Ramoji Rao’s legal heirs seek withdrawal of criminal case against Margadarsi

Hyderabad:Legal heirs of the late Ch. Ramoji Rao, chairman of Margadarsi Financiers during his lifetime, on Friday argued before the Telangana High Court that the criminal proceedings against the firm and Ramoji Rao should be closed, as he had passed away. They face charges of collecting deposits from the public in violation of RBI regulations.

Supreme Court senior advocate Mukul Rohtagi, representing them, contended that Rao’s death had made the criminal case against Margadarsi Financiers infructuous. He also argued that criminal proceedings could not be shifted to the legal heirs, after the demise of the kartha of the Hindu Undivided Family (HUF). He argued that the vicarious liability will not apply to such a criminal case.

A division bench, comprising Justice P. Sam Koshy and Justice K. Sujana, was hearing a batch of petitions filed on the criminal proceedings against Margadarsi Financiers and Rao for violation of RBI rules in collecting money from the general public.

Though the deposits had been returned, the criminal proceedings must be continued for the violations made by the Kartha of the HUF was the main contention of the opposite parties like Undavali Arun Kumar. These petitions were remanded to the Telangana High Court by the Supreme Court to decide the matter expeditiously.

In a reply counter affidavit, the Reserve Bank of India, which is being represented by senior counsel L. Ravichander, submitted that the activities carried out by the Margadarsi Financiers and Rao violated Section 45S of the RBI Act and they arewere punishable under Section 58B(5A) and proceedings in respect of the same shall be continued against HUF Margadarsi Financiers, even after death of the Ramoji Rao, since it has a separate distinct legal entity from its members.

Due to paucity of the time, the court adjourned the hearing to February 28.