VISALAM CHIT FUND LIMITED Vs. N KRISHNAMURTHY RAO DEPUTY CHIEF OFFICER DEPARTMENT OF NON BANKING COMPANIES RESERVE BANK OF INDIA BANGALORE

JUDGEMENT

(1.) THIS is a petition under s. 482 of the Code of Criminal Procedure to quash the proceedings in C. C. No. 254 of 1977 on the file of the Chief Judicial Magistrate, Tirunelveli. The petitioners are M/s. Sree Visalam Chit Fund Ltd. represented by its managing director and the directors of the said chit fund. The respondent filed a complaint in the court of the Chief Judicial Magistrate, Tirunelveli, under ss. 58B(5) and (6) and 58C of the Reserve Bank of India Act, 1934 (hereinafter called "the Bank Act"), and under s. 190, cl. (1), of the Cr. P. C., 1973, against the petitioners on the allegation that the first petitioner accepted deposits from a proprietary concern in excess of the stipulated limits set out in the directions issued under the Bank Act by the Reserve Bank of India. The case was taken on file as C.C. No. 254 of 1977. The petitioners filed Crl.M.P. No. 774 of 1977, raising a preliminary objection to the maintainability of the complaint. The respondent countered the preliminary objection. The contention of the petitioner in this court as well as before the learned Chief Judicial Magistrate was that the first petitioner is a financial institution as defined in s. 45-I(c) of the Bank Act and not a non-banking institution within the meaning of the Bank Act, that only non-banking institutions are interdicted from receiving deposits, that financial institutions have not been placed under any such disability, that, therefore, the respondent to whom powers have been delegated by the Reserve Bank of India under s. 58E of the Bank Act to take cognizance of the offences committed by non-banking institutions, has no power to lay the complaint, and that, in any event, no offence has been committed by the first petitioner receiving deposits, as the first petitioner is only a financial institution, and not a non-banking institution.The respondent contended that the first petitioner is both a non-banking institution as well as a financial institution and, therefore, an offence has been committed by the first petitioner in receiving the deposits in violation of the directions of the Reserve Bank. Section 2(aii) of the Bank Act defines "the bank" as the Reserve Bank of India constituted by the Bank Act. Section 45-I(c) defines "financial institution" as any non-banking institution which carries on as its business or part of its business any of the following activities, namely :