Topic
The Supreme Court ruled that loan transactions with an assured interest return, even if labeled as loans, fall under the definition of 'deposit' under the MPID Act if received by a financial establishment. This expands criminal liability for defaulting entities and strengthens investor protection under the Act.
The Punjab & Haryana High Court ruled that chit funds operating without state sanction under the Chit Funds Act, 1982, remain subject to attachment under the Haryana Protection of Depositors Act, 2013. The judgment underscores that regulatory compliance is a prerequisite for statutory exemptions, impacting unregistered financial establishments in Haryana.
The Bombay High Court, Nagpur Bench, ruled that investments offering fixed returns qualify as 'deposits' under the Maharashtra Protection of Interest of Depositors (MPID) Act, 1999. The court rejected the discharge application at the preliminary stage, reinforcing that such financial schemes fall within the ambit of the Act, impacting investors and promoters of similar ventures. This decision underscores the strict interpretation of the MPID Act in safeguarding depositors' interests.