Excelsior Correspondent
JAMMU, Sept 4: State Government is going to bring a legislation to check duping of the gullible public of hard earned money by the financial establishments and a draft bill in this regard prepared by the Finance Department is being placed before the State Cabinet, which is meeting under the chairmanship of Chief Minister, Omar Abdullah tomorrow morning at Civil Secretariat, Srinagar.
Authoritative sources told EXCELSIOR that a large number of unauthorized and unknown financial establishments have duped the innocent public of hard earned savings worth tens of crores of rupees by suddenly closing their operations in the State during the past some years. During investigations, most of these establishments turned out to be bogus as their sole aim was to loot the general public by offering whimsical returns on deposits and commercially impossible low interest rates on loans.
The promoters of these bogus financial establishments fled from the State leaving thousands of innocent citizens in quandary and what to talk of getting returns as promised these firms defaulted even in the return of the principal sums to the depositors and advance services charges taken from them, sources said.
In order to take appropriate measures to curb the unscrupulous activities of such financial institutions and protect the interests of the public at large, the State Government has decided to bring legislation whereby stringent punishment would be taken against bogus financial establishments, sources further said, adding “the draft of the legislation prepared by the Financial Department headed by Abdul Rahim Rather after detailed exercise is being placed before the Cabinet for final decision”.
“As per the draft legislation, the Government may attach money or property acquired by the financial establishments or personal assets of the promoters, partners, directors, managers of the erring financial establishments if the Government is satisfied that the financial establishment has failed to return the deposit after maturity or on demand by depositors; failed to pay interest or other assured benefits and such financial establishment is not likely to return deposits or pay interest to the depositors”, sources disclosed.
They said that competent authority, which will be an officer not below the rank of an Additional Deputy Commissioner, would have sufficient powers in dealing with the assets under its custody, adding the competent authority will also have powers to sell the movable and immovable properties of the financial establishment”.
“If any financial establishment fraudulently defaults on any repayment of deposit on maturity along with benefits in the form of interest, bonus, profit or in any other form as promised or fraudulently fails to render service as assured against the deposit every person including the promoter, partner, director, manager or any employee responsible for the management or conducting of business of such financial establishment will be liable to punishment with imprisonment for a term, which may extend to six years and with fine which may extend to Rs 10 lakh”, sources informed.
The Court of Sessions having the territorial jurisdiction of such cases will be the designated court and any case or proceeding pending before any court or any authority in relation to the moneys, properties or assets of the financial establishment will be transferred to the respective designated courts.
In response to a question, sources said, “if the bill will be cleared by the Cabinet then it will be placed before the State Legislature during the forthcoming Session”.
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