Odisha amends certains provisions of Act to protect depositors

In a bid to facilitate refund of money to depositors allegedly duped by different ponzi firms, the state government today amended certain provisions of the Odisha Protection of Interests of Depositors (in Financial Establishments) Act, 2011.
The proposal in this regard was approved by the cabinet at a meeting presided over by Chief Minister Naveen Patnaik here.
"The amendment of Section 6 and 7 of the Act will provide more teeth to the legislation," Chief Secretary A P Padhi told reporters here.
"In order to make the legislation more stringent and to dispel confusion between Section 7, which provides for compounding of offences, and Section 6, which stipulates punishment for offences, Section 7 will be ommitted," Padhi said.

He said the amendment of Section 6 is to be made more stringent by enhancing the quantum of fine for persons running "fradulent financial establishments" from Rs 1 lakh to Rs 10 lakh and for financial establishments from Rs 2 lakh to Rs 1 crore.
The amendment also provides scope to give power to competent authority to sell property which is subject to speedy and natural decay quickly for maxium realisation amount to safeguard the interest of depositors.

"Items like luxury cars recovered from ponzi firm operators will be sold immediately to raise more money than keeping it for long till court order," Padhi said.

Besides, as the service of notice to offenders causes delay in court proceedings, the amendment will give power to the designated court to issue notice in newspapers for the purpose.
"For giving priority in payment to poor depositors who have deposited no more than Rs 10,000, the legislation will consider them as small depositrs," he said.
It is also proposed in the amendment to recover the amount paid from the Corpus Fund to depositors, from the sale proceeds of property attached, at the first instance before making equitable distribution.