Section 9 in Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004
9. Fraudulent default by Financial Establishment.
- Any Financial Establishment, which fraudulently defaults any repayment of deposit on maturity along with any benefit 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 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 which may extend to six years and with fine which may extend to one lakh of rupees and such Financial Establishment also shall be liable for a fine which may extend to an amount equivalent to five lakhs of rupees. or where such deposits is quantifiable in terms of money twice the amount involved in such default whichever is more;Provided that in the absence of special and adequate reasons recorded by the Special Court)in the judgement of the Court, the imprisonment shall not be less than three years and the fine shall not be less than twenty thousand rupees as against each individual and not less than one lakh of rupees against such Financial Establishment.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.Chapter-IV
