What are the provisions of The TANPID ACT?

Question

General Provisions of the TANPID ACT

Answer 1

The boom in economy during 1991-96 led to an increase in money circulation in the market resulting in mushrooming of private finance firms. The NBFCs, which did not function as per the stipulations of RBI, lured investors especially those looking out to park their hard-earned money for higher returns by offering unbelievable rates of interest and several offers including free holiday packages.

Attracted by the higher rate of interest and free bonanzas several innocent investors, especially those who retired from service, chose to put their superannuation benefits in such fly-by-night finance companies. These firms closed shops and vanished. Based on petitions filed by defrauded investors, the High Court directed the State Government to set up a separate wing to probe these cases bringing Economic Offences Wing (EOW) into existence, the Superintendent of Police, K. Shankar, said during the two-day training programme organised for the EOW police officers in association with the Reserve Bank of India (RBI) and legal luminaries.

The programme was aimed at fine-tuning and sharpening the skills of police officers besides educating them on legal provisions and the Tamil Nadu Protection of Interests of Depositors Act, the Inspector-General of Police, Mehaboob Alam, said. The Principal District Sessions Judge, A. Rathnavelu told the officers that they should exercise the powers vested with them by the Act to render justice to depositors. The EOW officers should be affable, accessible and accountable to enforce the rule of law. The Additional Director-General of Police, EOW, P. Thangarajan, said the TANPID Act was aimed at protecting the interests of depositors by bringing the accused to book and to get the properties of the latter liquidated for settling claims.

Only in chit fund and other cases the police would have to wait for the conviction. But in cases coming under the purview of the TANPID Act, the law-enforcing agency should not merely follow the routine investigation process. The arrest and remand of the accused would neither serve the purpose of the act nor benefit the affected depositors. Hence there was a pertinent need to identify the properties of the firm that defrauded the depositors and properties of the promoters and directors. If these attached properties were found to be inadequate for settling the dues to the depositors, then the officers could go in for attaching the properties of those who borrowed money from these fraudulent financial institutions as well, he said. "Filing a case, arresting the accused is not the end of investigation process in economic offences", he told the officers. Highlighting the "objective performance" of the EOW, the officials pointed out that in 2000 354 cases involving Rs 1,289.91 crores were registered and the EOW was able to restore Rs. 276 crores to the depositors.