VIJAYAWADA: The Andhra Pradesh High Court has directed the AP government not to conduct any inspection on the branches of Margadarsi Chit Funds except in strict compliance with provisions of Section 46 of the Chit Funds Company Act.
The court gave the direction while issuing an interim order here on Wednesday.
A single-judge bench of Justice Ninala Jayasurya directed the AP CID not to cause any hindrance, under the guise of inspections, to the business activities of MCFPL.
The court observed, “Section 46 of the Act, provides for inspection of chit books and chit records during the working hours on any working day. The earlier orders contain specific directions not to cause any interruption or disturbance to the day-to-day business activities of the company and its various branches and also not to close down the main entrance of the branches while conducting any search operations.”
The court observed, “It would appear from a perusal of the material on record that inspections by a team or by some authorised persons are sought to be conducted in respect of some branches and the presence of the police/officials of CID is apparent. No satisfactory answer is forthcoming from the respondents in that regard.”
“This court is of the prima facie opinion that conduct of inspections by some persons on mere authorisation is not tenable. Any such inspection contrary to provisions of the Act is not permissible and any such act without due respect to the earlier orders of the court cannot be countenanced.”
Special government pleader C Suman submitted that it was not a joint inspection by the authorities under the Chit funds Act and the CID personnel. The inspections were well within the powers of the authorities and there was no violation of the norms, he asserted.
Referring to Section 61 (2) of the Act, he submitted that the registrar was empowered to appoint officers as inspectors of chits and these officers were empowered to perform the acts under Section 46 of the Act. and maintained that the inspections could not be faulted.
