Daijiworld Media Network - Mumbai
Mumbai, Jul 15: In a significant move to safeguard depositor interests, Chief Minister Devendra Fadnavis on Tuesday announced that the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 will be amended to increase punishment terms and fines for financial entities that default on their commitments or defraud investors.
Speaking during Question Hour in the State Assembly, Fadnavis said the government would also set up a dedicated system, involving financial experts and outsourced property valuation machinery, to support the police and prosecution in identifying, evaluating, and auctioning assets of fraudulent financial firms after an FIR is filed.
The announcement came in response to a question raised by MLA Amol Khatal regarding the alleged large-scale fraud committed by the Maitreya group against depositors across the state.
Former Finance Minister Sudhir Mungantiwar pressed the government to raise the maximum punishment under the Act from six years to 20 years and increase the fine from Rs 1 lakh to Rs 20 lakh. Citing the DSK Group case, he criticized the handling of such matters under NCLT, pointing out that properties valued at ?16,000 crore were sold for a mere Rs 827 crore in auctions—leaving depositors with little hope of recovery.
Fadnavis responded that the current six-year imprisonment term is bailable, and that increasing it beyond seven years would allow stricter legal action. “We will move to amend the Act accordingly,” he said, adding that the penalty amount would also be revised.
The Chief Minister acknowledged the limited success of the existing law, particularly in the areas of property identification, evaluation, and liquidation. To address this, a specialized support system will be instituted to streamline asset recovery and ensure timely justice for depositors.
The move comes amid growing public concern over fraudulent financial firms and delayed asset recovery processes, with the government now looking to plug legal and procedural loopholes through legislative reforms.