9911796707
TMI Blog2005 (9) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... pany's NOF was (-) ₹ 136.90 crores. The CRAR of the company was also negative. The required level of SLR was also not maintained by the company. As against the deposit liabilities of ₹ 135.73 crores it maintained only ₹ 1.66 lakhs which was far below the required level of 15%. The rating of the company's fixed deposit programme was down graded to CARE 'D' indicating high risk. The company defaulted in repayments matured deposits under CLB orders dated 22nd December, 2000. RBI received a large number of complaints from matured FD holders. The company is not solvent as outside liabilities are more than realisable value of its assets. The company was issued supervisory concern letter dated 28.8.2000 to rectify the inspection findings and other irregularities. The company was advised vide letter dated 8.1.2003 to submit a time bound action plan for achieving the minimum NOF of ₹ 25 lakhs. 5. The company failed to comply with above requirements and accordingly RBI issued a show cause notice on 6th December, 2003. The company's reply dated 26th December, 2003 to show cause notice did not contain: i)Any concrete proposal to rectify t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onally invalid. 3. Section 45-IA of the Reserve Bank of India Act, 1934 (hereinafter referred to as `the Act'.) was incorporated into the statute with effect from 9.1.1997 by the Act 23 of 1997. The situation which was sought to be remedied by Parliament can be gleaned from the Statement of Objects and Reasons which reads as follows:- Act 23 of 1997 :- The activities of the non-banking institutions and unincorporated bodies receiving deposits are regulated in terms of the provisions of Chapters III-B and III-C of the Reserve Bank of India Act, 1934, respectively. Until recently the emphasis was on regulating the receipt of deposits by Non-Banking Finance companies (NBFCS) as an adjunct to credit and monetary policies and to provide indirect protection to depositors. However, experience has shown that the provisions were neither sufficient to regulate the business activities of these companies nor do they provide adequate protection to depositors. 2. The Joint Parliamentary Committee which enquired into the irregularities in securities and banking transactions had recommended that the Government should examine whether the legislative framework for regulating NBFCs i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6. There are reports of several finance companies and unincorporated bodies having failed to repay the deposits collected from unsuspecting depositors who have been tempted by the attractive returns and incentives offered. Concern has been expressed in several quarters on the need to take urgent steps to regulate the activities of such companies and unincorporated bodies. 4. Sub-section (4) of Section 45-IA of the Act contains and enumerates all the factors which have to be kept in perspective to justify the grant or rejection of an application by an NBFC for a certificate of registration enabling it to commence or continue such business. It has not been contended before me that the Order that had been assailed before the Appellate Authority fails to address these factors, or in doing so arrives at an erroneous conclusion. The parameters within which the Appellate Authority could travel are circumscribed by a consideration of these very factors alone. In those rare cases where subsequent events have transpired which appear to have a significant impact on the impugned decision, the Appellate Authority may consider it appropriate to remand the case for fresh consideration. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve left the entire matter to the administrative authorities to make such orders as they choose to pass in exercise of unfettered discretion. The assessed, as has been pointed out before, has no right to even move an application when an appeal is pending before the appellate tribunal under Section 220(6) and it is only at the earlier stage of appeal before the Appellate Assistant Commissioner that the statute provides for such a matter being dealt with by the Income Tax officer. It is a firmly established rule that an express grant of statutory owner carries with it by necessary implication the authority to use all reasonable means to make such grant effective (Sutherland Statutory Construction, Third edition, Articles 5401 and 5402). The powers which have been conferred by Section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective.... 7. The Appellate Authority has taken into consideration the Orders passed by the Mumbai High Court on 12.3.2004 Avowedly, these were in Winding-up proceedings. By any consideration a company whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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