Pre. Haryana Act No. 32 of 2014

An Act to protect the interest of depositors in financial establishment and for matters connected therewith or incidental thereto.

Be it enacted by the Legislature of the State of Haryana in the Sixty-fourth Year of the Republic of India as follows : -

S.1 Short title

This Act may be called the Haryana Protection of Interest of Depositors in Financial Establishment Act, 2013.

S.2 Definitions

In this Act, unless the context otherwise requires, -

(a) "competent authority" means the authority appointed under section 5;

(b) "deposit" includes and shall be deemed always to have included any receipt of money or acceptance of any valuable commodity by any financial establishment to be returned after a specified period or otherwise, either in cash or in kind or 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) an amount raised by way of share capital or by way of debenture, bond or any other instrument covered under the guidelines issued and regulations made under the Securities and Exchange Board of India Act, 1992 (Central Act 15 of 1992);

(ii)an amount contributed as capital by partners of a firm;

(iii) an amount received from a Scheduled bank or a coo

S.3 Fraudulent default by financial establishment

(l) A financial establishment which commits default in repayment of deposit or benefit in the form of interest, bonus, profit or in any other form as promised or fails to render any specified service promised against such deposit, or fails 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 commits such default 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 or failed to render the specific service, fraudulently.

(2) If any financial establishment defaults any repayment of deposit on maturity along with any benefit in the form of interest, bonus, profit or in any other form as

S.4 Attachment of properties on default of return of deposit

(1) Notwithstanding anything contained in any other law for the time being in force, -

(i) where upon complaint received from the depositor or otherwise, the District Magistrate is satisfied that any financial establishments has failed -

(a) to return the deposit after maturity or on demand by the depositor; or

(b) to pay interest or other assured benefit; or

(c) to provide the service promised against such deposit; or

(ii) where the District Magistrate has reason to believe that any financial establishment is acting in a calculated manner detrimental to the interests of the depositor, with intention to defraud them and if the District Magistrate 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, the District

S.5 Appointment of competent authority

The District Magistrate may while issuing order under sub-section (1) of section 4, appoint any officer not below the rank of the Assistant Collector First Grade as the competent authority to exercise control over the money and the properties attached by the District Magistrate under section 4.

S.6 Duties and powers of competent authority

(1) On receipt of order of appointment, the competent authority shall take such necessary steps, as it deems necessary or expedient for taking physical possession of all monies, properties and assets of the concerned financial establishment attached by the District Magistrate under section 4.

(2) The competent authority shall, within thirty days from the date of the publication of the said order, apply to the designated court, accompanied by one or more affidavits stating the grounds on which the District Magistrate has issued the said order under section 4 and the amount of money or other properties or assets belonging to or 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 designated court may deem fit.

(3) Without prejudice to the general

S.7 Assessment of assets and deposit liabilities

(1) Within thirty days from the date of appointment, the competent authority shall assess the deposit liabilities and the assets of the financial establishment and submit a report thereof to the designated Court.

(2) The competent authority thereafter shall issue notice either individually or by means of effective media publication, inviting the claims by secured creditors, if any, and also the depositors of the financial establishment to submit their claims with proper proof to establish the same.

(3) Every notice under sub-section (2) sent to or deemed to have been effected to claimants shall state that if the statement of claim is not sent to the competent authority before the expiry of the period of one month from the date of notice, the claim shall not be considered under the provisions of this Act.

(4) Every notice sent to a secured creditor shall require him to value the security before the expi

S.8 Report by competent authority

After making a report under section 7, the competent authority shall make an application to the designated court seeking permission to make payment to the depositors out of the money realised. While making such application, the competent authority shall assess the liability to the depositors and the other liabilities and in case the money attached or realisable is not sufficient to meet the entire liability, make a submission to the designated court seeking permission for making payment to the depositors and disburse the money as per the orders of the designated court.

S.9 Designated court

(1) For the purposes of this Act, the Government may, with the concurrence of the Chief Justice of the Punjab and Haryana High Court, by notification in the Official Gazette, constitute one or more designated courts in the cadre of a District Judge including Additional District Judge for such area or areas or for such case or class or group of cases, as may be specified in the notification.

(2) No court other than the designated court, shall have jurisdiction in respect of any matter to which the provisions of this Act are invoked.

(3) Any pending case in any other court to which the provisions of this Act apply, shall, stand transferred to the designated court from the date of issue of notification under sub-section (1).

S.10 Power of designated court regarding attachment

(1) Upon receipt of an application under section 6, the designated court shall issue to the financial establishment or to any other person whose property is attached and vested in the competent authority under section 4, a notice accompanied by the application, affidavits and other evidence, if any, recorded, calling upon the said establishment or the person to show cause on or before a date to be specified in the notice, as to why the order of the attachment should not be made absolute.

(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(l), calling upon all such persons to appear on the same date as specified in the notice and make objection, if they so desire, to the attachment of the property or any portion thereof, on the ground that th

S.11 Attachment of Property of malafide transferees.

(1) Where the assets available for attachment of a financial establishment or other person referred to in section 4 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 affidavit or otherwise, that there 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 as to 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 caus

S.12 Security in lieu of attachment

Any financial establishment or person whose property 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 order of attachment or refrain from making the order of attachment absolute, as the case may be.

S.13 Administration of property attached

The designated court may, on the application of any person interested in any property attached and vested in the competent authority under this Act and after giving the competent authority an opportunity of being heard, pass such order as the designated court considers just and reasonable for -

(a) providing from such property, so attached and vested in the competent authority as the applicant claims, an interest in such sums as may be reasonably necessary for the maintenance of the applicant and 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 3;

(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.

S.14 Appeal

Any person including the competent authority, if aggrieved by an order of the designated court, may appeal to the High Court within sixty days from the date of the order.

S.15 Special public prosecutor

The Government shall, by notification, appoint an advocate of not less than ten years standing at Bar as a Special Public Prosecutor or Special Government Pleader for the purpose of conducting the case in the designated court.

S.16 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 (Central Act 2 of 1974), for the trial of Sessions cases.

(2) All the provisions of the Code of Criminal Procedure, 1973 (Central Act 2 of 1974), 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 be the court of Magistrate.

(3) The offence punishable under this Act shall be cognizable.

S.17 Act to override other laws

Save as otherwise provided in this Act, the provisions of this Act shall have effect, notwithstanding anything inconsistent 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.

S.18 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.

S.19 Power to make rules

(1) The Government may, by notification in the Official Gazette, make rules to carry out the purposes of this Act.

(2) Every rule made under this Act shall be laid, as soon as may be, after it is made, before the House of the State Legislature, while it is in session.

S.20 Power to remove difficulties

If any difficulty arises in giving effect to the provisions of this Act, the Government may, by order, do anything, not inconsistent with the provisions of this Act, which appears to it to be necessary or expedient to remove the difficulty.