DHARAMVIR SINGH Vs. UNION OF INDIA

JUDGEMENT

(1.) Petitioners, who are citizens of Gwalior city, have filed this Public Interest Litigation mentioning the facts that thousands of residents of the district have been fraudulently cheated by various companies and their hard earned money has been misappropriated. The companies have been growing rapidly in the district and they have been receiving deposits from the citizens of the area in the name of various schemes. However, the real purpose of the Companies is to receive deposits from the citizens and they promised the persons to give them higher return of interest from 15 % to 20 %. In order to carry out the afore said activities the companies have adopted various fictitious methods in the name of selling and purchasing of cattle, selling and purchasing of plots and selling and purchasing of other goods. However, in the books of the companies fictitious entries have been made and in the name of sale and purchase by way of sham transactions and the companies have been receiving deposits from the citizens with a promise to give regular interest or returns on the deposits. In doing so the companies have not taken any permission from the Reserve Bank of India and also no registration is made under the provisions of the Companies Act and the Banking Regulation Act, 1949 and also the provisions of the Madhya Pradesh Nikshepakon Ka Hiton Ka Sanrakshan Adhiniyam 2000, hereafter referred to as the 'Act of 2000' have not been complied with. This Court vide order dated 17.03.2011 issued certain directions and directed the State authorities to file specific affidavit that what action has been taken by them in this regard.

(2.) District Magistrate, Gwalior, vide order dated 4th May 2011 passed orders under Section 144 Cr. P.C. In the aforesaid order the District Magistrate has mentioned that he had received complaints from various investors against the companies and directed the related concerned police stations to conduct investigation in the matter. The Deputy Secretary (Finance) vide letter dated 12.11.2009 also directed to take action against the companies, who have been in the business of collection of money. The Collector further observed that in accordance the investigation report received from police department it has been found that the non-banking finance companies working in the Gwalior district have not been registered with the Reserve Bank of India. The companies have also not informed the Competent Authority under the provisions of the Act of 2000 about their initiation of business. The companies have also not submitted any application for registration before the Reserve Bank of India nor the aforesaid companies have sufficient amount to return the deposits of the investors. Thereafter, the District Magistrate further observed that he is satisfied that the companies have played fraud with the public and they would not be able to return the money which have been collected by them fraudulently from the public and there would be a law and order problem in the area. He further mentioned that it is necessary to take action against the aforesaid companies and ordered to seal the premises of the companies and also ordered that the following companies be prohibited from working in the district: <FRM>JUDGEMENT_95_JLJ3_2011_1.html</FRM>

(3.) Thereafter, the Collector also seized various properties of the aforesaid Companies vide order dated 15.06.2011, 28.05.2011, 03.06.2011, 23.06.2011, 06.06.2011, 25.06.2011, and 01.06.2011. Copies of the orders have been supplied by the State in an application for furnishing information before this Court.