(i) where, upon complaints received from a number of depositors that any Financial Establishment has defaulted the return of deposits after maturity, or has failed to pay interest on deposits or has failed to provide the service for which the deposit had been made and the Government is of the opinion that an action under the sub-section (5) of section 17 is not in public interest or that it is likely to adversely affect the interest of other depositors, or
(ii) where the Government has reason to believe that any Financial Establishment is acting in a calculated manner with an intention to -6- I ! ' Application to the District and Session Court.
Punishment for offences.
Compunding of offence.
defraud the depositors, and the Government is satisfied that such Financial Establishment is not likely to return the deposits or to make payment of interest or to provide the service, the Governmentmay, in order to protect the interest of the depositors of such Financial Establishment, pass an ad-interim order attaching the movable or immovable property alleged to have been procured either in the name of the Financial Establishment or in the name of any other person from and out of the deposits collected by the Financial Establishment, or if it transpires that such movable or immovable property is not available for attachment or not sufficient for repayment of the deposits, such other property of the said Financlal Establishment or the promoter, partner, director, manager or member of the said Financial Establishment to the extent of his default, or such other properties of that person in whose name properties were purchased from and out of the deposits collected by the Financial Establishment, as the Government may deem fit, and transfer the control over the said movable or immovable property to the Competent Authority.
19. (1) Upon receipt of the orders of the Government under section 18, the Competent Authority shall apply within 30 (thirty) days to the District and Sessions Court having jurisdiction for making the ad-interim order of attachment absolute, and for a direction to sell the property so attached by public auction and realize the sales proceeds.
(2) An application under sub-section (1) shall be accompanied by one or more affidavits, stating the grounds on which the belief that the Financial Establishment has committed any default or is likely to defraud, the amount of money or value of other property believed to have been procured by means of the deposit, and the details if any, of the persons in whose name such property is believed to have been .invested or purchase out of the deposits or any other property attached under section 18.
(3) For the purpose of crediting and dealing with the money realized by the Competent Authority, it shall open a separate bank account in any Scheduled commercial bank.
CHAPTER V
20. Notwithstanding anything contained in chapter IV, where any Financial Estabiishment defaults the return of the deposits, or fails to return in any kind, or fails to render service for which the deposit had been made, every person responsible for the management of the affairs of the Financial Establishment shall be punished with imprisonment for a term which may extend to ten years and with fine which my extend to one lakh of rupees or both, and such Financial Establishment shall also be liable for fine which my extend to one lakh of rupees.
21. (1) An offence punishable under section 20 may, before the institution of the prosecution, be compounded by the Competent Authority, and -7- Power to try offences Power to Court for attachment, sale, realization, and distribution.
after the institution of the prosecution, be compounded by the Competent. Authority with the permission of the Court, on payment of ,_ the entire amount dug to thg caoosrtors with interest.
(2) Where an offence has been compounded under sub-section
(1), no proceeding or further proceeding, as the case may be, shall be taken or continued against the offender, in respect of the offence so compounded and the offender if in custody, shall be discharged forthwith.
CHAPTER VI
22. (1) An offence punishable under this 'Act shall be tried by a Court of Session having jurisdiction. Any case pending in any other Court to which the provisions of this Act apply shall stand transferred to the respective Court of Sessions having jurisdiction.
(2) When trying any case, the Court may also try any offence, other than an offence specified in section 20, with which the accused may, under the Code of Criminal Procedure, 1973 (2 of 1974), be charged, at the same trial
23. (1) Upon receipt of an application under section 19, the Court shall issue to the Financial Establishment or to any other person whose property is attached by the Government under section 18, a notice accompanied by copies of the application and affidavits, and of the evidence if any recorded, calling upon it/him to show cause on a date to be specified in the notice why the order of attachment should not be made absolute, and the property so attached sold in public auction.
(2) The Court shall also issue such notice to all other persons represented to it as having or being likely to claim any interest in the property of the Financial Establishment or the person to whom the notice is issued, calling upon such person to appear on the same date as that specified in the notice and make objection if he so desires to the attachment of the property or any portion thereof on the ground that he has an interest in such property or portion thereof,
(3) Any person claiming an interest in the property attached or any portion thereof may, notwithstanding that no notice has been served upon him under this section, make an objection as aforesaid to the Court at any time before an order is passed under sub-section (4) or sub-section (6).
(4) If no cause is shown and no objection are made on or before the specified date, the Court shall forthwith pass an order making the adinterim order of attachment absolute, and direct the Competent Authority to sell the property so attached by public auction and realize the sales proceeds.
(5) If cause is shown or any objection is made as a aforesaid, the Court shall proceed to investigate the same, and in doing so as regards the examination of the parties and in other respect the Court shall, subject to the provisions of this Act, follow the procedure and exercise -8- / i t, j Attachment of property of maJafide transferees.
Security in lieu of attachment.
all the powers of a Court in hearing a suit under the Code of Civil Procedure, 1908 (V of 1908) and any person making an-objection shall ·be required to adduce evidence to show that at the date of attachment he had some interest in the property attached.
(6) After investigation under sub-section (5), the Court shall pass an order within a period of one hundred and eighty days from the date of receipt of an application under sub-section(1) of section 19 either making the ad-interim order of attachment absolute or varying it by releasing a portion of the property from attachment or canceling the ad-interim order of attachment, and then direct the Competent Authority to sell the property attachment by public auction and realize the sale proceeds:
Provided that the Court shall not release from attachment any interest which it is satisfied that the Financial Establishment or the person referred to in sub-section(1) has in the property unless it is also satisfied that there will remain under attachment amount or property of value not less than the value that is required for repayment to the depositors of such Financial Establishment.
(7) The Court shall, on an application by the Competent Authority, pass such order or issue such direction as may be necessary for the equitable distribution among the depositors, of the money attached or realized out of the sale of attached property.
24. (1) Where the assets available for attachment of a Financial Establishment or the other person referred to in section 18 are found to be less than the amount or value which such Financial Establishment is required to repay to the depositors and where the Court is satisfied by affidavit or otherwise that there is reasonable cause for believing that the said Financial Establishment has property otherwise than in good faith and for consideration, the Court may, by notice, require any transferee of such property, whether or not he received the property directly from the said Financial Establishment, to appear on a date to be specified in the notice and show cause why so much of the transferee's property as is equivalent to the proper value of the property transferred should not be attached.
(2) Where the said transferee does not appear and show cause on the specified date, or where, after investigation in the manner provided in sub-section (5) of section 23, the Court is satisfied that the transfer of the property to the said transferee was not in good faith and for consideration, the Court shall order the attachment of so much of the said transferee's property as in the opinion of the Court is equivalent to the proper value of the property transferred.
25. Any Financial Establishment or person whose property has been or is about to be attached under the Act may at any time apply to the Court for permission to give security in lieu of such attachment, and where the security offered and given is in the opinion of the Court satisfactory and sufficient, it may cancel the ad-interim order of attachment or, as the case may be, refrain from passing an order of attachment.
-9- ~dministrationof )roperty attached.
Appeal.
Act to override other laws.
Power to make rules.
26. The Court may, on the application of any person interested in any property attached under this Act, and after giving the Competent Authority an opportunity of being heard, make such orders as the Court considers just and reasonable for:
(a) providing from such of the property attached as the applicant claims as interest in such sums as may be reasonably necessary for the maintenance of the applicant and of his family and for expenses connected with the defense of the applicant where criminalprcceedinqs have been instituted against him in the Court under section 20;
(b) safeguarding so far as may be practicable the interest of any business affected by the attachment and in particular in the interest of any partners in such business.
27. Any person including the Competent Authority, if aggrieved by an order of the Court, may appeal to the High Court within thirty days from the date of order.
CHAPTER VII
28. Save as otherwise provided in this Act, the provision of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any otherlaw or custom or usage or instrument for the time being in force.
29. (i) The Government may make rules for carrying out the provisions of this Act.
(ii) Every rule made State Government under this Act shall be laid, as soon after it is made, before the State Legislature.
By Order.
R.K. PURKA YASTHA (SSJS) Legal Remembrancer- cum- Secretary Law Department File No: 16 (82)ILDIP12010 J' S.G.P.G. - 62/Gazette/100 Cps./24.02.2010 GOVERNMENT SIKKIM EXTRAO RDI NARY PUBLISHED BY AUTHORITY GAz,ETTE Gangtok Tuesday 31st March, 2020 No. 90 LAW DEPARTMENT GOVERNMENT OF SIKKIM GANGTOK No.2lLDl20 Dated : 31.03.2020 NOTIFICATION The following Act passed by the Sikkim Legislative Assembly and having received assent of the Governor on 25h day of March, 2020 is hereby published for general information :- THE STKKIM PROTECTION OF INTERESTS OF DEPOSITORS (tN FTNANCIAL ESTABLISHMENTS) AMENDMENT ACT, 2020 (ACT NO. 2 OF 2020) AN ACT to amend the Sikkim Protection of lnterests of Depositors (ln Financial Establishments) Act,