SC issues notice to Hyderabad-based chit fund company on Andhra Pradesh Govt's plea for case transfer

  • Lawbeat News Desk
  • 05:17 PM, 09 Jun 2023

Read Time: 06 minutes


Court sought a reply from the chit fund company by July 18, 2023.

The Supreme Court recently issued notice on a petition filed by the Andhra Pradesh government seeking transfers of a batch of writ petitions filed by Margadarsi Chit Fund Private Limited and others against criminal actions initiated upon the company from Telangana to the state high court.

A vacation bench of Justices Aniruddha Bose and Rajesh Bindal sought a reply from the chit fund company on July 18.

Senior advocate Harish Salve for the respondent company questioned the maintainability of the plea.

He said that the Telangana High Court dealt the issues and instead of filing an appeal, the state government sought transfer. He said that the high court already had fixed the matter for June 26 and this kind of politics should be avoided.

The bench, however, said that it was not passing any order as of now and issued notice, while fixing the matter for hearing on July 18.

Margadarsi Chit Funds Pvt Ltd (MCFPL) connected with media baron and industrialist Ramoji Rao contended that Andhra Pradesh government authorities were interfering in its day-to-day business in the name of investigation.

The company, incorporated in 1962, with its registered office in Hyderabad has about 37 branch offices in Andhra Pradesh, which catered to about 1,04,789 subscribers of Andhra Pradesh. 

The Andhra Pradesh government in its plea stated that over the course of December 2022 to March 2023, investigations were undertaken by the authorities constituted under the Chit Fund Act, 1982, against MCFPL. Pursuant to the findings therein by the Registrar of Chits in multiple districts in Andhra Pradesh, FIRs were registered by these State authorities before the Andhra Pradesh CID Police Station in Guntur, Andhra Pradesh, against MCFPL for offences committed in the State of Andhra Pradesh under the Chit Fund Act, the Andhra Pradesh Protection of Depositors in Financial Establishment Act, 1999 and IPC, all committed within the State of Andhra Pradesh, and investigated by the police in Andhra Pradesh. 

"Instead of availing of their remedies available under law, the respondents chose to approach the High Court of Telangana, invoking its writ jurisdiction, where none existed. Shockingly, not only were such writ petitions entertained, interim orders were also passed restraining the Petitioner from taking any coercive steps against MCFPL, its management, employees or affiliates," it said.

The plea said that the mere fact that the corporate office of MCFPL is in Hyderabad, would not confer any jurisdiction, whatsoever, on the Telangana High Court.

The state government filed transfer petition under Section 406 of the Criminal Procedure Code, read with Article 139A(2) of the Constitution of India, seeking the transfer of writ petitions, entertained by the High Court of Telangana, which, it claimed, ex facie lacked the jurisdiction to try such matters, to the High Court of Andhra Pradesh at Amaravati.