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Chit Funds
The High Court of Jharkhand has granted time to the state government to challenge its order in the Supreme Court in connection with a case related to the return of money to investors by chit fund companies. A PIL was filed by the Non Banking Abhikarta Ewam Niweshak Suraksha Samiti through its president Javed Akhtar to seek a direction from the High Court to ensure the return of funds. A bench of Chief Justice Sanjaya Kumar Mishra and Justice Ananda Sen on September 11 had ordered the government to ensure that a high-level committee headed by a former chief justice of the high court and two other members be appointed and look into the procedure for the return of funds to the investors. The state counsel informed the high court on Wednesday that it intends to challenge the order of the bench on the formation of a committee and return of funds in 45 days. The bench of Chief Justice Sanjaya Kumar Mishra and Justice Ananda Sen while accepting the plea of the government adjourned the mat
The Jharkhand High Court has set a deadline of 45 days for the state government to form a high-level committee to ensure the return of funds invested by people in various chit-fund companies. A division bench of Chief Justice Sanjaya Kumar Mishra and Justice Ananda Sen while hearing a petition filed by the Non-Banking Abhiraksha Suraksha Samiti ordered the government to issue a notification informing formation of a high-level committee within the deadline set by it. The bench also specified that the high-level committee will be headed by a former chief justice of the high court. Other members of the committee will be the secretary of the Board of Revenue and a DIG ranked officer of the CBI, the court said in its order on Monday. The Committee will work and start planning on how to ensure the return of money to investors who were duped by various chit-fund companies which are being investigated by the CBI. The court will hear the matter again on November 8. Earlier, the court had
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The Margadarsi Chit Funds Pvt Ltd (MCFPL) has never violated any provisions of the AP Chit Fund Act & Rules, the company said on Monday amid a CID probe into the alleged violations of the law by it. In a statement, the company alleged that the Andhra Pradesh government was using its machinery to make baseless allegations, scare monger among chit subscribers and abuse power in its six-month long persecution on Margadarsi. Inspite of it, not even one subscriber has raised any query or doubt, all this while MCFPL has moved the High Courts of Telangana state and AP, said the statement, adding AP government is disregarding even judicial orders. According to Margadarsi, Eenadu, one of Ramoji Group's flagship companies and AP's largest circulated Telugu daily has always been at the forefront of upholding people's issues and public interest' for five decades which is not taken in the right way by some governments, especially the YSRC government.
Taking exception to the press note issued by the Andhra Pradesh Crime Investigation Department (CID) on alleged irregularities by Margadarsi Chit Fund Private Ltd, the All India Association of Chit Funds on Thursday claimed that there were no complaints against the firm. The body in a press release said the CID is comparing registered chit companies with Ponzi and multilevel marketing companies like Sahara, Sharadha, or Satyam Computers whose failure was on account of the misuse and misappropriation of public funds. The association also said what chit funds accept from their subscribers are not deposits at all and with the kind of assets they have, it is impossible for Margadarsi kind of the company to run away with public funds. Even assuming that there was/is any violation on the part of a financial intermediary, the solution lies in getting it corrected, as is the practice even with RBI, and not by any coercive steps, and publicity, as is being seen now. Creating a scare among th
In a relief to the chit fund industry in the country, the Supreme Court of India has said that the government cannot impose service tax on the chit fund buisiness, observing that it cannot be treated as fund management as it is understood at present. The industry has been challenging the government's order seeking them to pay the service tax on the business, said industry representatives.The Central Board of Excise and Customs (CBEC), Ministry of Finance has issued a circular in August, 2007, asking the chit funds to pay the service tax on the running of chit funds as according to the Revenue, as it was a service provided by these companies and convered under 'banking and other financial services'.The industry approached the High Court of Andhra Pradesh against this and an order was passed on July, 2008 and the High Court accepted the plea of the companies that the Chit Fund business does not amount to any service covered by the definition of 'banking and other financial services' as .