The Bihar Protection of Interest of Depositors (In Financial Establishments) (Amendment) Act, 2013

AN ACT TO AMEND THE BIHAR PROTECTION OF INTEREST OF DEPOSITORS (IN FINANCIAL ESTABLISHMENTS) ACT, 2002 [BIHAR ACT, 18 OF 2002] Be it enacted by the Legislature of the State of Bihar in the Sixty-fourth year of the Republic of India follows :- 1. Short Title, extent and Commencement --

1. (1) This Act may be called the Bihar Protection of Interest of Depositors (In Financial Establishments) (Amendment) Act, 2013.
2. (2) It shall extend to whole of the State of Bihar.
3. (3) It shall come into force at once.

Amendment in section 2 of the Bihar Act, 18 of 2002 --

1. (1) In the said Act sub-section (a) and (b) of section- 2 shall be substituted by the following :- "(a) "Competent Authority" means any officer notified by the State Government or the Collector of the district or any officer, not below the rank of Additional Collector or equivalent in the district.
   • (b) "Designated Court" means the Designated Court Constituted under section 7;"
2. (2) The following Explanation shall be added after sub-section (d) of section 2 of the said Act :- Explanation - "It shall also include deposit taking business in disguised form like the business of real-estate, plantation, tours and travels, cattle rearing, hotels, resorts , amusement parks, supply of any valuable goods or service or gift thereof etc."

Insertion of new section 2A after section 2 of the Bihar Act, 18 of 2002- the following new section 2A shall be inserted, after section 2 of the said Act :- "2A Mandatory Intimation, Power to call for information and punishment for non compliance-

1. (1) Any Financial Establishment intending to establish an office and operate in the State of Bihar or any part thereof shall furnish information in writing to the Competent Authority about the details of its activities, areas of operation and/or business, supported by all necessary papers. This information shall also include the registration by the Registrar of Companies of the State Concerned as also about the registration and the license obtained from the Reserve Bank of India, Securities and Exchange Board of India or any other regulatory authority for the purpose aforesaid with details of its office structure and specific location/address : Provided that the Financial Establishment operating before the commencement of this Act shall furnish the requisite information to the Collector of the district/Competent Authority within 30 days of the commencement of this Act.
2. (2) The Competent Authority shall have the power to call for or require any information about the Financial Establishment or its office bearers including the promoter, director, partner or manager or members of such Financial Establishment or direct any office or authority of the Government or a local authority or any other person, to furnish such information as may be required, and such Financial Establishment or its office bearer or promoter, director, partner or manager or members of such Financial Establishment or officer or authority of the Government or local authority or any other person, shall forth with furnish such information to the Competent Authority.
3. (3) Failure to furnish the requisite information to the Competent Authority as under sub-section (1) of section 2A or furnishing wrong or misleading statement, or refuse to produce or to permit inspection of records/documents etc, as required under section 3A, the Collector of the District under whose local jurisdiction the Financial Establishment conducting its business operation, if satisfied, may after giving reasonable opportunity to the Financial Establishment in accordance with law, impose a fine of up to Rs. 100000/- (Rupee one Lakh) for every such default. "

Amendment in section 3 of the Bihar Act, 18 of 2002 -- In the said Act, the existing provision of section 3 will be read as sub-section (1) after that, The following new sub-section (2) shall be added, after sub-section (1) of section 3 of the said Act :- "(2) No police official below the rank of Deputy Superintendent of police or equivalent, having jurisdiction, shall investigate an offence under this Act : Provided that if a police officer not below the rank of an Inspector of police is authorized by the State Government in this behalf by general or special order, he may also investigate any such offence without the order of Metropolitan Magistrate or a Magistrate of the first class, as the case may be, or make arrest thereof without warrant."

Insertion of new section 3A and section 3B after section 3 of the Bihar Act, 18 of 2002-- The following new section 3A and 3B shall be inserted, after section 3 of the said Act :- "3A Power to enter premises and inspect certain documents -

1. (1) The Competent Authority or any other authority not below the rank of the Sub divisional - Officer under him, for the furtherance of the purposes of this Act may enter and inspect any premises, where any register, book, record, paper, application, information in electronic storage and retrieval device or medium, instrument or proceedings are kept and to inspect them and to take such notes and extracts as it may deem necessary.
2. (2) Every person having in his custody or maintaining such register, book, record, paper, application, instrument or proceedings shall at all reasonable times produce or permit the Competent Authority or any other authority authorized by the Competent Authority to inspect them to take notes and extracts as they may deem necessary and if necessary seize and impound them : Provided that no residential accommodation (not being a place of business cum residence) shall be so entered and searched except on the authority of a search warrant issued by a Magistrate having jurisdiction over the area, and all searches under this section shall, so far as may be, be made in accordance with the provisions of the Code of Criminal Procedure, 1973. 3B Search, Seizure and confiscation of property and its management -
3. (1) where the Competent Authority, upon information and after such enquiry as he thinks fit and necessary, has reason to believe that any financial establishment or the promoter, partner, director, manager, member, employee or any other person responsible for the management of, or for conducting the business or affairs of such financial establishment—
   • (a) has committed any act which constitutes an offence under sub-section (1) of section 3; or (b) is in possession of any material of crime involved in an offence under sub-section (1) of section-3; or (c) is in possession of any records relating to an office under sub-section (1) of section-3; or (d) is in possession of any property relating to an office under sub- section (1) of section 3; such Competent Authority may, subject to the rules made in this behalf, authorize any officers---
     • (i) to enter, with such assistance as may be required, and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such records or proceeds of crime are kept;
     • (ii) to break /open the lock of any door, box, locker, safe, almirah etc;
     • (iii) where such officer has reason to believe that any property found in such search is likely to be concealed, transferred or dealt with any manner which will result in disposal of such property, he may make order for seizure of such record or property;
     • (iv) to place marks of identification on such records or make or cause to be made extracts or copies there from;
     • (v) to prepare a statement or an inventory of such records or property;
     • (vi) to examine on oath any person who is found to be in possession or control of any record or property, in respect of all or any of the matters relevant for the purpose of any investigation under the Act.
4. (2) Where it is not practicable to seize such record or property of any financial establishment or the promoter, partner, director, manager, member, employee or any other person responsible for the management of, or for conducting the business or affairs of such financial establishment, the officer authorized under sub-section (1), shall report the same to the Competent Authority who may, in such manner as may be prescribed, make an order to freeze/attach such property whereupon the property shall not be transferred or otherwise dealt with, except with the prior permission of the officer making such order, and a copy of the order shall be served on the person concerned.
5. (3) Where the Competent Authority has made an order under sub-section (1) or sub-section (2), it shall, within thirty days from the date of the publication of an order under sub-section (1) or sub-section (2), as the case may be, make an application supported by an affidavit stating the grounds on which such Competent Authority has issued the said order under that sub-section, to the Designated Court and the Designated Court shall, after giving an opportunity of being heard to the person concerned, make an order of confiscating such seized or freezed property of the financial establishment or the property of every person including the promoter, partner, director, manager, member, employee or any other person responsible for the management of, or for conducting the business or affairs of such financial establishment in the same manner as mentioned in section 4.
6. (4) Where an order of confiscation of seized or freezed property of the financial establishment or the property of every person including the promoter, partner, director, manager, member, employee or any other person responsible for the management of, or for conducting the business or affairs of such financial establishment has been made under sub-section (3), all right and title in such property shall vest to the Competent Authority free from all encumbrances.
7. (5) The Competent Authority may, in writing, appoint as many officers as it thinks fit, to perform the functions as an Administrator.
8. (6) The Administrator appointed under sub -section (5), shall receive and manage the property in such manner, and subject to such conditions, as may be prescribed.
9. (7) The Administrator shall, in such manner as may be prescribed, take such measures to dispose of the property which is vested in the Competent Authority appointed by the State Government, to protect the interest of the depositors."

Amendment in section 5 of the Bihar Act, 18 of 2002 - sub-section (1) and (2) of section 5 of the said Act shall be substituted by the following :- "(1) The Competent Authority shall exercise control over the money and the properties attached, by the Government order under section 4 of a Financial Establishment.

1. (2) The Competent Authority shall take such necessary actions as are necessary or expedient for taking physical possession of all the moneys and assets of the concerned financial establishment expeditiously and the Competent Authority shall have all the power which are necessary for the aforesaid purpose."

Amendment in section 6 of the Bihar Act, 18 of 2002 - sub-section (1) of section 6 of the said Act shall be substituted by the following :- "(1) The Competent Authority shall assess to deposit liabilities and the assets of the financial establishment and submit the statement thereof to the Designated Court, within 30 days of the order under section 4(1)."