Date:15/03/2007 URL: http://www.thehindu.com/2007/03/15/stories/2007031503710600.htm

Andhra Pradesh

Margadarsi revision petition dismissed

Special Correspondent

HYDERABAD: A sessions court here on Wednesday dismissed a revision petition filed by Margadarsi Financiers seeking to stay a lower court's warrant to search the head office and two branches of the firm that led to seizure of voluminous records pertaining to depositors last month.

Upholding the search warrant, First Additional Metropolitan Sessions Judge S. Anantasayana Prasad observed in his order that there was no irregularity or illegality with it. "The revision petition has failed and accordingly is dismissed." The judge said it was quite evident that Margadarsi collected deposits in violation of Sec. 45 (S) (1). He dismissed the contention of the firm that as a Hindu Undivided Family, it did not attract the provision. The provision was very clear while prohibiting an individual or a firm or an unincorporated association of individuals from accepting any deposits from public. Sec. 45 (S) mandated that if deposits were received in violation of 45 (S) (1), it should be repaid within three years from April 1, 1977. This was not complied with.

The search of Margadarsi premises was permissible only with regard to documents pertaining to deposits and nothing else. Secs. 45 (T) and 58 (B) (SA) of Reserve Bank of India Act made it clear that what was required for the Government to initiate action against Margadarsi for violation of 45 (S) was only information about total deposits collected by the firm which was Rs. 2,610.38 crore in March last year.