TaxTMI 
TaxTMI 
2013 (9) TMI 1319
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....judgment. However, the brief and relevant fact would separately be laid in the judgment. 2. Tripura Protection of Interests of Depositors (in Financial Establishments) Act, 2000 has been enacted by the Tripura Legislative Assembly having the object of protecting the interests of depositors of the financial establishments and for matters connected therewith and incidental thereto. The word deposit has been defined in Section 2(c) of Tripura Protection of Interests of Depositors (in Financial Establishments) Act, 2000, hereinafter would be referred to as the Principal Act as under: "(c) "deposit" includes and shall be deemed always to have included any receipt of money of acceptance of any valuable commodity by any Financial Establishment to be returned after a specified period or otherwise, either in case or in kind in the form of a specified service with or without any benefit in the form of interest, bonus, profit or in any other form, but does not include - (i) amount raised by way of share capital or by way of debenture or by bond or any other instrument covered under the guidelines given, and regulations made by the SEBI established under the securities and....
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....ne the legislative change in 2011. Section 3 of the Principal Act, 2000 which provides of fraudulent default distinguishable from default in the ordinary parlance and the remedies thereof is extracted hereunder: "Conviction for Fraudulent Default 3. Any Financial Establishment which (i) fraudulently defaults any repayment of deposit on maturity along with any benefit in the form of interest, bonus, profit or in any other form as promised; or (ii) fraudulently fails to render service as promoter, partner, director, manager or any other person or conduct of the business or affairs of such Financial Establishment shall, on conviction, be punished with imprisonment for a term which may extend to six years and with fine which may extend to one lakh of rupees and such Financial Establishment also shall be liable for a fine which may extend to one lakh of rupees: Provided that in the absence of special and adequate reasons recorded in the judgment of the court, the imprisonment shall not be for less than three years and the fine shall not be less than one lakh of rupees. Explanation : For the purpose of this section, a Financial Establishment, ....
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....ils to render any specific service agreed against the deposit with an intention of causing wrongful gain to one person or wrongful loss to another person : or (iii) commits such defaults due to its inability arising out of impracticable or commercially not viable promises made while accepting such deposit or arising out of deployment of money or assets acquired out of the deposits in such a manner as it involves inherent risk in recovering the same when needed, shall be deemed to have committed a default fraudulently or failed to render specific service fraudulently." 7. Apart that, after Section 3 of the Principal Act, a new Section has been asserted as Section 3A by the said amendment Act. 8. It is noteworthy that by way of the said amendment, Section 14 of the Principal Act has been substituted. The new Section 14 of the act provides as under: "Notwithstanding anything to the contrary contained in any other Act, except the Act or Acts enacted by Parliament and the rules framed thereunder, the provisions of this Act shall apply." 9. It is to be further noted that in exercise of the powers conferred by Sub-Section (1) of Section 16 of the Principal Act, ....
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....ourt, accompanied by one or more affidavits stating the grounds on which the Government has issued the said order under section 4 and the amount of money or other property believed to have been acquired out of the deposits and the details, if any, of persons in whose name such property is believed to have been invested or acquired or any other property attached under section 4 for such further orders as may be found necessary. (4) The Competent Authority, may also make an application to any Special Court or Designated Court or any other judicial forum established or constituted or entrusted with the powers by any other State Government for adjudicating any issue or subject matter pertaining to any money or property or assets of a Financial Establishment under any similar enactment in respect of money or property or assets belonging to or ostensibly belonging to a Financial Establishment or any person notified under this Act situated within the territorial jurisdiction of that Special Court or Designated Court or any judicial forum, as the case may be, for passing appropriate orders to give effect to the provisions of this Act." 11. For purpose of this case, Section 5(1)....
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....y corporate, registered under any enactment relating to money lending which is for the time being in force in any State; and (vii) any amount received by way of subscriptions in respect of a chit. Explanation I.- "Chit'' has the meaning assigned to it in clause (b) of section 2 of the Chit Funds Act, 1982 (40 of 1982). Explanation II.- Any credit given by a seller to a buyer on the sale of any property (whether movable or immovable) shall not be deemed to be deposit for the purposes of this clause;]" 13. Section 45-I(bb)(v)(d) of the RBI Act, according to the petitioner provides for an advance against the orders for goods, properties or services. The petitioner's activities are wholly within that ambit. Thus the State cannot have any jurisdiction over that subject matter. But no challenge has been thrown against any provision of the state act on repugnancy. The reference is therefore has to be understood in the context of non-obstante clause provided by Section 14 of the state act. Further, Section 45-I(c) of the RBI Act defines the financial institutions as under: (c) "financial institution'' means any non-banking institution which carrie....
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....s the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; (iii) such other non- banking institution or class of such institutions, as the Bank may, with the previous approval of the Central Government and by notification in the Official Gazette, specify;]" 14. This has to be read along with Section 45-I(c)(f) which defines non-banking financial company as reproduced above. 15. The petitioner which is a company registered under the Companies Act has acknowledged that position that for purpose of carrying out any business of receiving deposits, under any scheme or arrangement or in any other manner or lending in any manner, previous approval of the Central Government by notification in the gazette along with the certificate of registration as the Non-Banking Financial Company is the pre-requisite for such business. Section 45-IA is reproduced hereunder for reference: [45-IA. Requirement of registration and net owned fund.- (1) Notwithstanding anything contained in this Chapter or in any other law for the time being in force, no non-banking financial company shall commence or carry on the business of a non-ba....
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....nducted in a manner detrimental to the interest of its present or future depositors; (c) that the general character of the management or the proposed management of the non-banking financial company shall not be prejudicial to the public interest or the interest of its depositors; (d) that the non-banking financial company has adequate capital structure and earning prospects; (e) that the public interest shall be served by the grant of certificate of registration to the non-banking financial company to commence or to carry on the business in India; (f) that the grant of certificate of registration shall not be prejudicial to the operation and consolidation of the financial sector consistent with monetary stability, economic growth and considering such other relevant factors which the Bank may, by notification in the Official Gazette, specify; and (g) any other condition, fulfillment of which in the opinion of the Bank, shall be necessary to ensure that the commencement of or carrying on of the business in India by a non-banking financial company shall not be prejudicial to the public interest or in the interest of the depositors. ....
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....ion is communicated to it, to the Central Government and the decision of the Central Government where an appeal has been preferred to it, or of the Bank where no appeal has been preferred, shall be final: Provided that before making any order of rejection of appeal, such company shall be given a reasonable opportunity of being heard. Explanations.- For the purposes of this section,- (I) "net owned fund" means- (a) the aggregate of the paid-up equity capital and free reserves as disclosed in the latest balance- sheet of the company after deducting therefrom- (i) accumulated balance of loss; (ii) deferred revenue expenditure; and (iii) other intangible assets; and (b) further reduced by the amounts representing- (1) investments of such company in shares of- (i) its subsidiaries; (ii) companies in the same group; (iii) all other non-banking financial companies; and (2) the book value of debentures, bonds, outstanding loans and advances (including hire- purchase and lease finance) made to, and deposits with,- (i) subsidiaries of such company; and (ii) c....
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....er hand, Section 4 (1) (ii) of the said state act provides that: "(ii) where the Government has reason to believe that any Financial Establishment is acting in a calculated manner detrimental to the interest of the depositors with an intention to defraud them and if the Government is satisfied that such Financial Establishment is not likely to return the deposits or make payment of interest or other benefits assured or to provide the services against which the deposit is received may, in order to protect the interest of the depositors of such Financial Establishments, after recording reasons in writing, issue an order by publishing it in the Official Gazette, attaching the money or other property believed to have been acquired by such Financial Establishment either in its own name or in the name of any other person from 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, Director, partner or manager or member of the said Financial Establishments the Governmen....
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....ompanies Act provides that a company within the meaning of Section 3 of the Companies Act can solicit deposits conforming to the conditions prescribed by the Central Government in consultation with the Reserve Bank of India. For purpose of reference, Section 58A of the Companies Act is reproduced hereunder: "58A. Deposits not to be invited without issuing an advertisement (1) The Central Government may, in consultation with the Reserve Bank of India, prescribe the limits up to which, the manner in which and the conditions subject to which deposits may be invited or accepted by a company either from the public or from its members. (2) No company shall invite, or allow any other person to invite or cause to be invited on its behalf, any deposit unless- (a) such deposit is invited or is caused to be invited in accordance with the rules made under sub-section (1), 2[***] (b) an advertisement, including therein a statement showing the financial position of the company, has been issued by the company in such form and in such manner as may be [prescribed, and] [(c) the company is not in default in the repayment of any deposit or part t....
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....ot been made, and out of the fine, if realized, an amount equal to the amount in relation to which the repayment of deposit has not been made, shall be paid by the Court, trying the offence, to the person to whom repayment of the deposit was to be made, and on such payment, the liability of the company to make repayment of the deposit shall, to the extent of the amount paid by the Court, stand discharged; (b) every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to five years and shall also be liable to fine. (6) Where a company accepts or invites, or allows or causes any other person to accept or invite on its behalf, any deposit in excess of the limits prescribed under sub-section (1) or in contravention of the manner of condition prescribed under that sub-section or in contravention of the provisions of sub- section (2), as the case may be,- (a) the company shall be punishable,- (i) where such contravention relates to the acceptance of any deposit, with fine which shall not be less than an amount equal to the amount of the deposit so accepted; (ii) where such contravention rel....
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....sub-section (9) shall be punishable with imprisonment which may extend to three years and shall also be liable to a fine of not less than rupees five hundred for every day during which such non- compliance continues.] (11) A depositor may, at any time, make a nomination and the provisions of sections 109A and 109B shall, as far as may be, apply to the nomination made under this sub-section. Explanation- For the purposes of this section, "deposit" means any deposit of money with, and includes any amount borrowed by, a company but shall not include such categories of amount as may be prescribed in consultation with the Reserve Bank of India." 21. It is to be noted that a banking company or such other companies if the Central Government may, in consultation with the Reserve Bank of India (for the short the RBI) specify in this behalf would be exempted from the obligation of Section 58A of the Companies Act, 1956. But it is a prerequisite to such invitation of deposits or acceptance thereof and that is subject to the sanction of the Central Government in consultation with the RBI. While granting the sanction, the Central Government shall have to prescribe the limit....
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.... (a) Specify, by regulations- (i) The matters relating to issue of capital, transfer of securities and other matters incidental thereto; and (ii) The manner in which such matters shall be disclosed by the companies;- , (b) By general or special orders- (i) Prohibit any company from issuing of prospectus, any offer document, or advertisement soliciting money from the public for the issue of securities; (ii) Specify the conditions subject to which the prospectus, such offer document or advertisement, if not prohibited, may be issued. (2) Without prejudice to the provisions of section 21 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Board may specify the requirements for listing and transfer of securities and other matters incidental thereto.] 22. Section 11A of the SEBI Act has defined and allowed the scope of the CIS and under Section 11B of the SEBI Act the powers have been conferred on the SEBI to enquire or to pass necessary directions in the interest of the investors or orderly development of securities market; or to prevent the affairs of any intermediary or other persons referred to in Sec....
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....owed to be attached. (f) direct any intermediary or any person associated with the securities market in any manner not to dispose of or alienate an asset forming part of any transaction which is under investigation: Provided that the Board may, without prejudice to the provisions contained in sub-section (2) or sub-section (2A), take any of the measures specified in clause (d) or clause (e) or clause (f), in respect of any listed public company or a public company (not being intermediaries referred to in section 12) which intends to get its securities listed on any recognised stock exchange where the Board has reasonable grounds to believe that such company has been indulging in insider trading or fraudulent and unfair trade practices relating to securities market: Provided further that the Board shall, either before or after passing such orders, give an opportunity of hearing to such intermediaries or persons concerned." 24. In this regard, a judgment of the Calcutta High Court in the matter of M/S Rose Valley Real Estate & Construction Ltd. & Anr. Vs. Union of India & Ors. delivered in W.P.(C) 725 of 2011 may be referred to. Wherein the Calcutta High....
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....sitors (in Financial Establishments) Act, 2000 read with Tripura Protection of Interests of Depositors (in Financial Establishments) (Amendment) Act, 2011 and the Tripura Protection of Interests of Depositors (in Financial Establishments) Rules, 2007 and Tripura Protection of Interests of Depositors (in Financial Establishments) (Amendment) Rules, 2011 has the competence to carry out the objects of the act in particular the responsibilities set out therein and to exercise the powers provided under Section 3A (1) of the Tripura Protection of Interests of Depositors (in Financial Establishments) Act, 2000 as amended. For purpose of appreciation, Section 3(A) (1) of the State Act is reproduced hereunder: "3A (1) Every Financial Establishment before starting operation in the State shall intimate details of its business as required as per Section 3A(1) of the Act to the Competent Authority in Form No.5(Five). (2) Every Financial Establishment shall file monthly statement about its business as required as per Section 3A(2) of the Act to the Competent Authority in Form No.6(Six). (3) The Authorized Officer may direct any Financial Establishment within his jurisd....
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....time as prescribed, the restraint order as contemplated was passed by the designated authority, the Sub-Divisional Magistrate, Santirbazar, South Tripura which reads as under: "A show cause notice Vide No.F. No.F.13(7)/SDM/STB/SS/2013/843 has been issued on 31-05-2013 to Rose Valley Group of Companies, Baikhora, South Tripura. The reply of the show cause is supposed to be submitted by 06-06-2013. In view of the above it is instructed that Rose Valley Group of Companies, Baikhora, South Tripura shall not collect money as public deposit/hotel or resort booking/property/land booking/membership share/debenture/ preferential share/product booking etc. till the disposal of the reply of show cause. This order must be complied." The said order dated 05.06.2013 is primarily under challenge. But in this writ petition some other ancillary reliefs have been sought. In W.P.(C) No.168 of 2013 30. In this writ petition, the grievance of the petitioner is that the authorized officer (the Sub-Divisional Magistrate, Gandachara, Dhalai District) has directed the writ petitioner to produce all necessary documents in regard to their business by the notice dated 30.05.20123 (A....
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.... of the term 'financial establishment' labeled to them. But from their activities and modus operandi, it is apparent and obvious that they fall within the definition of 'financial Establishment' defined under Section 2 of the Tripura Protection of Interest of Depositors, 2000 which defines 'Financial Establishment' as any persons/company/office accepting deposit under any scheme or arrangement or 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 under Clause (c) of section 5 of the Banking Regulation Act, 1949 ( 10 of 1949). As such the company has been dealing with illegal financial investment without obtaining any permission from concerned authority. In this case, RBI & SEBI. 5) Also, Sub-Section 4 of section 3 A of the Amendment Act prohibits involvement of business like Real Estate, Plantation, Tour & Travels, Supply of valuable goods and services. Also, the company is found dealing with this restricted trade and illegally. Therefore, from the above conclusions, interim order is hereby passed to the following effect - (1) ....
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.... fails to furnish the informational statement as specified, the appropriate penal action would be taken. Thereafter, the records were produced by the petitioner through their Branch Manager, Sonamara. On examination of the records, by the memorandum dated 13.06.2013 (Annexure-P/3 to the writ petition), the designated authority has observed that the petitioner has been carrying on collection of the deposit illegally and hence, they were restrained from accepting any new bookings (deposits), renewal of old bookings and other financial collection from the public but they were asked by the said memorandum to keep their offices open for making payment to the subscriber. The petitioner has further been restrained from transferring bank balance, movable or immovable properties. The said memorandum dated 13.06.2013 reads as under: MEMO "Whereas, the competent authority i.e. the Sub- Divisional Magistrate, Sonamura, vide letter No.F.1(1-A)/SDM/SNM/SS/2008/135-144 dated 29.05.2013 had circulated Annexure 'A' & Annexure 'B' format to the different NBFCs/UIBs who are working under this Sub- Division. And The Branch-in-Charge/Member of Rose Valley, Sonamura Branch ....
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....ated 23.04.2-013 (Annexure-P/1 to the writ petition) whereby a general warning has been issued not to collect any form of deposits without authority under law. It has been categorically observed in the memorandum dated 23.04.2013 that no company is permitted to open a new account, collect any amount from public and if collected, the member of the public is entitled to get back those amounts with the assured benefit. If any breach thereof is found, the officials including the Managing Director and the Directors of the company shall be made responsible. Further by the notice dated 27.05.2013 (Annexure P/2 to the writ petition) the petitioner was asked to submit the records in terms of the format attached thereto. The petitioner has submitted the records relating to Rose Valley Hotels & Entertainment Ltd., Rose Valley marketing India Ltd. and Rose Valley Real Estates & Construction Ltd. On scrutiny of such records, the interim order dated 20.06.2013 (Annexure-P/5 to the writ petition) was passed by the designated authority, the Sub-Divisional Magistrate, Kamalpur, Dhalai Tripura restraining the petitioner from collecting any form of money subscription but they are directed to continue....
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....efinition of 'financial Establishment' defined under Section 2 of the Tripura Protection of Interest of Depositors, 2000, which defines 'Financial Establishment' as any persons/company/office accepting deposit under any scheme or arrangement or 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 under Clause (c) of section 5 of the Banking Regulation Act, 1949 ( 10 of 1949). As such the company has been dealing with illegal financial investment without obtaining any permission from concerned authority. In this case, RBI & SEBI. 5) Also, Sub-section 4 of 3A of the Amendment Act prohibits involvement of business like Real Estate, Plantation, Tour & Travels, supply of valuable goods and services. Also, the company is found dealing with this restricted trade and illegally continuing their activities. Therefore, from the above conclusions, interim order is hereby passed to the following effect - (1) Rose Valley Marketing India Ltd., Kamalpur Branch shall stop all activities relating to collection of any form of money/subscription w.e....
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....013 (Annexure-P/6 to the writ petition) the restraint order was passed asking the petitioner not to collect any sort of deposits and not to transfer their bank balance, movable or immovable assets as reflected in their reports. But they shall continue to make payment of the maturity and pre-maturity withdrawal on demand to the subscribers. The said interim order dated 04.07.2013 reads as under: Interim Order "I, Sri Sanjoy Chakraborti, Sub-Divisional Magistrate, Khowai Sub- Division[Competent Authority of 'The Tripura Protection of Interest of Depositors (In Financial Establishments) (Amendment) Act, 2011' as notified in the Tripura Gazette Notification vide No.F.12(5)- DIF/C-I(P-II)/Shadow/3334, dated 29th August-2011] do hereby pass this interim order for regulating all kind of business under Rose Valley, Khowai Branch operating business within the jurisdiction of Khowai sub-division. The order is passed after conduct of hearing on 26th June, 2013 wherein the Manager of the said Branch Office is present as per provision of 'The Tripura Protection of Interest of Depositors (In Financial Establishments) (Amendment) Act, 2011'. On the basis of hea....
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.... with illegal financial investment without obtaining any permission from concerned authority like RBI & SEBI. 6) Also, Sub-section 4 of section 3A of the Amendment Act prohibits involvement of business like Real Estate, Plantation, Tour & Travels, supply of valuable goods and services. Also, the company is found dealing with this restricted trade and illegally continuing their activities. Therefore, from the above conclusions, Interim Order is hereby passed to the following effect - (1) Rose Valley, Khowai Branch shall stop all activities relating to collection of any form of money/subscription w.e.f. 26th June, 2013 onwards. (2) All the agents operating under their branch should be informed in writing within 10(ten) days from the date of passing of this order, a copy of the order to endorsed to this office. (3) Also, a Public Notice to be issued that from 26th June, 2013, Rose Valley, Khowai Branch shall stop accepting any new bookings, renewal of old bookings and other financial collections from the public. (4) It is also hereby ordered that, the Rose Valley, Khowai Branch shall continue to open its office like earlier busines....
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....against the procedure that has been followed by the designated authority. Finally, by the interim order dated 12.06.2013 (Annexure-P/3 to the writ petition) the petitioner was restrained in terms of Section 3A(7) of the Principal Act. They were restrained from collecting or mobilizing any kind of monetory deposits from the public until requisite statutory registrations, licenses and permissions are obtained and produced to the satisfaction of the competent authority but the petitioner has been directed to make all due payment of entitlements to the existing depositors and also submit a compliance report. They have further restrained from transferring or altering any movable or immoveable property listed in the statement, Annexure-A to the reply. The said order dated 12.06.2013 reads as under: ORDER WHEREAS, in accordance with the provisions made in Sec. 3A(4) of the Tripura Protection of Interests of Depositors (in Financial Establishments) (Amendment) Act, 2011, and following the Order issued by the District Magistrate & Collector, West Tripura District, vide No.F.1(5)-SS/DM/W/96-97/671-684, dated 30-04-2013, an inspection was carried out in the Agartala Regional....
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.... were received alleging that the Rose Valley, Agartala, had not been making payment on time of the entitlements due on their claims of premature withdrawals' and maturity withdrawals against the Rose Valley plans/schemes they held; as specified below: Sl No Name of Person Date of Complaint Content of Complaint 1 Sri Sudipta Sekhar Mishra, S/O- late S.S. Mishra, Old Kalibari Lane, Agartala 12.05.2013 Failure of Rose Valle, Agartala, to entertain Prematurity Payment claim on time. 2. Smt. Ashalata Mishra, W/O- late S.S. Mishra, Old Kalibari Lane, Agartala 12.05.2013 Failure of Rose Valle, Agartala, to entertain Prematurity Payment claim on time. 3 Smt. Fulan Dey (Chowdhury), Uttar Champamura, T.K. Agartala 13.05.2013 Failure of Rose Valle, Agartala, to entertain Prematurity Payment claim on time. 4 Sri Narayan Debnath, S/O- Rajani Kanta Choudhury, Uttar Champamura, T.K. Agartala 13.05.2013 Failure of Rose Valle, Agartala, to entertain Prematurity Payment claim on time. 5 Smt. Sukriti Das, Contact No.9774599093 23.05.2013 Unauthorized deduction from Maturity payment entitlement 6 Smt. Anjali Das, Contact No.....
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....to the depositors in a manner akin to Collective Investment Schemes (CIS) within the meaning of Section 11AA of the SEBI, 1992. AND WHEREAS, the reply has also refrained from putting forth any direct and specific answer to the other principal points of irregularities mentioned in the Notice to Show Cause, like allurement of gullible investors by offering impracticably high, unrealistic and unsustainable interest rates, failure to make timely payments on prematurity and maturity claims of its depositors, arbitrary and unauthorized deductions from prematurity claim entitlements, failure to intimate and to disclose facts about its business operations to the Competent Authority as required under Sec. 3A (1) of the Tripura Protection of Interests of Depositors (in Financial Establishments) (Amendment) Act, 2011 etc; AND WHEREAS, the reply is found to have been premised on fallacious and deceptive arguments like inherent lack of competence and jurisdiction of an S.D.M. to issue show cause notice, or to carry out inspection of its business premise under the provisions of the Tripura Protection of Interests of Depositors (in Financial Establishments) (Am....
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....uthority as defined under the Tripura Protection of Interests of Depositors (in Financial Establishments) (Amendment) Act, 2000. 3. Rose Valley Hotels and Entertainments Ltd., the Rose Valley Group as a collective entity, or any of the subsidiary companies of the Rose Valley Group, including the Directors and Associates, are hereby restrained from executing sale, transfer or alter the moveable and immoveable properties listed in the Statement annexed hereto and marked as Annexure-A, and any other moveable or immoveable properties subsisting or under construction anywhere in Tripura that is not mentioned in the Annexure-A, but otherwise legitimately belongs to the Rose Valley Hotels and Entertainments Ltd., the Rose Valley Group as a collective entity, or any of the subsidiary companies of the Rose Valley Group. The Restrains imposed hereinabove shall come into immediate effect on delivery of this Order on the Rose Valley, Agartala. This Order is issued without prejudice to any other actions that might be warranted in due course. The said order dated 12.06.2013 is primarily under challenge. But in this writ petition some other ancillary reliefs have bee....
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....cense from SEBI or clearance from the RBI could be produced with regard to their financial business. 4) They deny the allegations of the term 'Financial Establishment' labeled to them. But from their activities and modus operandi, it is apparent and obvious that they fall within the definition of 'Financial Establishment' defined under Section 2 of 'The Tripura Protection of Interest of Depositors, (In Financial Establishments) Act-2000, which defines 'Financial Establishment' as any person/company/office accepting deposit under any scheme or arrangement or 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 Banking Company as defined under Clause (c) of section 5 of the Banking Regulation Act, 1949 ( 10 of 1949). As such the company has been dealing with illegal financial investment without obtaining any permission from concerned authority. In this case RBI & SEBI. 5) Also, Sub-section 4 of section 3A of the Amendment Act prohibits involvement of business like Real Estate, Plantation, Tour & Travels, supply of valuable goods and services. Also, the company is found....
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.... the maturity value to the subscribers or non-maturity on their demand. The petitioner has been categorically stated by the said order dated 20.06.2013 that the said order is appealable. Even the order dated 25.06.2013 (Annexure-P/2 to the writ petition) of making payment of the maturity value has been challenged. The said order dated 20.06.2013 is primarily under challenge. But in this writ petition some other ancillary reliefs have been sought. In W.P.(C) No.274 of 2013 36. The grievance of the petitioner in this writ petition emanates from the impugned communication dated 26.07.2013 (Annexure-P/1 to the writ petition) issued by the designated authority the Sub-Divisional Magistrate, Jirania, West Tripura whereby the further collection of money was restrained under Section 3A(7) of the Principal Act and from selling, transferring or altering any moveable property of the petitioner in terms of the order dated 10.07.2013. The said order of the SEBI is not under challenge in this writ petition. It appears from the records that the SEBI passed the order dated 10.07.2013 (Annexure-P/2 to the writ petition) and the SDM, Jirania, West Tripura has communicated the existence of t....
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....r immoveable properties which has been furnished to the designated authority in their report. But the petitioner shall continue to make payment of the maturity or pre-maturity to the public on demand and they shall not refuse to payment to anyone. The said interim order dated 12.08.2013 reads as under: Interim Order "I, Sri Bimal Riang, Sub-Divisional Magistrate, Longtharai Valley Sub- Division do hereby pass this interim order for regulating the business under Rose Valley Marketing India Ltd. Longtharai Valley Branch operating under LTV Sub- Division area. The order is passed after conduct of hearing on 26th June, 2013 wherein the Manager of the said Branch Office is present as per provision of The Tripura Protection of Interest of Depositors (In Financial Establishments) (Amendment) Act and Rules 2011. On the basis of hearing, the following irregularities have been detected, therefore, the business is found to be of illegal in nature and against the provisions of the Tripura Protection of Interest of Depositors (In Financial Establishments) (Amendment) Act, and Rules 2011. The below mentioned irregularities were found: 1) As per the re....
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.... under their branch should be informed in writing within 5 days from the date of passing of this order, a copy of the order to endorsed to this office. (3) Also, a Public Notice to be issued that from the date of passing this Interim Order. Rose Valley Marketing India Ltd. Longtharai Valley, Manu Branch shall stop accepting any new bookings, renewal of old bookings and other financial collections from the public. (4) It is also hereby ordered that, the Rose Valley Marketing India Pvt. Ltd. Longtharai Valley, Manu Branch shall continue to open its office like earlier business hours and continue to give payments on maturity as well as pre- maturity withdrawals to the public on demand basis. Deduction from principal amount shall not be entertained at any condition. They should not refuse payments to any one if he has invested in the company and is eligible. (5) It is also ordered that the Branch office shall not transfer its Bank Balance or moveable assets as reported in their reports to other branches or other places. They can only make maturity and prematurity withdrawal payments to the customers from the Bank balance. This Interim Order given by ....
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....er dated 17.08.2013 for existence of the principal order of the SEBI, this Court is not required to interfere with the impugned order dated 17.08.2013 which reads as under on the ground of competence. However, no further action be taken by the designated authority till SEBI takes the proceeding to its logical end: Interim Order "I, Sri T. Darlong, Sub-Divisional Magistrate, Ambassa Sub- Division do hereby pass this interim order for regulating the business of Rose Valley Marketing India Ltd. Ambassa Branch operating under Ambassa area. The order is passed after conduct of hearing on 16.08.2013 wherein the Manager of the said Branch Office/Company is present as per provision of The Tripura Protection of Interest of Depositors (In Financial Establishments) (Amendment) Act and Rules 2011. On the basis of hearing, the following irregularities have been detected, therefore, the business is found to be of illegal in nature and against the provisions of the Tripura Protection of Interest of Depositors (In Financial Establishments) (Amendment) Act, and Rules 2011. The below mentioned irregularities were found: 1) As per the report submitted in r....
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....of passing of this order, a copy of the order to endorsed to this office. (3) Also a Public Notice to be issued that from 17/08/2013 Rose Valley Marketing India Ltd. Ambassa shall stop accepting any new bookings, renewal of old bookings and other financial collections from the public till the settlement of the dispute issues. (4) It is also hereby ordered that, the Rose Valley Marketing India Pvt. Ltd. Ambassa Branch shall continue to open its office like earlier business hours and continue to give payments on maturity as well as pre-maturity withdrawals to the public on demand basis. They should not refuse payments to any one, if, he has invested in the company and is eligible. (5) It is also ordered that the Branch office shall not transfer its Bank Balance or moveable assets as reported in the reports to other branches or other places. They can only make maturity and prematurity withdrawal payment to the customers from the Bank balance. This Interim Order given by the Competent Authority i.e. Sub-Divisional Magistrate, Ambassa under Act. This Order can be appealed to the Appellate Authority i.e. Secretary Finance, Govt. of Tripura within one m....
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....ure-P/1 to the writ petition) which was issued on the basis of a report dated 27.09.2013 submitted by a team constituted by the designated authority, the Sub-Divisional Magistrate, Amarpur, Gomati Tripura for examining the nature of the deposits collected by the petitioner. From the report, it appeared that without any authority, the petitioner has been collecting the deposits illegally and they do not have any certificate of registration or approval from the competent authority like the SEBI or the RBI. Therefore, the petitioner was asked to show cause why the restraint order under Section 3A(7) of the Principal Act shall not be passed prohibiting them from collecting money from the public or transferring or altering the bank balance, movable or immovable properties of the petitioner. The petitioner by filing a reply made some statement but could not show or state of any authority to collect such deposits. Even they have circuitously questioned competence of the designated authority in such investigation contending that except the RBI or the SEBI none has such power to inquire into the allegation. On the face of such reply and the statement that was made by them, the impugned orde....
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....nity has been granted to the petitioner. 42. Mr. B.C. Das, learned Advocate General appearing for the respondents has submitted that the petitioner nowhere stated that on what capacity they are collecting the deposits or collecting the subscriptions form the individuals and/or publishing advertisement of exorbitant repayment. Unless their license or approval is demonstrated, they cannot have any locus to challenge the action of the respondents. So far the question of affording reasonable opportunity is concerned. Mr. Das, learned Advocate General has submitted that affording of the reasonable opportunities cannot be turned into empty formalities. The petitioner has to say how they have been prejudiced for not affording such opportunities. He has stated that the scope of hearing was afforded to the petitioner. 43. While appreciating the rival contentions as projected by the learned counsel appearing for the parties, it has surfaced that three aspects are primarily in the focus of the controversy: (i) Under what capacity the petitioner is collecting the deposits showing it to be the advance of the hotel booking and repayment with interests thereon; (ii) Whethe....
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.... only where statutory remedies are entirely ill- suited to meet the demand of extraordinary situations, as for instance where the very vires of the statute is in question or whether private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to Article 226 of the Constitution. But then the Court must have good and sufficient reason to bypass the alternative remedy provided by statute. Surely matters involving the revenue where statutory remedies are available are not such matters. We can also take the judicial notice of the fact that the vast majority of the petitions under Article 226 of the Constitutions are filed solely for the purpose of obtaining interim orders and thereafter prolong the proceedings by one device or the other. The practice certainly needs to be strongly discouraged." [Emphasis added] 46. The appellate authority, is no doubt, the best forum to agitate such grievance, but the petitioner has preferred to challenge the action on the ground of denying the reasonable opportunity to have their say. The petitioner has miserably failed to show any piece of docu....