HC frees Margadarsi from criminal liability in 18-yr-old case
A division bench comprising Justice P Sam Koshy and Justice K Sujana ruled that the case stood abated following the death of Ramoji Rao last year. The court held that in the absence of the main accused, further prosecution of the company could not continue effectively.
The ruling thus brings a long-pending legal battle to a close, nearly 18 years after the original case was filed.
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The AP govt had alleged that Margadarsi collected public deposits without legal permission, violating provisions of the Reserve Bank of India (RBI) Act.
The firm, however, argued that it was functioning as a Hindu joint family business, which is not prohibited under law, and that the restrictions cited in the RBI Act applied only to non-banking financial companies.
The RBI opposed this argument, asserting that the charges were against the corporate entity, not just Ramoji Rao. It said the business operations of Margadarsi Financiers were still active, and the legal question of whether it had accepted deposits in violation of the RBI Act remained unresolved.
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Therefore, it argued, the case should not be dismissed on the grounds of the founder's death.
However, Justice Koshy, announcing the court's decision, stated that prosecution could not move forward in the absence of the key individual accused and allowed the company's plea.
Margadarsi was represented by a team of senior advocates, including S Nagamurthy, Mukul Rohatgi, and Siddharth Luthra. The RBI was represented by senior counsel L Ravichander, and the AP govt by public prosecutor Palle Nageshwar Rao.
The high court also closed the petitions filed by the current management of the company seeking to be made parties in the case. Since the main petition was allowed and the criminal cases quashed, their applications were declared closed.
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