Canvassing agents of financial firms should not be prosecute

 The Madras High Court has held that clerks, accountants and office assistants working in financial institutions and canvassing agents should not be prosecuted for offence under Section 5 of the Tamil Nadu Protection of Interest of Depositors Act.

It pointed out that they do not shoulder the responsibility for management or mismanagement of affairs of the firm. Allowing a petition seeking to set aside an order of a Special Judge, Chennai, under the Tamil Nadu Protection of Interest of Depositors Act, dismissing a discharge petition, Justice M. Jeyapaul said the trial court had improperly dismissed the petitioner’s plea for discharge on the ground that there were allegations in witnesses statements that the petitioner had canvassed for deposits.

In her petition, Prasannadevi said that she was cited as an accused in a case against a financial institution, which had defaulted in repayment of deposits and interest even after maturity.

She had nothing to do with the partnership firm, which was facing trial along with other accused for an offence alleged to have been committed under the legislation. She was not a partner. She had been implicated for the reason that she was the wife of an accused N. Kanagasabai.

The government contended that the petitioner had actively participated in the business of the financial establishment.

She had canvassed and collected deposits. She had taken responsibility for the management of affairs of the establishment.

In his order, Mr. Justice Jeyapaul said even if the FIR did not disclose the exact role of the accused, they could be charge-sheeted if the witnesses examined by the prosecuting agency came out with serious allegations disclosing commission of offence. It appeared that the prosecution, on the assumption that the canvassing by the petitioner would amount to shouldering responsibility for the management of affairs of the firm, had laid a charge sheet against her. The fact remained that the petitioner was not a partner of the firm.

To invoke the penal provision under Section 5 of the Act, one should shoulder the responsibility of managing the affairs of the financial firm or company. The judge said sometimes all family members, who had nothing to do with the financial bungling of an institution, were roped in on the allegation that they canvassed for deposits.