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TMI Blog1986 (11) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... a maximum of 250 depositors in all, in the case of a firm, excluding in either case depositors who are relatives of the individuals or any of the partners. M/s. Dhanalakshmi Consolidated Finance and Industrial Investments, 158, Commander-in-Chief Road, Madras-105, and Asian Integrated Finances and Industrial Corporation, 95, Mount Road, Madras-2, are two partnership firms, hereinafter referred to as "the firms". On the belief entertained that these firms and a few others were accepting deposits in contravention of the provisions of section 45S of the Act, the Reserve Bank of India filed three petitions before the Chief Metropolitan Magistrate, Egmore, for the issue of warrants for search and seizure of documents and registers belonging to the firms, which as per the information of the bank, were located in three different places. Search warrants were issued on February 28, 1986, as prayed for by the Chief Metropolitan Magistrate. In pursuance of those warrants, several documents were seized by the police on March 1, 1986, from the above said three premises in the presence of an officer of the Reserve Bank of India. All those documents have been produced before the Magistrate. Befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore this court by the Reserve Bank of India on several grounds, viz ., the Sessions Court, acting as a revisional authority, should not have interfered in the matter when there was no manifest illegality in the warrant; since the order of warrant was not challenged, there was no jurisdiction for the revisional court to order return of the documents; the firms have not ceased to exist factually; the action of the bank was bona fide and based on materials available to it on the date of the application for issue of a search warrant; the Magistrate had before him the facts placed by the bank justifying its belief that certain documents relating to acceptance of deposits in contravention of the provisions of section 45S of the Act were secreted in some place; the question as to whom the documents and registers now belonged to was irrelevant; the documents were to be considered as secreted since they were not made available to the authorities of the bank for scrutiny; the observation of the Sessions Court that the Reserve Bank had knowledge that the company was in existence when it has chosen to apply for a search warrant under Chapter III-C instead of invoking the provisions of Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of law for easy reference. Section 45S(1) of the Act reads as follows : "No person, being an individual or a firm or an unincorporated association of individuals shall, at any time, have deposits from more than the number of depositors specified against each, in the table below : TABLE ( i ) Individual Not more than twenty-five depositors excluding depositors who are relatives of the individual. ( ii ) Firm Not more than twenty-five depositors per partner and not more than two hundred and fifty depositors in all, excluding, in either case, depositors who are relatives of any of the partners. ( iii ) Unincorporated association of individuals Not more than twenty-five depositors per individual and not more than two hundred and fifty depositors in all, excluding, in either case, depositors who are relatives of any of the individuals constituting the association". Section 58B(5A) of the Act reads as follows : "If any person contravenes any provision of section 45S, he shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to twice the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent points out that prosecution under section 58C of the Act is possible for a contravention or default referred to in section 58B of the Act that the relevant sub-section of section 58B of the Act is sub-s. (5A) which deals with contravention of any provision of section 45S of the Act invoked by the bank and that as per section 45S, a person is denned as being an individual, or a firm, or an unincorporated association of individuals. Then, he argues that the word "being" denotes a continuous existence of the firm till the time of prosecution and that when the existence of the firm has come to an end, there cannot be any prosecution. This contention is obviously fallacious. In the first place, the word "being" used in section 45S of the Act is only to enumerate the categories of persons in respect of which the limitation of acceptance of deposits is indicated in the table appearing in that section "Being" is not a progressive form which would indicate necessarily a continuance for a period. It is only a present participle indicating, the state, the position and the action, the duration of which will depend on the circumstances of each case. Secondly, section 45S of the Act deals ..... X X X X Extracts X X X X X X X X Extracts X X X X
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