Amendment status not verified — confirm the current text below against the official source.
Report by the Competent Authority.- After making a report under section 7, the Competent Authority shall make an application to the Special Court seeking permission to make payment to the depositors from out of the money realized. While making such application, the Competent Authority shall assess the liability to the depositors and other liabilities and in case the money realized or realizable is not sufficient to meet the entire liability, seek permission of the Special Court for making payment to the depositors and disburse the money as per the orders of the Special Court. CHAPTER-III 1[9. Fraudulent default by Financial Establishment.- (1) Any Financial Establishment, which fraudulently defaults any repayment of deposit on maturity 2[or on demand or otherwise by the depositor or his successor along with or without benefit]2 in the form of interest, bonus, profit or in any other form as promised or fraudulently fails to render service as assured against the deposit, every person including the promoter, director, partner, manager, 3[former directors, partners, promoters who have demitted or resigned from establishment provided their liability is limited to the period of office]3 or any other person or an employee responsible for the management or conducting of the business or affairs of such Financial Establishment, shall on conviction, be punished with imprisonment for a term not less than three years and which may extend to seven years and with fine which may extend to ten lakh rupees and such Financial Establishment also shall be liable for a fine which may extend to an amount equivalent to five lakh rupees or where such deposits is quantifiable in terms of money twice the amount of aggregate funds collected from subscriber or member whichever is more. 18 Explanation.- For the purpose of this section a Financial Establishment, which commits default in repayment of such deposit with such benefits in form of interest, bonus, profit or in any other form as promised or fails to render any specific service promised against such deposit, or fails to render any specific service agreed against the deposit with an intention of causing wrongful gain to one person or wrongful loss to another person or commits such defaults due to its inability arising out of impracticable or commercially not viable promises made while accepting such deposit or arising out of deployment of money or assets acquired out of the deposits in such manner as it involves inherent risk in recovering the same when needed shall, be deemed to have committed a default or failed to render the specific service, fraudulently. (2) Whoever having been previously convicted of an offence punishable under this Act, is subsequently convicted of an offence punishable under this Act, shall be punished with imprisonment for a term of not less than five years which may extend to seven years and a fine which shall not be less than ten lakh rupees and which may extend to fifty crore rupees. (3) (i) Where an offence under this Act has been committed by a financial establishment other than an individual, every person who, at the time the offence was committed, was in conduct of its business, as well as the financial establishment, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. (ii) Nothing contained in clause (i) above, shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence. (iii) Notwithstanding anything contained in clause (i) above, where an offence under this Act has been committed by a financial establishment other than an individual, and it is proved that the offence,- (a) has been committed with the consent or connivance: or (b) is attributable to any negligence on the part of any 3[such current or former]3 Director, Manager, Secretary, Promoter, Partner, Employee or other Officer of the financial establishment; such persons shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.]1