TaxTMI 
TaxTMI 
2006 (9) TMI 284
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....owers under Chapter III-B of the Reserve Bank of India Act, 1934 including issue of Certificate of Registration to non-banking institutions, prescribing norms, issuing instructions, prohibiting non-banking companies from accepting deposits and filing of winding up petitions, etc. 3. It is stated that the 1st respondent-Company accepted deposits from the public in the course of its business. In terms of section 45QA of the Act, every deposit accepted by the non-banking financial Company is to be repaid in accordance with the terms and conditions of such deposits and therefore, the 1st respondent-Company was also bound to repay the deposits as per the terms and conditions of acceptance. The 1st respondent-Company having failed to repay the deposits on maturity, the aggrieved depositors approached the Southern Regional Branch of the Company Law Board at Chennai under section 45QA(2) of the Act complaining of non-payment of the matured deposits. The Company Law Board passed an order under section 45QA(2) of the Act directing the 1st respondent-Company to repay the deposits as per the conditions in its order dated 13-10-1988 - Annexure-C of the paper book and the said order was commu....
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....ubmission of the petitioner's Counsel that as per section 45QA of the RBI Act, 1934, the Company Law Board has ordered the 1st respondent for repayment of deposits and as there was non-compliance of the order of repayment by the respondent-Company passed by the Company Law Board, the petitioner being a regulatory authority as per section 58B(4AAA) which states that whoever fails to comply with any order made by the Company Law Board as per section 45QA(2), they shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine and as per section 58C where a person commits contravention or default as per section 58B, every person who at the time of contravention or default was in charge of or responsible to the Company for the conduct of the business of the Company, as well as the Company, shall be deemed to be guilty of the contravention or default, filed a complaint and as per the complaint and also the petitioner represented by its officer specifically averred in the complaint as to the responsibility and conducting of the business of the 1st respondent-Company by respondents 3 and 4. Despite that, learned Magistrate without noting t....
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....nancial Company shall commence or carry on the business of non-banking financial institutions, only after obtaining a certificate of registration as per Chapter III-B of the Reserve Bank of India Act, 1934. Further, as per section 45JA of the RBI Act has power to determine and issue directions permitting non-banking financial institutions regarding conduct of the business in the manner not detrimental to the interest of the depositors or in a manner not prejudicial to the interest of non-banking financial institutions and it may determine the policy and give directions to all or any of the non-banking financial institutions relating to income recognition, accounting standards, making of proper provisions for bad and doubtful debts and such other activities of the non-banking financial institutions. In that context, as per section 58B(4AAA) aggrieved persons if they approach the Company Law Board and the Company Law Board on such application passes any such order, whoever fails to comply with that order as is passed under section 45QA of the Act, shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to pay fine. Further, as per sec....
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....he deposits together with interest. Further, it has noted that the Advocate who represented the Company sought time for repayment of the amount to the applicants in three instalments at 25 per cent of the amount due by 31-12-1998 and another 25 per cent of the amount due by 28-2-1999 and the remaining balance by 31-3-1999. On that basis, the Company Law Board has ordered the 1st respondent to repay the deposits in respect of the applicants together with the contracted rate of interest calculated at the date of the payment in three instalments. Further, it has ordered that a copy of the order be sent to the General Manager, Department of Non-Banking Supervision, RBI, Bangalore Regional Office to ensure compliance and for taking appropriate action for non-compliance of the order, if any. 12. In furtherance of the said direction issued by the Company Law Board for non-compliance, the petitioner filed a private complaint before the VIII Additional CMM, Bangalore who although has taken cognizance of the complaint and issued process against all the four respondents, after hearing, passed an order of discharge insofar as respondents 3 and 4 are concerned. At this juncture, it may be no....
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.... event of any winding-up order is passed, the initiation of civil suit or legal proceedings acts as a bar but not criminal prosecution for violation of the legal provisions wherein a penal clause has been invoked to prosecute the guilty as is held by the Division Bench of the Delhi High Court in Company Appeal No. 18 of 2000 in the case of D.K. Kapur v. RBI [2001] 30 SCL 96 . 16. However, it is the submission of the respondents that other Directors were not taken into consideration while filing the complaint and the 3rd and 4th respondents have been discriminated against and only family members have been chosen to be prosecuted by the petitioner. Here, it is relevant to note the proviso as per section 58C of the RBI Act, which states that every person who at the time of contravention or default was in charge or is responsible for the Company and for the conduct of business of the Company, shall be deemed to be guilty of the contravention. Nothing has been forthcoming as to whether other Directors are also responsible for the conduct of the business of the Company. If the petitioner has arbitrarily or falsely implicated only respondents 3 and 4 leaving out others, it may be an ar....