HYDERABAD: Former MP Undavalli Arun Kumar said though the criminal case against Margadarsi Financiers (MF) founder chairman Ramoji Rao had abated following his death, his effort to seek clarification from the Reserve Bank of India (RBI) on the liability of Hindu Undivided Families (HUFs) for violation of Section 45 (S) would continue. He said he would meet members of the Parliamentary Finance Committee, which is empowered to summon the RBI governor, to seek clarity on the issue.
Speaking to the media here on Friday a day after the Supreme Court dismissed his Special Leave Petition challenging the Telangana High Court’s ruling setting aside criminal proceedings against MF for collecting public deposits in violation of RBI regulations, the former MP said: “Though I do not intend to attribute any motives to the judges, they questioned my locus standi and struck down the case. I had filed the SLP in the Supreme Court after the Telangana High Court verdict. The questions that remained when the case was earlier remanded to the Telangana High Court were whether all the depositors had been paid by Margadarsi Financiers, whether there was a violation of Section 45 (S) of the Reserve Bank of India Act and the consequences thereof, and whether there was any need to pursue a case that had been pending in the trial court for years or whether it was a futile exercise.”
The Telangana High Court had held that the issue relating to Section 45 (S) should be pursued. However, the Andhra Pradesh and Telangana governments contended that following the death of Ramoji Rao, there was no need to pursue the case.
The court, while agreeing that the criminal proceedings would abate following Ramoji Rao’s death, observed that the issue of recovering the dues from his successors would remain. “I therefore approached the Supreme Court seeking clarity on the applicability of Section 45(S),” he said.
“The current Supreme Court judgment has not addressed the issue and simply said that since Ramoji Rao is no more and the AP and Telangana governments were not pursuing the case, it was being closed. I had asked the Supreme Court to clarify the definition and scope of Section 45 (S). I also wrote to the two state governments, but they did not respond,” he said.
Clarifying that he had not pursued the case out of any personal vendetta, Undavalli said he had no financial interest in the matter and had never personally met Ramoji Rao.
“My only interest was that a bad precedent should not be set. If large organisations violate regulations, others may also do so in the future. The law should apply equally to everyone. My principal objection was that as an HUF, Margadarsi Financiers should not have solicited deposits,” he said.