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Issues involved: Restraining a Residuary Non-Banking Finance Company from accepting deposits, violation of fundamental rights, compliance with Reserve Bank of India regulations.
Summary: The petitioner, a Residuary Non-Banking Finance Company, challenged an order restraining it from accepting deposits, claiming it violated its fundamental right under Article 19(1)(g) of the Constitution. The petitioner argued that its operations had improved, and there was no emergent development warranting the order. The respondent contended that the petitioner had not followed RBI directions since receiving registration in 1998. After considering submissions, the court noted the petitioner's large number of depositors and employees. The court stayed the order, allowing deposits until June 2010, and directed compliance with RBI regulations. The case was listed for further hearing in July 2008. The petitioner, a Residuary Non-Banking Finance Company, was issued a show cause notice by the Reserve Bank of India based on inspections. Despite submitting a detailed reply and an action plan, the petitioner was restrained from accepting deposits beyond June 2010. The petitioner claimed no complaints were made by depositors to the RBI. The court stayed the order to prevent harm to depositors and employees, directing the petitioner to comply with RBI regulations. The court considered the petitioner's compliance with RBI regulations and the impact of the order on depositors and employees. It noted the lack of complaints from depositors and stayed the order, allowing deposits until June 2010. The petitioner was directed to fulfill RBI formalities and follow its directions. The case was scheduled for further proceedings in July 2008.
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