Depositor-protection law upheld as distinct from banking and company regulation, with proceedings maintained despite winding up.

The Maharashtra depositor-protection law was held to operate in a field distinct from the Reserve Bank of India Act, 1934 and the Companies Act, 1956, because it targets fraudulent defaults by financial establishments through attachment and criminal consequences, while the central statutes regulate banking and corporate winding up. Mere overlap in definitions or incidental trenching did not create repugnancy or displacement, and the proceedings under the State Act were maintainable. The Court also treated the earlier Supreme Court ruling on similar depositor-protection legislation as covering legislative competence and occupied field, and left individual responsibility and the effect of winding up to be raised before the Special Court.

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Issues: Whether the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 was excluded by the Reserve Bank of India Act, 1934 and the Companies Act, 1956 on the ground of occupied field and repugnancy, and whether proceedings under the State Act could continue despite the company being regulated under the Reserve Bank of India Act, 1934 and later placed in winding up.

Analysis: The scope and object of the State enactment were held to be distinct from the regulatory scheme under the Reserve Bank of India Act, 1934 and the Companies Act, 1956. The State law was found to be aimed at protecting depositors from fraudulent defaults by financial establishments and at providing attachment and criminal consequences, whereas the central statutes regulated banking and corporate winding up. The Court held that mere overlap in some definitions or incidental trenching did not create a real conflict. It also held that the Supreme Court decision upholding the Tamil Nadu depositor-protection legislation covered the constitutional question of legislative competence and occupied field, and that the later clarification did not dilute that binding effect. The Court further held that factual contentions regarding individual responsibility and the effect of winding up could be raised before the Special Court.

Conclusion: The State Act was not held to be displaced by the Reserve Bank of India Act, 1934 or the Companies Act, 1956, and the criminal proceedings under the State Act were held to be maintainable.

Ratio Decidendi: A depositor-protection law enacted by the State to punish fraudulent default and attach property of financial establishments is valid and enforceable where the central banking and company laws do not occupy the same field in a manner creating an irreconcilable conflict.

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