Fraudulent default by Financial Establishment

Fraudulent default by Financial Establishment.- Any financial establishment, which fraudulently defaults any repayment or deposit on maturity along with any benefit 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 other person or an employee responsible for the management of or conducting of the business or affairs of such financial establishments shall, on conviction, be punishable with imprisonment for a term which may extend to six years and with fine which may extend to one lakh rupees and such financial establishment shall also be liable for a fine which may extend to one lakh rupees or where such deposit is quantifiable in terms of money, twice the amount involved in such default, which is more;

Provided that in the absence of special and adequate reasons recorded in the judgement of the Court, the imprisonment shall not be less than six months and the fine shall not be less than twenty thousand rupees as against each individual and not less than one lakh rupees against such financial establishment.

Explanation.- For the purpose of this section, a financial establishment, which commits default in repayment of such deposit with such benefits in the form of interest, bonus, profit or in any other form as promised or fails to render any specified service promised against such deposit, or fails to render any specified service promised against such deposit, or fails to render any specific service agreed against the deposit with an intention of causing wrongful gain to one person or wrongful loss to another person or commits such defaults due to its inability arising out of impracticable or commercially not viable promises made while accepting such deposit or arising out of deployment of money or assets acquired out of the deposits in such a manner as it involves inherent risk in recovering the same which needed, shall be deemed to have committed a default or failed to render the specific service, fraudulently.