAPTER -III
5. Default in repayment of deposits and interest honouring the commitment. - Notwithstanding anything contained in Chapter II, 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 has 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 fine which may extend to one lakh of rupees and such Financial Establishment is also liable for a fine which may extend to one lakh of rupees.
5A.Compounding of offence. - (1) An offence punishable under section 5 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 Special 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, as the case may be, shall be taken or continued against the offender, in respect of the offence so compounded and the offender, if in custody shall be discharged forthwith.
CHAPTER -IV
6. Special Court. - (1) For the purposes of this Act, the Government may, with the concurrence of the Chief Justice of the High Court, by notification, constitute one or more Special Courts for such area or areas or such cases as may be specified in the notification in the cadre of a District and Sessions Judge.
(2) No Court including the Court constituted under the Presidency Towns Insolvency Act, 1909 and the Provincial Insolvency Act, 1920, other than the Special Court shall have jurisdiction in respect of any matter to which the provision of this Act apply.
(3) Any pending case in any other court to which the provisions of this Act apply shall stand transferred to the Special Court.
(4) When trying any case, the Special Court may also try any offence, other than an offence specified in section 5, with which the accused may, under the Code of Criminal Procedure, 1973 (Central Act 2 of 1974) be charged, at the same trial.