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RNI No. MAHBIL /2012/46128

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ORDINANCE No. 4 OF 2019.—The Muslim Women (Protection of Rights on Marriage)

Second Ordinance, 2019.

ORDINANCE No. 5 OF 2019.—The Indian Medical Council (Amendment) Second

Ordinance, 2019.

ORDINANCE No. 6 OF 2019.—The Companies (Amendment) Second Ordinance, 2019

ORDINANCE No. 7 OF 2019.—The Banning of Unregulated Deposit Schemes

Ordinance, 2019.

LAW AND JUDICIARY DEPARTMENT

Madam Cama Marg, Hutatma Rajguru Chowk, Mantralaya,

Mumbai 400 032, dated the 12th March 2019.

No. 383/B.—The following Ordinances promulgated by the President are hereby republished for general

information :—

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MINISTRY OF LAW AND JUSTICE

(LEGISLATIVE DEPARTMENT)

New Delhi, the 21st February, 2019/Phalguna 2, 1940 (Saka)

THE MUSLIM WOMEN (PROTECTION OF RIGHTS ON MARRIAGE)

SECOND ORDINANCE, 2019

(No. 4 of 2019)

Promulgated by the President in the Seventieth year of the Republic of India.

An Ordinance to protect the rights of married Muslim women and to prohibit divorce by pronouncing talaq

by their husbands and for matters connected therewith or incidental thereto ;

WHEREAS the Muslim Women (Protection of Rights on Marriage) Bill, 2017 has been passed by

the House of the People and is pending in the Council of States ;

AND WHEREAS the Muslim Women (Protection of Rights on Marriage) Ordinance, 2018 with certain

modifications was promulgated by the President on the 19th day of September, 2018 ;

AND WHEREAS the Muslim Women (Protection of Rights on Marriage) Bill, 2018 to replace the

said Ordinance has been passed by the House of the People and is pending in the Council of States ;

AND WHEREAS the Muslim Women (Protection of Rights on Marriage) Ordinance, 2018 cease to

operate on the 21st January, 2019, and to give continued effect to the provisions of the said Ordinance,

the Muslim Women (Protection of Rights on Marriage) Ordinance, 2019 was promulgated by the President

on the 12th day of January, 2019 ;

AND WHEREAS the Muslim Women (Protection of Rights on Marriage) Bill, 2018 replacing the Muslim

Women (Protection of Rights on Marriage) Ordinance, 2019 with necessary official amendments was

listed for consideration and passing in Rajya Sabha and it could not be taken up ;

AND WHEREAS to give continued effect to the provisions of the Muslim Women (Protection of

Rights on Marriage) Ordinance, 2019, it is necessary to take immediate necessary action in the matter ;

AND WHEREAS Parliament is not in session and the President is satisfied that circumstances exist

which render it necessary for him to take immediate action ;

NOW, THEREFORE, in exercise of the powers conferred by clause (1) of article 123 of the

Constitution, the President is pleased to promulgate the following Ordinance :—

CHAPTER I

PRELIMINARY

Short title, extent and commencement.—(1) This Ordinance may be called the Muslim Women

(Protection of Rights on Marriage) Second Ordinance, 2019.

(2) It shall extend to the whole of India except the State of Jammu and Kashmir.

(3) It shall be deemed to have come into force on the 19th day of September, 2018.

Definitions.—In this Ordinance, unless the context otherwise requires,—

(a) “electronic form” shall have the same meaning as assigned to it in clause (r) of sub-section

(1) of section 2 of the Information Technology Act, 2000 (21 of 2000) ;

(b) “talaq” means talaq-e-biddat or any other similar form of talaq having the effect of

instantaneous and irrevocable divorce pronounced by a Muslim husband ; and

Code of Criminal Procedure, 1973 (2 of 1974), in the area where the married Muslim woman resides.

¨É½þÉ®úÉ¹]Åõ ¶ÉÉºÉxÉ ®úÉVÉ{ÉjÉ ¦ÉÉMÉ ºÉ½þÉ, MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¨ÉÉSÉÇ 28-BÊ|É±É 3, 2019/SÉèjÉ 7-13, ¶ÉEäò 1941

CHAPTER II

Declaration of Talaq to be Void and Illegal

Talaq to be void and illegal.—Any pronouncement of talaq by a Muslim husband upon his wife,

by words, either spoken or written or in electronic form or in any other manner whatsoever, shall be void

and illegal.

Punishment for pronouncing talaq.—Any Muslim husband who pronounces talaq referred to in

section 3 upon his wife shall be punished with imprisonment for a term which may extend to three years,

and shall also be liable to fine.

CHAPTER III

PROTECTION OF RIGHTS OF MARRIED MUSLIM WOMEN

Subsistence allowance.—Without prejudice to the generality of the provisions contained in any

other law for the time being in force, a married Muslim woman upon whom talaq is pronounced, shall be

entitled to receive from her husband such amount of subsistence allowance for her and dependent children

as may be determined by the Magistrate.

Custody of minor children.—Notwithstanding anything contained in any other law for the time

being in force, a married Muslim woman shall be entitled to custody of her minor children in the event of

pronouncement of talaq by her husband, in such manner as may be determined by the Magistrate.

Offences to be cognizable, compoundable, etc.—Notwithstanding anything contained in the Code

of Criminal Procedure, 1973 (2 of 1974),—

(a) an offence punishable under this Ordinance shall be cognizable, if information relating to

the commission of the offence is given to an officer in charge of a police station by the married

Muslim woman upon whom talaq is pronounced or any person related to her by blood or marriage ;

(b) an offence punishable under this Ordinance shall be compoundable, at the instance of the

married Muslim women upon whom talaq is pronounced with the permission of the Magistrate, on

such terms and conditions as he may determine ;

bail unless the Magistrate, on an application filed by the accused and after hearing the married Muslim

woman upon whom talaq is pronounced, is satisfied that there are reasonable grounds for granting

bail to such person.

Repeal and Savings.—(1) The Muslim Women (Protection of Rights on Marriage) Ordinance,

2019 (Ord. 1 of 2019) is hereby repealed.

(2) Notwithstanding such repeal, anything done or any action taken under the Muslim Women

(Protection of Rights on Marriage) Ordinance, 2019 (Ord. 1 of 2019) shall be deemed to have been done

or taken under the provisions of this Ordinance.

RAM NATH KOVIND,

President.

DR. G. NARAYANA RAJU,

Secretary to the Government of India.

¦ÉÉMÉ ºÉ½þÉ--1+

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MINISTRY OF LAW AND JUSTICE

(LEGISLATIVE DEPARTMENT)

New Delhi, the 21st February, 2019/Phalguna 2, 1940 (Saka)

THE INDIAN MEDICAL COUNCIL (AMENDMENT) SECOND ORDINANCE, 2019

(No. 5 of 2019)

Promulgated by the President in the Seventieth year of the Republic of India.

An Ordinance further to amend the Indian Medical Council Act, 1956.

WHEREAS the Indian Medical Council (Amendment) Ordinance, 2018 was promulgated by the

President on the 26th day of September, 2018 ;

AND WHEREAS the Indian Medical Council {Amendment) Bill, 2018 to replace the said Ordinance

was introduced in the House of the People on 14th December, 2018 and the said Bill was considered

and passed in the said House on 31st December, 2018 ;

AND WHEREAS the Indian Medical Council (Amendment) Bill, 2018 could not be taken up for

consideration and passing in the Council of States ;

AND WHEREAS, as the Indian Medical Council (Amendment) Ordinance, 2018 would cease to

operate in view of the provisions of sub-clause (a) of clause (2) of article 123 of the Constitution, the

Indian Medical Council (Amendment) Ordinance, 2019 was promulgated by the President on the 12th

day of January, 2019 ;

AND WHEREAS the Indian Medical Council (Amendment) Bill, 2018, as passed by the House of

the People, could not be taken up for consideration and passing in the Council of States ;

AND WHEREAS the Indian Medical Council (Amendment) Ordinance, 2019 would cease to operate

on the 13th day of March, 2019 ;

AND WHEREAS Parliament is not in session and the President is satisfied that circumstances exist

which render it necessary for him to take immediate action ;

NOW, THEREFORE, in exercise of the powers conferred by clause (1) of article 123 of the

Constitution, the President is pleased to promulgate the following Ordinance :—

Short title and commencement.—(1) This Ordinance may be called the Indian Medical Council

(Amendment) Second Ordinance, 2019.

(2) (A) The provisions of this Ordinance shall, except sub-clause (i) of clause (c) of section 2, be

deemed to have come into force on the 26th day of September, 2018 ; and

(B) sub-clause (i) of clause (c) of section 2 shall be deemed to have come into force on the 12th

day of January, 2019.

Amendment of section 3A.—In section 3A of the Indian Medical Council Act, 1956 (102 of

1956),—

(a) in sub-section (1), for the words, brackets and figures “Indian Medical Council (Amendment)

Act, 2010”, the words, brackets and figures “Indian Medical Council (Amendment) Second Ordinance,

2019” shall be substituted ;

(b) in sub-section (2), for the words “three years”, the words “two years” shall be substituted ;

(i) for the words “seven persons”, the words “twelve persons” shall be substituted ;

(ii) for the words “and medical education”, the words “and medical education or proven

administrative capacity and experience” shall be substituted ;

(d) after sub-section (7), the following sub-section shall be inserted, namely.—

“(7A) The Board of Governors shall be assisted by a Secretary General who shall be

appointed by the Central Government on deputation or contract basis and he shall be the head

of the secretariat in the Council.”.

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MINISTRY OF LAW AND JUSTICE

(LEGISLATIVE DEPARTMENT)

New Delhi, the 21st February, 2019/Phalguna 2, 1940 (Saka)

THE COMPANIES (AMENDMENT) SECOND ORDINANCE, 2019

(No. 6 of 2019)

Promulgated by the President in the Seventieth year of the Republic of India.

An Ordinance further to amend the Companies Act, 2013.

WHEREAS the Companies (Amendment) Ordinance, 2018 was promulgated by the President on

the 2nd day of November, 2018 ;

AND WHEREAS the Companies (Amendment) Bill, 2019 to replace the Companies (Amendment)

Ordinance, 2018 has been passed by the House of People on the 4th day of January, 2019 and is pending

in the Council of States ;

AND WHEREAS in order to give continued effect to the provisions of the Companies (Amendment)

Ordinance, 2018, the Companies (Amendment) Ordinance, 2019 was promulgated on the 12th day of

January, 2019 ;

AND WHEREAS the Companies (Amendment) Bill, 2019 along with amendments to the said Bill

could not be taken up for consideration and passing in the Council of States ;

AND WHEREAS the Companies (Amendment) Ordinance, 2019 will cease to operate on the 13th

day of March, 2019 ;

AND WHEREAS it is considered necessary to give continued effect to the provisions of the

Companies (Amendment) Ordinance, 2019 ;

AND WHEREAS Parliament is not in session and the President is satisfied that circumstances exist

which render it necessary for him to take immediate action ;

NOW, THEREFORE, in exercise of the powers conferred by clause (1) of article 123 of the

Constitution, the President is pleased to promulgate the following Ordinance :—

Short tittle and commencement.—(1) This Ordinance may be called the Companies (Amendment)

Second Ordinance, 2019.

(2) It shall be deemed to have come into force on the 2nd day of November, 2018.

Amendment of Section 2.—In section 2 of the Companies Act, 2013 (hereinafter referred to as

the principal Act), in clause (41),—

(a) for the first proviso, the following provisos shall be substituted, namely :—

“Provided that where a company or body corporate, which is a holding company or a

subsidiary or associate company of a company incorporated outside India and is required to

follow a different financial year for consolidation of its accounts outside India, the Central

Government may, on an application made by that company or body corporate in such form

and manner as may be prescribed, allow any period as its financial year, whether or not that

period is a year :

Provided further that any application pending before the Tribunal as on the date of

commencement of the Companies (Amendment) Second Ordinance, 2019, shall be disposed

of by the Tribunal in accordance with the provisions applicable to it before such

commencement.” ;

(b) in the second proviso, for the words “Provided further that”, the words “Provided also that”

shall be substituted.

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Insertion of new section 10A.—After section 10 of the principal Act, the following section shall

be inserted, namely :—

“10A.

Commencement of business etc.—(1) A company incorporated after the

commencement of the Companies (Amendment) Second Ordinance, 2019 and having a share capital

shall not commence any business or exercise any borrowing powers unless—

(a) a declaration is filed by a director within a period of one hundred and eighty days of

the date of incorporation of the company in such form and verified in such manner as may be

prescribed, with the Registrar that every subscriber to the memorandum has paid the value of

the shares agreed to be taken by him on the date of making of such declaration ; and

(b) the company has filed with the Registrar a verification of its registered office as provided

in sub-section (2) of section 12.

(2) If any default is made in complying with the requirements of this section, the company shall

be liable to a penalty of fifty thousand rupees and every officer who is in default shall be liable to a

penalty of one thousand rupees for each day during which such default continues but not exceeding

an amount of one lakh rupees.

(3) Where no declaration has been filed with the Registrar under clause (a) of sub-section (1)

within a period of one hundred and eighty days of the date of incorporation of the company and the

Registrar has reasonable cause to believe that the company is not carrying on any business or

operations, he may, without prejudice to the provisions of sub-section (2), initiate action for the

removal of the name of the company from the register of companies under Chapter XVIII.

Amendment of section 12.—In section 12 of the principal Act, after sub-section (8), Amendment

of the following sub-section shall be inserted, namely :—

“(9) If the Registrar has reasonable cause to believe that the company is not carrying on any

business or operations, he may cause a physical verification of the registered office of the company

in such manner as may be prescribed and if any default is found to be made in complying with the

requirements of sub-section (1), he may without prejudice to the provisions of sub-section (8), initiate

action for the removal of the name of the company from the register of companies under Chapter

XVIII.”.

Amendment of section 14.—In section 14 of the principal Act,—

(i) in sub-section (1), for the second proviso, the following provisos shall be substituted,

namely :—

“Provided further that any alteration having the effect of conversion of a public company

into a private company shall not be valid unless it is approved by an order of the Central

Government on an application made in such form and manner as may be prescribed :

Provided also that any application pending before the Tribunal, as on the date of

commencement of the Companies (Amendment) Second Ordinance, 2019, shall be disposed

of by the Tribunal in accordance with the provisions applicable to it before such

commencement.” ;

(ii) in sub-section (2), for the word “Tribunal”, the words “Central Government” shall be

substituted.

Amendment of section 53.—In section 53 of the principal Act, for sub-section (3), the following

sub-section shall be substituted, namely :—

“(3) Where any company fails to comply with the provisions of this section, such company

and every officer who is in default shall be liable to a penalty which may extend to an amount equal

to the amount raised through the issue of shares at a discount or five lakh rupees, whichever is

less, and the company shall also be liable to refund all monies received with interest at the rate of

twelve per cent. per annum from the date of issue of such shares to the persons to whom such

shares have been issued.”.

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Amendment of section 64.—In section 64 of the principal Act, for sub-section (2), the following

sub-section shall be substituted, namely :—

“(2) Where any company fails to comply with the provisions of sub-section (1), such company

and every officer who is in default shall be liable to a penalty of one thousand rupees for each day

during which such default continues, or five lakh rupees whichever is less.”.

Amendment of section 77.—In section 77 of the principal Act, in sub-section (1), for the first

and second provisos, the following provisos shall be substituted, namely :—

“Provided that the Registrar may, on an application by the company, allow such registration to

be made—

(a) in case of charges created before the commencement of the Companies (Amendment)

Second Ordinance, 2019, within a period of three hundred days of such creation ; or

(b) in case of charges created on or after the commencement of the Companies

(Amendment) Second Ordinance, 2019, within a period of sixty days of such creation, on

payment of such additional fees as may be prescribed :

Provided further that if the registration is not made within the period specified—

(a) in clause (a) to the first proviso, the registration of the charge shall be made within

six months from the date of commencement of the Companies (Amendment) Second

Ordinance, 2019, on payment of such additional fees as may be prescribed and different

fees may be prescribed for different classes of companies ;

(b) in clause (b) to the first proviso, the Registrar may, on an application, allow such

registration to be made within a further period of sixty days after payment of such advalorem

fees as may be prescribed.”.

Amendment of section 86.—Section 86 of the principal Act shall be numbered as sub-section (1)

thereof and after sub-section (1) as so numbered, the following sub-section shall be inserted, namely :—

“(2) If any person wilfully furnishes any false or incorrect information or knowingly suppresses

any material information, required to be registered in accordance with the provisions of section 77,

he shall be liable for action under section 447.”.

10.

Substitution of new section for section 87.—For section 87 of the principal Act, the following

section shall be substituted, namely :—

“87.

Rectification by Central Government in Register of charges.—The Central Government

on being satisfied that —

(a) the omission to give intimation to the Registrar of the payment or satisfaction of a

charge, within the time required under this Chapter ; or

(b) the omission or misstatement of any particulars, in any filing previously made to the

Registrar with respect to any charge or modification thereof or with respect to any memorandum

of satisfaction or other entry made in pursuance of section 82 or section 83,

was accidental or due to inadvertence or some other sufficient cause or it is not of a nature to

prejudice the position of creditors or shareholders of the company, it may, on the application of the

company or any person interested and on such terms and conditions as it deems just and expedient,

direct that the time for the giving of intimation of payment or satisfaction shall be extended or, as

the case may require, that the omission or misstatement shall be rectified.”.

11.

Amendment of section 90.—In section 90 of the principal Act,—

(i) for sub-section (9), the following sub-section shall be substituted, namely :—

“(9) The company or the person aggrieved by the order of the Tribunal may make an

application to the Tribunal for relaxation or lifting of the restrictions placed under sub-section (8),

within a period of one year from the date of such order :

Provided that if no such application has been filed within a period of one year from the

date of the order under sub-section (8), such shares shall be transferred, without any

¨É½þÉ®úÉ¹]Åõ ¶ÉÉºÉxÉ ®úÉVÉ{ÉjÉ ¦ÉÉMÉ ºÉ½þÉ, MÉÖ¯û´ÉÉ®ú iÉä ¤ÉÖvÉ´ÉÉ®ú, ¨ÉÉSÉÇ 28-BÊ|É±É 3, 2019/SÉèjÉ 7-13, ¶ÉEäò 1941

restrictions, to the authority constituted under sub-section (5) of section 125, in such manner

as may be prescribed ;

(ii) in sub-section (10),—

(a) after the word “punishable”, the words “with imprisonment for a term which may extend

to one year or” shall be inserted ;

(b) after the words “ten lakh rupees”, the words “or with both” shall be inserted ;

12.

Amendment of section 92.—In section 92 of the principal Act, for sub-section (5), the following

sub-section shall be substituted, namely :—

“(5) If any company fails to file its annual return under sub-section (4), before the expiry of the

period specified therein, such company and its every officer who is in default shall be liable to a

penalty of fifty thousand rupees and in case of continuing failure, with a further penalty of one hundred

rupees for each day during which such failure continues, subject to a maximum of five lakh rupees.”.

13.

Amendment of section 102.—In section 102 of the principal Act, for sub-section (5), the

following sub-section shall be substituted, namely :—

“(5) Without prejudice to the provisions of sub-section (4), if any default is made in complying

with the provisions of this section, every promoter, director, manager or other key managerial

personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees or

five times the amount of benefit accruing to the promoter, director, manager or other key managerial

personnel or any of his relatives, whichever is higher.”.

14.

Amendment of section 105.—In section 105 of the principal Act, in sub-section (3), for

Amendment of for the words “punishable with fine which may extend to five thousand rupees”, the words

“liable to a penalty of five thousand rupees” shall be substituted.

15.

Amendment of section 117.—In section 117 of the principal Act, for sub-section (2), the

following sub-section shall be substituted, namely :—

“(2) If any company fails to file the resolution or the agreement under sub-section (1) before

the expiry of the period specified therein, such company shall be liable to a penalty of one lakh

rupees and in case of continuing failure, with a further penalty of five hundred rupees for each day

after the first during which such failure continues, subject to a maximum of twenty-five lakh rupees

and every officer of the company who is in default including liquidator of the company, if any, shall

be liable to a penalty of fifty thousand rupees and in case of continuing failure, with a further penalty

of five hundred rupees for each day after the first during which such failure continues, subject to a

maximum of five lakh rupees.”.

16.

Amendment of section 121.—In section 121 of the principal Act, for sub-section (3), the

following sub-section shall be substituted, namely :—

“(3) If the company fails to file the report under sub-section (2) before the expiry of the period

specified therein, such company shall be liable to a penalty of one lakh rupees and in case of

continuing failure, with a further penalty of five hundred rupees for each day after the first during

which such failure continues, subject to a maximum of five lakh rupees and every officer of the

company who is in default shall be liable to a penalty which shall not be less than twenty-five thousand

rupees and in case of continuing failure, with a further penalty of five hundred rupees for each day

after the first during which such failure continues, subject to a maximum of one lakh rupees.”.

17.

Amendment of section 137.—In section 137 of the principal Act, in sub-section (3),—

(a) for the words “punishable with fine”, the words “liable to a penalty” shall be substituted ;

(b) for the portion beginning with “punishable with imprisonment”, and ending with “five lakh

rupees or with both”, the words “shall be liable to a penalty of one lakh rupees and in case of

continuing failure, with a further penalty of one hundred rupees for each day after the first during

which such failure continues, subject to a maximum of five lakh rupees” shall be substituted.

¦ÉÉMÉ ºÉ½þÉ--2

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18.

Amendment of section 140.—In section 140 of the principal Act, for sub-section (3), the

following sub-section shall be substituted, namely :—

“(3) If the auditor does not comply with the provisions of sub-section (2), he or it shall be liable

to a penalty of fifty thousand rupees or an amount equal to the remuneration of the auditor, whichever

is less, and in case of continuing failure, with a further penalty of five hundred rupees for each day

after the first during which such failure continues, subject to a maximum of five lakh rupees.”.

19.

Amendment of section 157.—In section 157 of the principal Act, for sub-section (2), the

following sub-section shall be substituted, namely :—

“(2) If any company fails to furnish the Director Identification Number under sub-section (1),

such company shall be liable to a penalty of twenty-five thousand rupees and in case of continuing

failure, with a further penalty of one hundred rupees for each day after the first during which such

failure continues, subject to a maximum of one lakh rupees, and every officer of the company who

is in default shall be liable to a penalty of not less than twenty-five thousand rupees and in case of

continuing failure, with a further penalty of one hundred rupees for each day after the first during

which such failure continues, subject to a maximum of one lakh rupees.”.

20.

Substitution of new section for section 159.—For section 159 of the principal Act, the following

section shall be substituted, namely :—

“159.

Penalty for default of certain provisions.— If any individual or director of a company

makes any default in complying with any of the provisions of section 152, section 155 and section

156, such individual or director of the company shall be liable to a penalty which may extend to fifty

thousand rupees and where the default is a continuing one, with a further penalty which may extend

to five hundred rupees for each day after the first during which such default continues.”.

21.

Amendment of section 164.—In section 164 of the principal Act, in sub-section (1), after clause

(h), the following clause shall be inserted, namely :—

“(i) he has not complied with the provisions of sub-section (1) of section 165.”.

22.

Amendment of section 165.—In section 165 of the principal Act, in sub-section (6), for the

portion beginning with “punishable with fine” and ending with “contravention continues”, the words “liable

to a penalty of five thousand rupees for each day after the first during which such contravention continues”

shall be substituted.

23.

Amendment of section 191.—In section 191 of the principal Act, for sub-section (5), the

following sub-section shall be substituted, namely :—

“(5) If a director of the company makes any default in complying with the provisions of this

section, such director shall be liable to a penalty of one lakh rupees.”.

24.

Amendment of section 197.—In section 197 of the principal Act,—

(a) sub-section (7) shall be omitted ;

(b) for sub-section (15), the following sub-section shall be substituted, namely :—

“(15) If any person makes any default in complying with the provisions of this section, he

shall be liable to a penalty of one lakh rupees and where any default has been made by a

company, the company shall be liable to a penalty of five lakh rupees.”.

25.

Amendment of section 203.—In section 203 of the principal Act, for sub-section (5), the

following sub-section shall be substituted, namely :—

“(5) If any company makes any default in complying with the provisions of this section, such

company shall be liable to a penalty of five lakh rupees and every director and key managerial

personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees and

where the default is a continuing one, with a further penalty of one thousand rupees for each day

after the first during which such default continues but not exceeding five lakh rupees.”.

26.

Amendment of section 238.—In section 238 of the principal Act, in sub-section (3), for the

words “punishable with fine which shall not be less than twenty-five thousand rupees but which may

extend to five lakh rupees”, the words “liable to a penalty of one lakh rupees” shall be substituted.

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27.

Amendment of section 248.—In section 248 of the principal Act, in sub-section (1),—

(a) in clause (c), for the word and figures “section 455,”, the words and figures “section 455 ;

or” shall be substituted ;

(b) after clause (c) and before the long line, the following clauses shall be inserted, namely :—

“(d) the subscribers to the memorandum have not paid the subscription which they had

undertaken to pay at the time of incorporation of a company and a declaration to this effect

has not been filed within one hundred and eighty days of its incorporation under sub-section

(1) of section 10A ; or

(e) the company is not carrying on any business or operations, as revealed after the

physical verification carried out under sub-section (9) of section 12.”.

28.

Amendment of section 441.—In section 441 of the principal Act,—

(a) in sub-section (1), in clause (b), for the words “does not exceed five lakh rupees”, the words

“does not exceed twenty-five lakh rupees” shall be substituted ;

(b) for sub-section (6), the following sub-section shall be substituted, namely :—

“(6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of

1974), any offence which is punishable under this Act with imprisonment only or with

imprisonment and also with fine shall not be compoundable.”.

29.

Amendment of section 446B.—In section 446B of the principal Act, for the portion beginning

with “punishable with fine” and ending with “specified in such sections”, the words “liable to a penalty

which shall not be more than one half of the penalty specified in such sections” shall be substituted.

30.

Amendment of section 447.—In section 447 of the principal Act, in the second proviso, for the

words “twenty lakh rupees”, the words “fifty lakh rupees” shall be substituted.

31.

Amendment of section 454.—In section 454 of the principal Act,—

(i) for sub-section (3), the following sub-section shall be substituted, namely :—

“(3) The adjudicating officer may, by an order—

(a) impose the penalty on the company, the officer who is in default, or any other

person, as the case may be, stating therein any non-compliance or default under the

relevant provisions of this Act ; and

(b) direct such company, or officer who is in default, or any other person, as the

case may be, to rectify the default, wherever he considers fit.” ;

(ii) in sub-section (4), for the words “such company and the officer who is in default”, the words

“such company, the officer who is in default or any other person” shall be substituted ;

(iii) in sub-section (8),—

(a) in clause (i), for the words “does not pay the penalty imposed by the adjudicating officer

or the Regional Director”, the words, brackets and figures “fails to comply with the order made

under sub-section (3) or sub-section (7), as the case may be,” shall be substituted ;

(b) in clause (ii)—

(i) for the words “Where an officer of a company”, the words “Where an officer of a

company or any other person” shall be substituted ;

(ii) for the words “does not pay the penalty”, the words, brackets and figures “fails to

comply with the order made under sub-section (3) or sub-section (7), as the case may

be,” shall be substituted.

32.

Insertion of new section 454A.—After section 454 of the principal Act, the following section

shall be inserted, namely :—

“454A.

Penalty for repeated default.—Where a company or an officer of a company or any

other person having already been subjected to penalty for default under any provisions of this Act,

again commits such default within a period of three years from the date of order imposing such

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penalty passed by the adjudicating officer or the Regional Director, as the case may be, it or he

shall be liable for the second or subsequent defaults for an amount equal to twice the amount of

penalty provided for such default under the relevant provisions of this Act.”.

33.

Repeal and Savings.—(1) The Companies (Amendment) Ordinance, 2019 (Ord. 3 of 2019) is

hereby repealed.

(2) Notwithstanding such repeal, anything done or any action taken under the said Ordinance shall

be deemed to have been done or taken under the corresponding provisions of this Ordinance.

RAM NATH KOVIND,

President.

DR. G. NARAYANA RAJU,

Secretary to the Government of India.

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MINISTRY OF LAW AND JUSTICE

(LEGISLATIVE DEPARTMENT)

New Delhi, the 21st February, 2019/Phalguna 2, 1940 (Saka)

THE BANNING OF UNREGULATED DEPOSIT SCHEMES ORDINANCE, 2019

(No. 7 of 2019)

Promulgated by the President in the Seventieth year of the Republic of India.

An Ordinance to provide for a comprehensive mechanism to ban the unregulated deposit schemes and to

protect the interest of depositors and for matters connected therewith or incidental thereto.

WHEREAS the Banning of Unregulated Deposit Schemes Bill, 2019 was passed on the 13th day

of February, 2019 in the House of the People ;

AND WHEREAS the said Bill could not be taken up for consideration and passing in the Council of

States ;

AND WHEREAS Parliament is not in session and the President is satisfied that circumstances exist

which render it necessary for him to take immediate action ;

NOW, THEREFORE, in exercise of the powers conferred by clause (1) of article 123 of the

Constitution, the President is pleased to promulgate the following Ordinance :—

CHAPTER I

PRELIMINARY

Short title, extent and commencement.—(1) This Ordinance may be called the Banning of

Unregulated Deposit Schemes Ordinance, 2019.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) It shall come into force at once.

Definitions.—In this Ordinance, unless the context otherwise requires,—

(1) “appropriate Government” means in respect of matters relating to,—

(i) the Union territory without legislature, the Central Government ;

(ii) the Union territory of Puducherry, the Government of that Union territory ;

(iii) the Union territory of Delhi, the Government of that Union territory ; and

(iv) the State, the State Government ;

(2) “company” shall have the same meaning as assigned to it in clause (20) of section 2 of

the Companies Act, 2013 (18 of 2013) ;

(3) “Competent Authority” means an Authority appointed by the appropriate Government under

section 7 ;

(4) “deposit” means an amount of money received by way of an advance or loan or in any

other form, by any deposit taker with a promise to return whether after a specified period or otherwise,

either in cash or in kind or in the form of a specified service, with or without any benefit in the form

of interest, bonus, profit or in any other form, but does not include—

(a) amounts received as loan from a scheduled bank or a co-operative bank or any other

banking company as defined in section 5 of the Banking Regulation Act, 1949 (10 of 1949) ;

(b) amounts received as loan or financial assistance from the Public Financial Institutions

notified by the Central Government in consultation with the Reserve Bank of India or any non-

banking financial company as defined in clause (f) of section 45-1 of the Reserve Bank of India

Act, 1934 (2 of 1934) and is registered with the Reserve Bank of India or any Regional Financial

Institutions or insurance companies ;

other source whose repayment is guaranteed by the appropriate Government, or any amount

received from a statutory authority constituted under an Act of Parliament or a State Legislature ;

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(d) amounts received from foreign Governments, foreign or international banks, multilateral

financial institutions, foreign Government owned development financial institutions, foreign export

credit collaborators, foreign bodies corporate, foreign citizens, foreign authorities or person

resident outside India subject to the provisions of the Foreign Exchange Management Act, 1999

(42 of 1999) and the rules and regulations made thereunder ;

(e) amounts received by way of contributions towards the capital by partners of any

partnership firm or a limited liability partnership ;

(f) amounts received by an individual by way of loan from his relatives or amounts received

by any firm by way of loan from the relatives of any of its partners ;

(g) amounts received as credit by a buyer from a seller on the sale of any property (whether

movable or immovable) ;

(h) amounts received by an asset re-construction company which is registered with the

Reserve Bank of India under section 3 of the Securitisation and Reconstruction of Financial

Assets and Enforcement of Security Interest Act, 2002 (54 of 2002) ;

(i) any deposit made under section 34 or an amount accepted by a political party under

section 29B of the Representation of People Act, 1951 (43 of 1951) ;

(j) any periodic payment made by the members of the self-help groups operating within

such ceilings as may be prescribed by the State Government or Union territory Government ;

(k) any other amount collected for such purpose and within such ceilings as may be

prescribed by the State Government ;

(l) an amount received in the course of, or for the purpose of, business and bearing a

genuine connection to such business including—

(i) payment, advance or part payment for the supply or hire of goods or provision of

services and is repayable in the event the goods or services are not in fact sold, hired or

otherwise provided ;

(ii) advance received in connection with consideration of an immovable property under

an agreement or arrangement subject to the condition that such advance is adjusted

against such immovable property as specified in terms of the agreement or arrangement ;

(iii) security or dealership deposited for the performance of the contract for supply of

goods or provision of services ; or

(iv) an advance under the long-term projects for supply of capital goods except those

specified in item (ii) :

Provided that if the amounts received under items (i) to (iv) become refundable, such

amounts shall be deemed to be deposits on the expiry of fifteen days from the date on

which they become due for refund :

Provided further that where the said amounts become refundable, due to the deposit

taker not obtaining necessary permission or approval under the law for the time being in

force, wherever required, to deal in the goods or properties or services for which money

is taken, such amounts shall be deemed to be deposits.

Explanation.— For the purposes of this clause,—

(i) in respect of a company, the expression “deposit” shall have the same

meaning as assigned to it under the Companies Act, 2013 (18 of 2013) ;

(ii) in respect of a non-banking financial company registered under the Reserve

Bank of India Act, 1934 (2 of 1934), the expression “deposit” shall have the same

meaning as assigned to it in clause (bb) of the section 45-1 of the said Act ;

(iii) the expressions “partner” and “firm” shall have the same meanings as

respectively assigned to them under the Indian Partnership Act, 1932 (9 of 2009) ;

(iv) the expression “partner” in respect of a limited liability partnership shall have

the same meaning as assigned to it in clause (q) of section 2 of the Limited Liability

Partnership Act, 2008 (6 of 2009) ;

(v) the expression “relative” shall have the same meaning as assigned to it in

the Companies Act, 2013 (18 of 2013) ;

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(5) “depositor” means any person who makes a deposit under this Ordinance ;

(6) “deposit taker” means—

(i) any individual or group of individuals ;

(ii) a proprietorship concern ;

(iii) a partnership firm (whether registered or not) ;

(iv) a limited liability partnership registered under the Limited Liability Partnership

Act, 2008 (6 of 2009) ;

(v) a company ;

(vi) an association of persons ;

(vii) a trust (being a private trust governed under the provisions of the Indian Trusts

Act, 1882 (2 of 1882) or a public trust, whether registered or not) ;

(viii) a co-operative society or a multi-State co-operative society ; or

(ix) any other arrangement of whatsoever nature,

receiving or soliciting deposits, but does not include—

(i) a Corporation incorporated under an Act of Parliament or a State Legislature ;

(ii) a banking company, a corresponding new bank, the State Bank of India, a subsidiary

bank, a regional rural bank, a co-operative bank or a multi-State co-operative bank as defined

in the Banking Regulation Act, 1949 (10 of 1949) ;

(7) “Designated Court” means a Designated Court constituted by the appropriate Government

under section 8 ;

(8) “insurer” shall have the same meaning as assigned to it in clause (9) of section 2 of the

Insurance Act, 1938 (4 of 1938) ;

(9) “notification” means a notification published in the Official Gazette and the expression “notify”

shall be construed accordingly ;

(10) “person” includes—

(i) an individual ;

(ii) a Hindu Undivided Family ;

(iii) a company ;

(iv) a trust ;

(v) a partnership firm ;

(vi) a limited liability partnership ;

(vii) an association of persons ;

(viii) a co-operative society registered under any law for the time being in force relating to

co-operative societies ; or

(ix) every artificial juridical person, not falling within any of the preceding sub-clauses ;

(11) “prescribed” means prescribed by the rules made by the Central Government or, as the

case may be, the State Government under this Ordinance ;

(12) “property” means any property or assets of every description, whether corporeal or

incorporeal, movable or immovable, tangible or intangible, and includes deeds and instruments

evidencing title to, or interest in, such property or assets, wherever located ;

(13) “public financial institution” shall have the same meaning as assigned to it in clause (72)

of section 2 of the Companies Act, 2013 (18 of 2013) ;

(14) “Regulated Deposit Scheme” means the Schemes specified under column (3) of the First

Schedule ;

(15) “Regulator” means the Regulator specified in column (2) of the First Schedule ;

(16) “Schedule” means the Schedules appended to this Ordinance ;

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(17) “Unregulated Deposit Scheme” means a Scheme or an arrangement under which deposits

are accepted or solicited by any deposit taker by way of business and which is not a Regulated

Deposit Scheme, as specified under column (3) of the First Schedule.

CHAPTER II

BANNING OF UNREGULATED DEPOSIT SCHEMES

Banning of Unregulated Deposit Schemes.—On and from the date of commencement of this

Ordinance,—

(a) the Unregulated Deposit Schemes shall be banned ; and

(b) no deposit taker shall, directly or indirectly, promote, operate, issue any advertisement

soliciting participation or enrolment in or accept deposits in pursuance of an Unregulated Deposit

Scheme.

Fraudulent default in Regulated Deposit Schemes.—No deposit taker, while accepting deposits

pursuant to a Regulated Deposit Scheme, shall commit any fraudulent default in the repayment or return

of deposit on maturity or in rendering any specified service promised against such deposit.

Wrongful inducement in relation to Unregulated Deposit Schemes.—No person by whatever

name called shall knowingly make any statement, promise or forecast which is false, deceptive or

misleading in material facts or deliberately conceal any material facts, to induce another person to invest

in, or become a member or participant of any Unregulated Deposit Scheme.

Certain scheme to be Unregulated Deposit Scheme.—A prize chit or a money circulation

scheme banned under the provisions of the Prize Chits and Money Circulation Scheme (Banning) Act,

1978 (43 of 1978) shall be deemed to be an Unregulated Deposit Scheme under this Ordinance.

CHAPTER III

AUTHORITIES

Competent Authority.—(1) The appropriate Government shall, by notification, appoint one or more

officers not below the rank of Secretary to that Government, as the Competent Authority for the purposes

of this Ordinance.

(2) The appropriate Government may, by notification, appoint such other officer or officers as it

thinks fit, to assist the Competent Authority in discharging its functions under this Ordinance.

(3) Where the Competent Authority or officers appointed under sub-section (2), for the purposes of

this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of

such information and particulars as may be prescribed that any deposit taker is soliciting deposits in

contravention of section 3, he may, by order in writing, provisionally attach the deposits held by the deposit

taker and the money or other property acquired either in the name of the deposit taker or in the name of

any other person on behalf of the deposit taker from the date of the order, in such manner as may be

prescribed.

(4) The Competent Authority shall, for the purposes of sub-section (3), have the same powers as

vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while conducting investigation

or inquiry in respect of the following matters, namely :—

(a) discovery and inspection ;

(b) enforcing the attendance of any person, including any officer of a reporting entity and

examining him on oath ;

(d) receiving evidence on affidavits ;

(e) issuing commissions for examination of witnesses and documents ; and

(f) any other matter which may be prescribed.

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(5) The Competent Authority shall have power to summon any person whose attendance he

considers necessary whether to give evidence or to produce any records during the course of any

investigation or proceeding under this section.

(6) All the persons so summoned shall be bound to attend in person or through authorised agents,

as such officer may direct, and shall be bound to state the truth upon any subject respecting which they

are examined or make statements, and produce such documents as may be required.

(7) Every proceeding under sub-sections (4) and (5) shall be deemed to be a judicial proceeding

within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860).

(8) Subject to any rules made in this behalf by the Central Government, any officer referred to in

sub-section (2) may impound and retain in his custody for such period, as he thinks fit, any records

produced before him in any proceedings under this Ordinance :

Provided that the officers referred to in sub-section (2) shall not—

(a) impound any records without recording his reasons for so doing ; or

(b) retain in his custody any such records for a period exceeding three months, without obtaining

the previous approval of the Competent Authority.

Designated Court.—(1) The appropriate Government shall, with the concurrence of the Chief

Justice of the concerned High Court, by notification, constitute one or more Courts known as the

Designated Courts for such area or areas or such case or cases as may be specified in such notification,

which shall be presided over by a Judge not below the rank of a District and Sessions Judge or Additional

District and Sessions Judge.

(2) No Court other than the Designated Court shall have jurisdiction in respect of any matter to

which the provisions of this Ordinance apply.

(3) When trying an offence under this Ordinance, the Designated Court may also try an offence,

other than an offence under this Ordinance, with which the accused may, under the Code of Criminal

Procedure, 1973 (2 of 1974), be charged at the same trial.

CHAPTER IV

INFORMATION ON DEPOSIT TAKERS

Central database.—(1) The Central Government may designate an authority, whether existing

or to be constituted, which shall create, maintain and operate an online database for information on deposit

takers operating in India.

(2) The authority designated under sub-section (1) may require any Regulator or the Competent

Authority to share such information on deposit takers, as may be prescribed.

10.

Intimation of business by deposit taker.—(1) Every deposit taker which commences or carries

on its business as such on or after the commencement of this Ordinance shall intimate the authority

referred to in sub-section (1) of section 9 about its business in such form and manner and within such

time, as may be prescribed.

(2) The Competent Authority may, if it has reason to believe that the deposits are being solicited or

accepted pursuant to an Unregulated Deposit Scheme, direct any deposit taker to furnish such statements,

information or particulars, as it considers necessary, relating to or connected with the deposits received

by such deposit taker.

Explanation.— For the removal of doubts, it is hereby clarified that—

(a) the requirement of intimation under sub-section (1) is applicable to deposit takers accepting

or soliciting deposits as defined in clause (4) of section 2 ; and

(b) the requirement of intimation under sub-section (1) applies to a company, if the company

accepts the deposits under Chapter V of the Companies Act, 2013 (18 of 2013).

11.

Information to be shared.—(1) The Competent Authority shall share all information received

under section 29 with the Central Bureau of Investigation and with the authority which may be designated

by the Central Government under section 9.

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(2) The appropriate Government, any Regulator, income-tax authorities or any other investigation

agency, having any information or documents in respect of the offence investigated under this Ordinance

by the police or the Central Bureau of Investigation, shall share all such information or documents with

the police or the Central Bureau of Investigation.

(3) Where the principal officer of any banking company, a corresponding new bank, the State Bank

of India, a subsidiary bank, a regional rural bank, a co-operative bank or a multi-State co-operative bank

has reason to believe that any client is a deposit taker and is acting in contravention to the provisions of

this Ordinance, he shall forthwith inform the same to the Competent Authority.

CHAPTER V

RESTITUTION TO DEPOSITORS

12.

Priority of depositors’ claim.—Save as otherwise provided in the Securitisation and

Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002) or the

Insolvency and Bankruptcy Code, 2016 (31 of 2016), any amount due to depositors from a deposit taker

shall be paid in priority over all other debts and all revenues, taxes, cesses and other rates payable to

the appropriate Government or the local authority.

13.

Precedence of attachment.—(1) Save as otherwise provided in the Securitization and

Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002) or the

Insolvency and Bankruptcy Code, 2016 (31 of 2016), an order of provisional attachment passed by the

Competent Authority, shall have precedence and priority, to the extent of the claims of the depositors,

over any other attachment by any authority competent to attach property for repayment of any debts,

revenues, taxes, cesses and other rates payable to the appropriate Government or the local authority.

(2) Where an order of provisional attachment has been passed by the Competent Authority—

(a) such attachment shall continue until an order is passed under sub-section (3) or sub-section

(5) of section 15 by the Designated Court ;

(b) all the attached money or property of the deposit taker and the persons mentioned therein

shall vest in the Competent Authority and shall remain so vested till further order of the Designated

Court.

(3) The Competent Authority shall open an account in a scheduled bank for the purpose of crediting

and dealing with the money realised under this Ordinance, which shall not be utilised except under the

instructions of the Designated Court.

(4) The Competent Authority shall not dispose of or alienate the property or money attached except

in accordance with the order of the Designated Court under sub-section (3) or sub-section (5) of

section 15.

(5) Notwithstanding anything contained in sub-section (4), the Competent Authority may, if it thinks

it expedient, order the immediate sale of perishable items or assets, and the proceeds of the sale shall

be utilised in the same manner as provided for other property.

14.

Application for confirmation of attachment and sale of property.—(1) The Competent Authority

shall, within a period of thirty days, which may extend up to sixty days, for reasons to be recorded in

writing, from the date of the order of provisional attachment, file an application with such particulars as

may be prescribed, before the Designated Court for making the provisional attachment absolute, and for

permission to sell the property so attached by public auction or, if necessary, by private sale.

(2) In case where the money or property has been attached on the permission granted by a

Designated Court in another State or Union territory, the application for confirmation of such attachment

shall be filed in that Court.

15.

Confirmation of attachment by Designated Court.—(1) Upon receipt of an application under

section 14, the Designated Court shall issue notice to—

(a) the deposit taker ; and

(b) any person whose property is attached under section 14,

to show cause, within a period of thirty days from the date of issue of notice, as to why the order of

attachment should not be made absolute and the properties so attached be sold.

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(2) The Designated Court shall also issue notice to all other persons represented to it as having or

being likely to claim any interest or title in the property, to appear on the same date as persons referred

to in sub-section (1) to raise objections, if they so desire, to the attachment of the property.

(3) The Designated Court shall, after adopting such procedure as may be prescribed, pass an

order—

(a) making the provisional order of attachment absolute ; or

(b) varying it by releasing a portion of the property from attachment ; or

and in case of an order under clause (a) or clause (b), direct the Competent Authority to sell the property

so attached by public auction or, if necessary, by private sale and realise the sale proceeds.

(4) The Designated Court shall not, in varying or cancelling the provisional order of attachment,

release any property from attachment, unless it is satisfied that—

(a) the deposit taker or the person referred to in sub- section (1) has interest in such property ;

and

(b) there shall remain an amount or property sufficient for repayment to the depositors of such

deposit taker.

(5) The Designated Court shall pass such order or issue such direction as may be necessary for

the equitable distribution among the depositors of the money attached or realised out of the sale.

(6) The Designated Court shall endeavor to complete the proceedings under this section within a

period of one hundred and eighty days from the date of receipt of the application referred to in

sub-section (1).

16.

Attachment of property of malafide transferees.—(1) Where the Designated Court is satisfied

that there is a reasonable cause for believing that the deposit taker has transferred any property otherwise

than in good faith and not for commensurate consideration, it may, by notice, require any transferee of

such property, whether or not he received the property directly from the said deposit taker, 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 the

Designated Court is satisfied that the transfer of the property to the said transferee was not a bonafide

transfer and not for commensurate consideration, it shall order the attachment of so much of the said

transferee’s property as in its opinion is equivalent to the proper value of the property transferred.

17.

Payment in lieu of attachment.—(1) Any deposit taker or a person referred to in sub-section

(1) of section 15, or transferee referred to in section 16 whose property is about to be attached or has

been provisionally attached under this Ordinance, may, at any time before the confirmation of attachment,

apply to the Designated Court for permission to deposit the fair value of the property in lieu of attachment.

(2) While allowing the deposit taker or person or transferee referred to in sub-section (1) to make

the deposit under sub-section (1), the Designated Court may order such deposit taker or person or

transferee to pay any sum towards costs as may be applicable.

18.

Powers of Designated Court.—(1) The Designated Court shall exercise the following powers,

namely :—

(a) power to approve the statement of dues of the deposit taker due from various debtors ;

(b) power to assess the value of the assets of the deposit taker and finalise the list of the

depositors and their respective dues ;

in the control of the deposit taker and to sell, transfer or realise the attached assets, either by public

auction or by private sale as it -deems fit depending upon the nature of assets and credit the sale

proceeds thereof to its bank account ;

(d) power to approve the necessary expenditure to be incurred by the Competent Authority

for taking possession and realisation of the assets of the deposit taker ;

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(e) power to pass an order for full payment to the depositors by the Competent Authority or

an order for proportionate payment to the depositors in the event the money so realised is not

sufficient to meet the entire deposit liability ;

(f) power to direct any person, who has made profit or averted loss by indulging in any

transaction or activity in contravention of the provisions of this Ordinance, to disgorge an amount

equivalent to the wrongful gain made or loss averted by such contravention ; and

(g) power to pass any other order which the Designated Court deems fit for realisation of

assets of the deposit taker and for repayment of the same to the depositors of such deposit taker

or on any other matter or issue incidental thereto.

(2) On the application of any person interested in any property attached and vested in the Competent

Authority under this Ordinance and after giving such Competent Authority an opportunity of being heard,

make such order as the Designated Court considers just and reasonable for—

(a) providing from such of the property attached and vested in the Competent Authority as the

applicant claims an 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 defence of the applicant where

criminal proceedings have been initiated against him in the Designated Court under this Ordinance ;

(b) safeguarding, so far as may be practicable, the interest of any business affected by the

attachment.

Explanation.—For the purposes of this section, the expression “deposit taker” includes the directors,

promoters, managers or members of said establishment or any other person whose property or assets

have been attached under this Ordinance.

19.

Appeal to High Court.—Any person including the Competent Authority, if aggrieved by any

final order of the Designated Court under this Chapter, may appeal to the High Court, within a period of

sixty days from the date of such order :

Provided that the High Court may entertain the appeal after the expiry of the said period of sixty

days, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal in

time.

Explanation.— The expression “High Court” means the High Court of a State or Union territory where

the Designated Court is situated.

20.

Power of Supreme Court to transfer cases.—(1) Whenever it is made to appear to the Supreme

Court that there is a default in any deposit scheme or deposit schemes of the nature referred to in

section 30, the Supreme Court may, by an order, direct that any particular case be transferred from one

Designated Court to another Designated Court.

(2) The Supreme Court may act under this section only on an application filed by the Competent

Authority or any interested party, and every such application shall be supported by an affidavit.

(3) Where an application for the exercise of the powers conferred by this section is dismissed, the

Supreme Court may, if it is of opinion that the application was frivolous or vexatious, order the applicant

to pay by way of compensation to any person who has opposed the application such sum not exceeding

fifty thousand rupees as it may consider appropriate in the circumstances of the case.

CHAPTER VI

OFFENCES AND PUNISHMENTS

21.

Punishment for contravention of section 3.—(1) Any deposit taker who solicits deposits in

contravention of section 3 shall be punishable with imprisonment for a term which shall not be less than

one year but which may extend to five years and with fine which shall not be less than two lakh rupees

but which may extend to ten lakh rupees.

(2) Any deposit taker who accepts deposits in contravention of section 3 shall be punishable with

imprisonment for a term which shall not be less than two years but which may extend to seven years

and with fine which shall not be less than three lakh rupees but which may extend to ten lakh rupees.

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(3) Any deposit taker who accepts deposits in contravention of section 3 and fraudulently defaults

in repayment of such deposits or in rendering any specified service, shall be punishable with imprisonment

for a term which shall not be less than three years but which may extend to ten years and with fine

which shall not be less than five lakh rupees but which may extend to twice the amount of aggregate

funds collected from the subscribers, members or participants in the Unregulated Deposit Scheme.

Explanation.— For the purposes of this Ordinance,—

(i) the expression “fraudulently” shall have the same meaning as assigned to it in section 25 of

the Indian Penal Code (45 of 1860) ;

(ii) where the terms of the Deposit Scheme are entirely impracticable or unviable, the terms

shall be relevant facts showing an intention to defraud.

22.

Punishment for contravention of section 4.—Any deposit taker who contravenes the provisions

of section 4 shall be punishable with imprisonment for a term which may extend to seven years, or with

fine which shall not be less than five lakh rupees but which may extend to twenty-five crore rupees or

three times the amount of profits made out of the fraudulent default referred to in said section, whichever

is higher, or with both.

23.

Punishment for contravention of section 5.—Any person who contravenes the provisions of

section 5 shall be punishable with imprisonment for a term which shall not be less than one year but

which may extend to five years and with fine which may extend to ten lakh rupees.

24.

Punishment for repeat offenders—Whoever having been previously convicted of an offence

punishable under this Chapter, except the offence under section 26, is subsequently convicted of an

offence shall be punishable with imprisonment for a term which shall not be less than five years but

which may extend to ten years and with fine which shall not be less than ten lakh rupees but which may

extend to fifty crore rupees.

25.

Offences by deposit takers other than individuals.—(1) Where an offence under this Ordinance

has been committed by a deposit taker other than an individual, every person who, at the time the offence

was committed, was in charge of, and was responsible to, the deposit taker for the conduct of its business,

as well as the deposit taker, shall be deemed to be guilty of the offence and shall be liable to be proceeded

against and punished accordingly.

(2) Nothing contained in sub-section (1) shall render any such person liable to any punishment

provided in this Ordinance, if he proves that the offence was committed without his’knowledge or that he

exercised all due diligence to prevent the commission of such offence.

(3) Notwithstanding anything contained in sub-section (1), where an offence under this Ordinance

has been committed by a deposit taker other than an individual, and it is proved that the offence—

(a) has been committed with the consent or connivance ; or

(b) is attributable to any neglect on the part of any director, manager, secretary, promoter,

partner, employee or other officer of the deposit taker,

such person shall also be deemed to be guilty of that offence and shall be liable to be proceeded against

and punished accordingly.

26.

Punishment for contravention of section 10.—Whoever fails to give the intimation required under

sub-section (1) of section 10 or fails to furnish any such statements, information or particulars as required

under sub-section (2) of that section, shall be punishable with fine which may extend to five lakh rupees.

27.

Cognizance of offences.—Notwithstanding anything contained in section 4, no Designated Court

shall take cognizance of an offence punishable under that section except upon a complaint made by the

Regulator :

Provided that the provisions of section 4 and this section shall not apply in relation to a deposit

taker which is a company.

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CHAPTER VII

INVESTIGATION, SEARCH AND SEIZURE

28.

Offences to be cognizable and non-bailable.—Notwithstanding anything contained in the Code

of Criminal Procedure, 1973 (2 of 1974) every offence punishable under this Ordinance, except the offence

under section 22 and section 26, shall be cognizable and non-bailable.

29.

Competent Authority to be informed of offences.—The police officer shall, on recording

information about the commission of an offence under this Ordinance, inform the same to the Competent

Authority.

30.

Investigation of offences by Central Bureau of Investigation.—(1) On receipt of information under

section 29 or otherwise, if the Competent Authority has reason to believe that the offence relates to a

deposit scheme or deposit schemes in which—

(a) the depositors, deposit takers or properties involved are located in more than one State or

Union territory in India or outside India ; and

(b) the total value of the amount involved is of such magnitude as to significantly affect the

public interest,

the Competent Authority shall refer the matter to the Central Government for investigation by the Central

Bureau of Investigation.

(2) The reference made by the Competent Authority under sub-section (1) shall be deemed to be

with the consent of the State Government under section 6 of the Delhi Special Police Establishment

Act, 1946 (25 of 1946).

(3) On the receipt of the reference under sub-section (1), the Central Government may transfer

the investigation of the offence to the Central Bureau of Investigation under section 5 of the Delhi Special

Police Establishment Act, 1946 (25 of 1946).

31.

Power to enter search and seize without warrant.—(1) Whenever any police officer, not below

the rank of an officer-in-charge of a police station, has reason to believe that anything necessary for the

purpose of an investigation into any offence under this Ordinance may be found in any place within the

limits of the police station of which he is in-charge, or to which he is attached, such officer may, with the

written authorisation of an officer not below the rank of Superintendent of Police, and after recording in

writing so far as possible, the thing for which the search is to be made and subject to the rules made in

this behalf, authorise any officer sub-ordinate to him,—

(a) to enter and search any building, conveyance or place, between sunrise and sunset, which

he has reason to suspect is being used for purposes connected with the promotion or conduct of

any deposit taking scheme or arrangement in contravention of the provisions of this Ordinance ;

(b) in case of resistance, to break open any door and remove any obstacle to such entry, if

necessary by force, with such assistance as he considers necessary, for exercising the powers

conferred by clause (a) ;

conveyance or place, which are intended to be used, or reasonably suspected to have been used,

in connection with any such deposit-taking scheme or arrangement in contravention of the provisions

of this Ordinance ; and

(d) to detain and search, and if he thinks proper, take into custody and produce before any

Designated Court any such person whom he has reason to believe to have committed any offence

punishable under this Ordinance :

Provided that if such officer has reason to believe that the said written authorisation cannot be

obtained without affording opportunity for the concealment of evidence or facility for the escape of

an offender, he may, without the said written authorisation, enter and search such building,

conveyance or place, at any time between sunset and sunrise after recording the grounds in writing.

(2) Where it is not practicable to seize the record or property, the officer authorised under

sub-section (1), may make an order in writing to freeze such property, account, deposits or valuable

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securities maintained by any deposit taker about which a complaint has been made or credible information

has been received or a reasonable suspicion exists of their having been connected with the promotion

or conduct of any deposit taking scheme or arrangement in contravention of the provisions of this

Ordinance and it shall be binding on the concerned bank or financial or market establishment to comply

with the said order :

Provided that no bank or financial or market establishment shall freeze such account, deposit or

valuable securities, for a period beyond thirty days unless the same is authorised by the order of the

Designated Court :

Provided further that, if at any time, it becomes practicable to seize the frozen property, the officer

authorised under sub-section (1) may seize such property.

Explanation.—For the purpose of this section, the expressions,—

(i) “freezing of account” shall mean that no transaction, whether deposit or withdrawal shall be

allowed in the said account ; and

(ii) “freezing of property” shall mean that no transfer, conversion, disposition or movement of

property shall be allowed.

(3) Where an officer takes down any information in writing or records grounds for his belief or makes

an order in writing under sub-section (1) or sub-section (2), he shall, within a time of seventy-two hours

send a copy thereof to the Designated Court in a sealed envelope and the owner or occupier of the

building, conveyance or place shall, on application, be furnished, free of cost, with a copy of the same

by the Designated Court.

(4) All searches, seizures and arrests under this section shall be made in accordance with the

provisions of the Code of Criminal Procedure, 1973 (2 of 1974).

32.

Application of Code of Criminal Procedure, 1973 to proceedings before Designated Court.—

(1) The Designated Court may take cognizance of offences under this Ordinance without the accused

being committed to it for trial.

(2) Save as otherwise provided in section 31, the provisions of the Code of Criminal Procedure, 1973

(2 of 1974) shall apply—

(a) to all arrests, searches and seizures made under this Ordinance ;

(b) to the proceedings under this Ordinance and for the purposes of the said provisions, the

Designated Court shall be deemed to be a Court of Session and the persons conducting the

prosecution before the Designated Court, shall be deemed to be Public Prosecutors.

CHAPTER VIII

MISCELLANEOUS

33.

Publication of advertisement of Unregulated Deposit Scheme.—Where any newspaper or other

publication of any nature, contains any statement, information or advertisement promoting, soliciting

deposits for, or inducing any person to become a member of any Unregulated Deposit Scheme, the

appropriate Government may direct such newspaper or publication to publish a full and fair retraction,

free of cost, in the same manner and in the same position in such newspaper or publication as may be

prescribed.

34.

Ordinance to have overriding effect.—Save as otherwise expressly provided in this Ordinance,

the provisions of this Ordinance shall have effect notwithstanding anything contained in any other law

for the time being in force, including any law made by any State or Union territory.

35.

Application of other laws not barred.—The provisions of this Ordinance shall be in addition to,

and not in derogation of, the provisions of any other law for the time being in force.

36.

Protection of action taken in good faith.—No suit, prosecution or other legal proceedings shall

lie against the appropriate Government or the Competent Authority or any officer of the appropriate

Government for anything-which is in good faith done or intended to be done under this Ordinance or the

rules made thereunder.

¦ÉÉMÉ ºÉ½þÉ--5

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37.

Power of Central Government to make rules.—(1) The Central Government may, by notification,

make rules for carrying out the provisions of this Ordinance.

(2) In particular and without prejudice to the generality of the foregoing power, such rules may provide

for all or any of the following matters, namely :—

(a) the information and other particulars to be taken into consideration before issuing an order,

and the manner of attachment, under sub-section (3) of section 7 ;

(b) information to be shared under sub-section (2) of section 9 ;

sub-section (1) of section 10 ;

(d) the particulars contained in the application to be filed by the Competent Authority before

the Designated Court under sub-section (1) of section 14 ;

(e) the procedure to be adopted by the Designated Court before issuing an order under

sub-section (3) of section 15 ;

(f) rules under sub-section (1) of section 31 ;

(g) the manner of publication of advertisement under section 33 ; and

(h) any other matter which is required to be, or may be, prescribed.

38.

Power of State Government, etc. to make rules.—(1) The State Government or Union territory

Government, as the case may be, in consultation with the Central Government, by notification, make

rules for carrying out the provisions of this Ordinance.

(2) In particular and without prejudice to the generality of the foregoing power, such rules may provide

for all or any of the following matters, namely :—

(a) ceiling for self-help groups under clause (j) of sub-section (4) of section 2 ;

(b) purpose and ceiling under clause (k) of sub-section (4) of section 2 ;

sub-section (3) of section 7 ;

(d) other matters under clause (f) of sub-section (4) of section 7 ;

(e) the rules relating to impounding and custody of records under sub-section (8) of

section 7 ;

(f) any other matter which is required to be, or may be, prescribed.

39.

Laying of rules.—(1) Every rule made by the Central Government under this Ordinance shall

be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for

a total period of thirty days which may be comprised in one session, or in two or more successive

sessions, and if, before the expiry of the session immediately following the session or the successive

sessions aforesaid, both Houses agree in making any modification in the rule, or both Houses agree

that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of

no effect, as the case may be ; so, however, that any such modification or annulment shall be without

prejudice to the validity of anything previously done under that rule.

(2) Every rule made by a State Government or the Union territory Government, as the case may

be shall be laid, as soon as may be after it is made, before each House of the State Legislature or the

Union territory Legislature, as the case may be, where it consists of two Houses, or where such Legislature

consists of one House, before that House.

40.

Power to remove difficulties.—(1) If any difficulty arises in giving effect to the provisions of

this Ordinance, the Central Government may, by order published in the Official Gazette, make such

provisions, not inconsistent with the provisions of this Ordinance, as may appear to be necessary for

removing the difficulty :

Provided that no such order shall be made under this section after the expiry of three years from

the commencement of this Ordinance.

(2) Every order made under this section shall be laid, as soon as may be after it is made, before

each House of Parliament.

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41.

Power to amend First Schedule.—(1) The Central Government may, having regard to the objects

of this Ordinance, and if it considers necessary or expedient so to do, by notification, add to, or as the

case may be, omit from the First Schedule, any scheme or arrangement, and on such addition, or

omission, such scheme or arrangement shall become, or cease to be, a Regulated Deposit Scheme, as

the case may be.

(2) A copy of every notification issued under this section shall, as soon as may be after it has been

issued, be laid before each House of Parliament.

42.

Amendment to certain enactments.—The enactments specified in the Second Schedule shall

be amended in the manner specified therein.

¦ÉÉMÉ ºÉ½þÉ--5+

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FIRST SCHEDULE

[(See section 2 (15)]

REGULATED DEPOSIT SCHEMES

(1) The Regulator and Regulated Deposit Scheme refers to the regulators and schemes and

arrangements listed in the following Table, namely :—

TABLE

SI. No.

Regulator

Regulated Deposit Scheme

(1)

(2)

(3)

Securities and Exchange Board of

(i) Any scheme or an arrangement [as defined under

India.

section 11AA of the Securities and Exchange Board of

India Act, 1992 (15 of 1992)] launched, sponsored or

carried out by a Collective Investment Management

Company registered with the Securities and Exchange

Board of India under the Securities and Exchange Board

of India (Collective Investment Scheme) Regulations,

1999.

(ii) Any scheme or an arrangement registered with the

Securities and Exchange Board of India under the

Securities and Exchange Board of India (Alternative

Investment Funds) Regulations, 2012.

(iii) Any scheme or an arrangement, pursuant to which

funds are managed by a portfolio manager, registered

under the Securities and Exchange Board of India

(Portfolio Managers) Regulations, 1993.

(iv) Any scheme or an arrangement regulated under the

Securities and Exchange Board of India (Share Based

Employee Benefits) Regulations, 2014 or providing for

employee benefits as permitted under the Companies

Act, 2013 (18 of 2013).

(v) Any other scheme or an arrangement registered under

the Securities and Exchange Board of India Act, 1992 (15

of 1992), or the regulations made thereunder.

(vi) Any amount received as contributions in the nature

of subscriptions to a mutual fund registered with Securities

and Exchange Board of India under the Securities and

Exchange Board of India (Mutual Funds) Regulations, 1996.

Reserve Bank of India

(i) Any scheme under which deposits are accepted by

Non-Banking Financial Companies as defined in clause

(f) of section 45-I of the Reserve Bank of India Act, 1934

(2 of 1934) and registered with the Reserve Bank of

India ; or any other scheme or an arrangement registered

under the Reserve Bank of India Act, 1934.

(ii) Any scheme or an arrangement under which funds are

accepted by individuals or entities engaged as Business

Correspondents and Facilitators by banks subject to the

Guidelines and Circulars issued by the Reserve Bank of

India from time to time.

(iii) Any scheme or an arrangement under which funds are

received by a system provider operating as an authorised

payment system under the Payment and Settlement

Systems Act, 2007(51 of 2007).

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(iv) Any other scheme or an arrangement regulated under

the Reserve Bank of India Act, 1934 (2 of 1934), or the

guidelines or circulars of the Reserve Bank of India.

The Insurance Regulatory and

A contract of insurance pursuant to a certificate of

Development Authority of India

registration obtained in accordance with the Insurance

Act, 1938 (4 of 1938).

State Government or Union territory

(i) Any scheme or an arrangement made or offered by a

Government

co-operative society registered under the Co-operative

Societies Act, 1912 (2 of 1912) or a society being a

society registered or deemed to be registered under any

law relating to co-operative societies for the time being in

force in any State or Union territory.

(ii) Any scheme or an arrangement commenced or

conducted as a chit business with the previous sanction

of the State Government in accordance with the

provisions of the Chit Funds Act, 1982 (40 of 1982).

(iii) Any scheme or an arrangement regulated by any

enactment relating to money lending which is for the time

being in force in any State or Union territory.

(iv) Any scheme or an arrangement by a prize chit or

money circulation scheme under section 11 of the Prize

Chits and Money Circulation Schemes (Banning) Act,

1978 (43 of 1978).

National Housing Bank

Any scheme or an arrangement for acceptance of deposits

registered under the National Housing Bank Act, 1987 (53

of 1987).

Pension Fund Regulatory and

Any scheme or an arrangement under the Pension Fund

Development Authority

Regulatory and Development Authority Act, 2013 (23 of

2013).

Employees Provident Fund

Any scheme, Pension Scheme or Insurance Scheme

Organisation

framed under the Employees’ Provident Fund and

Miscellaneous Provisions Act, 1952 (19 of 1952).

Central Registrar, Multi-State

Any scheme or an arrangement for acceptance of deposits

Co-operative Societies

from voting members by a Multi-State Co-operative

Society registered under the Multi-State Co-operative

Societies Act, 2002 (39 of 2002).

Ministry of Corporate Affairs,

(i) Deposits accepted or permitted under the provisions

Government of India

of Chapter V of the Companies Act, 2013 (18 of 2013).

(ii) Any scheme or an arrangement under which deposits

are accepted by a company declared as a Nidhi or a

Mutual Benefit Society under section 406 of the

Companies Act, 2013 (18 of 2013).

(2) The following shall also be treated as Regulated Deposit Schemes under this Ordinance,

namely :—

(a) deposits accepted under any scheme or an arrangement registered with any regulatory

body in India constituted or established under a statute ; and

(b) any other scheme as may be notified by the Central Government under this Ordinance.

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AMENDMENT TO CERTAIN ENACTMENTS

PART I

AMENDMENT TO THE RESERVE BANK OF INDIA ACT, 1934

Amendment of section 45-I of Act 2 of 1934.—In the Reserve Bank of India Act, 1934 (2 of 1934),

in section 45-I, in clause (bb), after Explanation II, the following Explanation shall be inserted, namely :—

“Explanation III.—The amounts accepted by a co-operative society from the members or

shareholders, by whatever name called, but excluding the amounts received as share capital, shall

be deemed to be deposits for the purposes of this clause, if such members or shareholders are

nominal or associate members, by whatever name called, who do not have full voting rights in the

meetings of such co-operative society.”.

PART II

AMENDMENTS TO THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

Amendment of section 11 of Act 15 of Act 15 of 1992.—In the Securities and Exchange Board of

India Act, 1992,—

(i) in section 11, in sub-section (4), for clause (e), the following clause shall be substituted,

namely :—

“(e) attach, for a period not exceeding ninety days, bank accounts or other property of

any intermediary or any person associated with the securities market in any manner involved

in violation of any of the provisions of this Act, or the rules or the regulations made thereunder :

Provided that the Board shall, within ninety days of the said attachment, obtain confirmation

of the said attachment from the Special Court, established under section 26A, having jurisdiction

and on such confirmation, such attachment shall continue during the pendency of the aforesaid

proceedings and on conclusion of the said proceedings, the provisions of section 28A shall

apply :

Provided further that only property, bank account or accounts or any transaction entered

therein, so far as it relates to the proceeds actually involved in violation of any of the provisions

of this Act, or the rules or the

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SECOND SCHEDULE

[(See section 42)]

AMENDMENT TO CERTAIN ENACTMENTS

PART I

AMENDMENT TO THE RESERVE BANK OF INDIA ACT, 1934

Amendment of section 45-I of Act 2 of 1934.—In the Reserve Bank of India Act, 1934 (2 of 1934),

in section 45-1, in clause (bb), after Explanation II, the following Explanation shall be inserted, namely :—

“Explanation III.—The amounts accepted by a co-operative society from the members or

shareholders, by whatever name called, but excluding the amounts received as share capital, shall

be deemed to be deposits for the purposes of this clause, if such members or shareholders are

nominal or associate members, by whatever name called, who do not have full voting rights in the

meetings of such co-operative society.”.

PART II

AMENDMENTS TO THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

Amendment of section 11 of Act 15 of 1992.—In the Securities and Exchange Board of India

Act, 1992,—

(i) in section 11, in sub-section (4), for clause (e), the following clause shall be substituted,

namely :—

“(e) attach, for a period not exceeding ninety days, bank accounts or other property of

any intermediary or any person associated with the securities market in any manner involved

in violation of any of the provisions of this Act, or the rules or the regulations made thereunder :

Provided that the Board shall, within ninety days of the said attachment, obtain confirmation

of the said attachment from the Special Court, established under section 26A, having jurisdiction

and on such confirmation, such attachment shall continue during the pendency of the aforesaid

proceedings and on conclusion of the said proceedings, the provisions of section 28A shall

apply :

Provided further that only property, bank account or accounts or any transaction entered

therein, so far as it relates to the proceeds actually involved in violation of any of the provisions

of this Act, or the rules or the regulations made thereunder shall be allowed to be attached.” ;

(ii) in section 28A, after Explanation 3, the following Explanation shall be inserted, namely :—

“Explanation 4.—The interest referred to in section 220 of the Income-tax Act, 1961

(43 of 1961) shall commence from the date the amount became payable by the person.”.

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PART III

AMENDMENT TO THE MULTI-STATE CO-OPERATIVE SOCIETIES ACT, 2002

Amendment of section 67 of Act 39 of 2002.—In the Multi-State Co-operative Societies Act, 2002,

in section 67, in sub-section (1),—

(a) after the words “receive deposits”, the words “from its voting members” shall be inserted ;

(b) the following Explanation shall be inserted, namely :—

“Explanation.—For the removal of doubts, it is hereby clarified that a multi-State

co-operative society shall not be entitled to receive deposits from persons other than voting

members.”.

RAM NATH KOVIND,

President.

DR. G. NARAYANA RAJU,

Secretary to the Government of India.

By order and in the name of the Governor of Maharashtra,

RAJENDRA G. BHAGWAT,

Secretary (Legislation) to Government,

Law and Judiciary Department.

ON BEHALF OF GOVERNMENT PRINTING, STATIONERY AND PUBLICATION, PRINTED AND PUBLISHED BY DIRECTOR

DR. NAMDEO KONDAJI BHOSALE, PRINTED AT GOVERNMENT CENTRAL PRESS, 21-A, NETAJI SUBHASH ROAD, CHARNI ROAD,

MUMBAI 400 004 AND PUBLISHED AT DIRECTORATE OF GOVERNMENT PRINTING, STATIONERY AND PUBLICATIONS,

21-A, NETAJI SUBHASH ROAD, CHARNI ROAD, MUMBAI 400 004 EDITOR : DIRECTOR DR. NAMDEO KONDAJI BHOSALE.