A three-member team of the Odisha Government headed for Tamil Nadu on Wednesday to study the implementation of the Tamil Nadu Protection of Interest of Depositors (in Financial Establishments) Act, 1997.
DIG, Economic Offences Wing, Rajesh Kumar, Joint Secretary to Law Department, P K Nanda, and Joint Secretary to Finance Department, S Kanungo, will not only study the rules of the TN Act, but also understand the functioning of the designated courts and different practices under the law.
The three-member team will also interact with the EOW of Tamil Nadu. The decision to send a team to Tamil Nadu was taken by the Finance department since the rules are yet to be formulated for the Odisha Protection of Interest of Depositors (in Financial Establishments) Act, which received Presidential assent on August 13 and has come into effect.
“The team will study the rules of the TN Act and submit a report basing on which the operative norms for the Odisha law will be set. The quicker it happens, the Government will be able to operationalise the Act sooner,” said an official.
Since the Act also necessitates that Odisha Government establish designated courts, the Home department has sought advice of the Law department in setting up four such courts in places where concentration of cases is high. The courts are likely to be distributed in different regions.
Once the Law department’s opinion is received, the Orissa High Court will be moved for establishment of the designated courts and the Home department will start the process for creation of the posts.
With the Act coming into effect, all search, seizure and confiscation come under its ambit.
As per Section 4 of the Act, either a District Magistrate or an Additional DM can be declared as competent authority for evaluation, liquidation and management of the proceeds.
A major challenge before the Government would be to set in motion the liquidation process since a huge number of small depositors are banking on the Act to get back their money, which was duped by the companies in the garb of high return-fetching money circulation schemes.
The EOW of Odisha has, so far, booked 22 chit fund companies in the last two years. As many as 355 cases have been registered during 2012 and 2013 by both EOW as well as District Police administration. Over 480 people have been arrested in connection with the chit fund scam which continues to create a stir.
A status report by the Institutional Finance wing of the Finance department had put the total number of depositors in various money circulation firms at 6.89 lakh. The combined investment by the depositors is estimated at a whopping Rs 4,375 crore.