The much awaited Odisha Protection of Interests of Depositors (in financial establishment) Bill, 2011 becomes an Act with President Pranab Mukherjee on Tuesday giving his assent to it. The Act comes into force with immediate effect, enabling the State Government to act tough against the malpractices of the fraudulent financial institutions and recover the money of the depositors.
However, it would take around one month to formulate the rules for the proper implementation of the provisions of the Act, said Finance Minister Prasanna Acharya. The Act empowers the State Government to attach and confiscate the properties of fraudulent financial organizations to return the money to the affected depositors and initiate criminal action against erring financial institutions.
The Government can attach the money or other properties 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 organisation. Besides, if it transpires that such money or other property is not available for attachment or not sufficient for repayment of the depositors, other property of the tainted financial establishment or the promoter, director, partner, manager or member of the organization may be seized to get the money.
The Act empowers the Government to constitute a special court as competent authority by appointing District Magistrate or an Additional District Magistrate to try cases relating to the chit fund and other financial fraud and also exercise control over properties attached by the Government. The Government in consultation with the Chief Justice of the Odisha High Court can set up one or more designated courts for trial of the cases. Even the Government with the approval of the competent authority can confiscate the attached properties during the process of hearing.
As per the Act, for any default in return of the deposit or in payment of interest on the deposit, every persons responsible for the management of the affairs of the financial establishment would be punished with imprisonment for term which may extend to ten years and with fine which may extend to Rs 1 lakh. The Bill got the Presidential nod sixteen months since the Odisha Government submitted the legislation before the Union Home Ministry for processing on April 3, 2012. The legislation was passed by the Odisha Assembly on December 17, 2011.
lakhs of investors, who had lost their hard earned money through ponzy schemes and were in lurch, have got a sigh of relief with the hope to get back their deposits. Meanwhile the State Government has constituted a Judicial Commission headed by Justice RK Patra to probe the chit fund scam. The Commission which had already sought petitions through affidavits from the affected depositors and interested individuals would start hearing from September 6. The State Government also announced appointment of special prosecutors and fast track courts to dispose of the cases.