AEJAZ AHMED (Legal Consultant/Lawyer) 05 January 2009
As the company is governed by the RBI Act, it is not subject to the Bombay Money Lenders Act. A Bombay HC ruling states that once you are registered under the central act, the state laws will not apply.
Anil Agrawal (Retired) 05 January 2009
Please read he last para. The RBI has clearly stated that even such companies are governed by the State laws unless exempted by the State Government specifically.
Before the State Information Commission,
under Section 18 of RTI Act, 2005.
Shri Kewal Semlani, 52, Jolly Maker Chambers No.2, Nariman Point, Mumbai 400 021.
PIO & Dist. Dy. Registrar of Coop Societies Mumbai (1),
Mr. Kewal Semlani of Mumbai had given application to the PIO and Deputy Registrar of Coop. Societies,
“ (i) Exemptions under
(ii) The period to which the information relates: 1.4.2004 till the date of providing information;
(iii) Description of the information required: Certified true copies of:
a) Specific provisions of Bombay Money Lenders Act 1946 under which CCFIL are exempted from Bombay Money Lenders Act, 1946;
b) Details of all other Complaints, except those holding banking licence from RBI, which are exempted from Bombay Money Lenders Act – 1946 because of permission obtained by them from RBI for carrying on business in
c) Any other information, relevant to the above;
d) The information should be provided in print format as well as in e-format (CD) if available.”
He received reply on 9.8.2007 that the information sought in his application does not come under the definition of the information, therefore, his application is filed. Being aggrieved by this, he has complained to this Commission u/s 18 of the Act on 21.8.2007. Taking into consideration the public interest involved in this complaint it was heard on priority on 18.9.2007 when Shri Kewal Semlani,
Complainant and Mr. Patil, Dy. Registrar was present. After hearing both the parties it transpired that District Deputy Registrar seem to be of the view that since the said complaint - Citifinancial Consumer Finance India Ltd. (CCFIL) has got licence from RBI they come under the control of RBI , therefore, there is no question of taking any action under Mumbai Money Lenders’ Control Act, 1946 and this was informed by them by letter dt. 10.7.2007, based upon which the application under RTI Act, 2005 was done. Mr. Semlani produced a copy of letter he received from RBI dt. 13.8.2007, stating that even such companies are not exempt from the State laws unless the State Government has specifically exempted them. The Deputy Registrar promised that in view of the letter from RBI he will re-examine the matter and provide the information asked by the Complainant early. This position was accepted by the Complainant, Mr. Semlani, therefore, the complaint application is disposed off.
Complaint application is thus disposed off.
(Dr. Suresh V. Joshi)
Chief Information Commissioner
Anil Agrawal (Retired) 05 January 2009
Can I get the ruling of the High Court. Tks/regards,
Manish Singh (Advocate) 05 January 2009
Dear Mr. Agrawal,
money lenders act governs those persons who/ whichlends money but it does not expand its scope to the persons who/ which accepts public deposits etc.
there are two kind of NBFCs- 1. which accepts public deposit and 2. which do not accept public deposits.
NFCs which do not accept public deposits have to be registered under the money lenders act of the state if not excluded under the act. some states have excluded companies or incorporated bodies from the purview of the act but n MAHARASHTRA govt may exclude such bodies by notification which it hasnt notified yet.
the party in your case was a NBFC which didnt have the authority to accept public deposite so it was mandatory for it to have a registeration under the money lenders act.
the bombay HC that once you are registered under the central act, the state laws will not apply.
Selvam Perumal (Advocate) 07 January 2009
Kindly provide the Bombay HC ruling with citations and that of the Cause Title, so that it may be more useful.
Thanks and regards,
RAKHI BUDHIRAJA ADVOCATE (LAWYER AT BUDHIRAJA & ASSOCIATES SUPREME COURT OF INDIA) 07 January 2009
I do agree with my Ld. Friends
Anil Agrawal (Retired) 07 January 2009
I am afraid I can't agree that registration under central laws obviates the necessity of getting a licence under the State law. The two laws are different, the administering authorities are different and punishment for violation is also different. The Citi Financial Services is a NBFC floated by the Citi Bank. It obtained registration from the RBI which confirmed that it was obliged to obtain licence under the State law also.
Anil Agrawal (Retired) 12 January 2009
Can any learned friend supply with a copy of the judgement referred to in the following article:
Anil Agrawal (Retired) 16 January 2009
These are two separate Acts. The mixing of RBI Act and Money Lenders Act does not arise. Registration is a must under both the Acts for a NBFC.
Sanjeev Dudhat (Lawyer) 22 January 2009
The entire discusssion was very analytic and infromative