S. MOHAN, J.

1. All these civil appeals arise by certificate granted by the High Court of Delhi against the decision reported in Kanta Mehta v. Union of India. ((1987) 62 Com Cas (del)

2. All these civil appeals and writ petitions challenge the constitutional validity of Chapter III-C read with Section 58-B(5-A) of the Reserve Bank of India Act, 1934, introduced by the Banking Laws (Amendment) Act, 1983 (Act 1 of 1984). Hence, they are dealt with under a common judgment

3. In order to appreciate the challenge the necessary legal background may be set out

4. In the year 1949, the Banking Regulation Act of 1949 was enacted. That contained regulatory provisions in regard to banking under the surveillance of the Reserve Bank of India as to what would constitute "banking" as defined under Section 5(b) of the 1949 Act

5. In the year 1959, the Banking Companies (Amendment) Act, 1959 was passed. Section 17 and 18 were substituted which required banking companies to create reserve fund and maintain cash reserve. In the year 1963, Banking Laws (Miscellaneous Provisions) Act, 1963 inserted Chapter III-B in the Reserve Bank of India Act. This chapter conferred extensive powers on the Reserve Bank of India to issue suitable instructions, to regulate and monitor diverse activities of non-banking companies. The powers to control and regulate these non-banking institutions are set out in Section 45-I to 45-L. While exercising these powers, the Reserve Bank of India was issuing various directions to these non-banking financial institutions. One such important direction was issued on January 1, 1967 to the effect that the non-banking financial companies were not to hold deposits in excess of 25 per cent of its paid-up capital and the reserves as also to non-banking, non-financial companies. They were also required to take steps to keep the deposits within the limits. This direction was challenged unsuccessfully before the Madras High Court as seen from the case of Mayavaram Financial Corporation Ltd. v. Reserve Bank of India

6. In 1968, by Banking Laws (Amendment) Act, 1968 Sections 10-A to 10-D were introduced. Section 10-A provided that the Board of Directors shall include persons with professional or special knowledge. Section 10-A(5) empowered the Reserve Bank of India to vary the composition of the Board

7. When a report of the Study Group of non-banking financial intermediaries was submitted in the year 1971 that was studied. Thereafter in 1973 the Reserve Bank of India issued Miscellaneous Non-Banking companies (Reserve Bank) Directions, 1973 placing certain restrictions on companies carrying on prize chit and chit business from receiving deposits from the public

8. In 1974, Section 58-A of the Companies Act was inserted by the Companies (Amendment) Act of 1974, which came into force from February 1, 1975. The object was to regulate deposits received by non-banking non-financial companies. The financial companies were already covered by Reserve Bank of India directions under the Reserve Bank of India Act. Therefore, they were exempted under Section 58-A(7) from the purview of that section. Since the non-banking non-financial companies came within the purview of Section 58-A, the earlier directions issued by the Reserve Bank of India Act to non-banking non-financial companies in the year 1966 were withdrawn. By an amendment of 1977, Section 58-A was further enlarged and the Central Government was empowered to grant extensions

9. In June 1974, another Study Group was constituted which is popularly known as James Raj Committee

10. In July 1975, the above Study Group gave its report. In accordance with the recommendations of the Study Group elaborate rules were issued by the Central Government under Section 58-A, called Banking Companies (Acceptance of Deposits) Rules, 1975 with a view to regulate the various activities of the companies to accept deposit from public. The validity of the section and the deposit rules were questioned. This Court in Delhi Cloth and General Mills Co. Ltd. v. Union of India upheld the same

11. In 1977, directions were issued by the Reserve Bank of India superseding earlier directions of 1966 and 1973

12. In 1978, Bill 183 of 1978 called Banking Laws (Amendment) Bill, 1978 was introduced in the Parliament. The said Bill provided limits on depositors which were lower than the current provisions. However, the Bill lapsed on dissolution of Parliament. Thereafter Prize Chits and Money Circulation Schemes (Banning) Act, 1978 was enacted. This was also challenged, But that challenge was thrown out by this Court in Srinivasa enterprises v. Union of India.

13. In 1981, several new regulatory directions were given by the Reserve Bank of India. Inter alia they included restrictions on accepting or renewing deposits from shareholders, Directors etc. which exceeded 15 per cent of the net-owned funds of the companies as also restricted payment of interest on deposits as a rate of interest exceeding 15 per cent per annum. The validity of the amendments was upheld by the Madras High Court in the case reported in A.S.P. Aiyar v. Reserve Bank of India 1983 AIR(Mad) 330)

14. In State of W.B. v. Swapan Kumar Guha known as Sanchaita case this Court while quashing the FIR launched against the firm Sanchaita Investments, directed that the Government and Reserve Bank of India should look into the matter deeply. It is in this background the Banking Laws (Amendment) Act, 1983 came to be the enacted. Section 45-S stated thus

"45-S. Deposits not to be accepted in certain cases. - (1) No person, being an individual or a firm or an unincorporated association of individuals shall, at any time, have deposits from more than the number of depositors specified against each, in the table belowTABLE

(i) Individual Not more than twenty-five depositors

excluding depositors who are relatives

of the individual

(ii) Firm Not more than twenty-five depositors per

partner and not more than two hundred and

fifty depositors in all, excluding, in

either case, depositors who are relatives

of any of the partners

(iii) Unincorp- Not more than twenty-five depositors per

orated individual and not more than two hundred and

association fifty depositors in all, excluding in either

case

of depositors who are relatives of any of the

individuals individuals constituting the association

(2) Where at the commencement of Section 10 of the Banking Laws (Amendment) Act, 1983, the deposits held by any such person are not in accordance with sub-section (1), he shall, before the expiry of a period of two years from the date of such commencement, repay such of the deposits as are necessary for bringing the number of depositors within the relative limits specified in that sub-section

Explanation. - For the purposes of this Section -

(a) a person shall be deemed to be a relative of another if, and only if, -

(i) they are members of a Hindu Undivided family; or

(ii) they are husband and wife; or

(iii) the one is related to the other in the manner indicated in the list of relatives below

List of Relatives

1. Father. 2. Mother (including step-mother). 3. Son (including step-son). 4. Sons wife. 5. Daughter (including step-daughter). 6. Fathers father. 7. Fathers mother 8. Mothers mother. 9 Mothers father. 10. Sons son. 11. Sons sons wife. 12. Sons daughter. 13. Sons daughters husband. 14. Daughters husband. 15. Daughters son 16. Daughters sons wife. 17. Daughters daughter. 18, Daughters daughters husband. 19. Brother (including step-brother). 20. Brothers wife. 21. sister (including step-sister) 22. Sisters husband;(b) a person in whose favour a credit balance is outstanding for a period not exceeding six months in any account relating to mutual dealings in the ordinary course of trade or business shall not, on account of such balance alone, be deemed to be a depositor"

Thus the number of depositors has come to be limited

15. As to the penalty for contravention of Section 45-S it is provided for under Section 58-B (5-A) It runs thus

"(5-A) If any person contravenes any provision of Section 45-S, he shall be punishable with imprisonment for a term which may extend to two years. or with fine which may extend to twice the amount of deposit received by such person in contravention of that section or rupees two thousand, whichever is more, or with both" *

16. These provisions were challenged by the appellants in the various civil appeals as violative of Articles 14 and 19 of the Constitution. A Division Bench of the High Court of Delhi in Kanta Mehta case held

"Section 45-S read with Section 58-B(5-A) of Chapter III-C of the Reserve Bank of India Act, 1934, as introduced by Section 10 of the Banking Laws (Amendment) Act, 1983, is not violative of Articles 14 and 19 of the Constitution. There is nothing demonstrably irrelevant or perverse in limiting in Section 45-S the number of depositors that an individual, firm or association could accept

Nor is there any element of compulsion on individuals and firms or associations which are not incorporated to incorporate themselves as a company and Article 19(1)(c) is not violated by the provisions of Section 45-S limiting the number of depositors whom individuals, firms and unincorporated associations could accept

Chapter III-C of the Reserve Bank of India Act, 1934, imposes reasonable restriction on the right of individuals. firm and unincorporated associations to carry on the business of acceptance of deposits and advancing or giving loans to the public. There is also a further safeguard that Chapter III-C is being operated under the supervision and control of the Reserve Bank of IndiaThe business of acceptance of deposits from the public does not fall within Entry 30 or Entry 32 of List II of Schedule VII of the Constitution. It falls within Entry 45 or in any case under Entry 97 of List I of Schedule VII under which only Parliament has power to pass the impugned legislation. Parliament had full competence and power to pass Chapter III-C of the Reserve Bank of India Act, 1934"

17. Mr. G. Viswanatha Iyer, learned counsel for the writ petitioners in W.P. Nos. 508 and 534 of 1988 submits that Section 45-B is violative of the fundamental right under Article 19(1)(g) of the Constitution as it restricts the number of depositors and the rate of interest under Section 4(2)(iii) of the Kerala Money-Lenders Act, 1958 (hereinafter referred to as the Kerala Act). The two years period prescribed under Section 45-S(2) is unreasonable. Under Kerala Act, with effect from October 15, 1985 only 14 per cent interest alone could be charged. In any event, while receiving deposits was not an offence, making it a criminal liability and directing payment. would amount to ex post facto law, offending Article 20(1) of the Constitution. In support of this submission, reliance is placed on Chennai Bottling Co. Pvt. Ltd. v. Assistant Register of Companies, Madras Oudh Sugar Mills Ltd. v. Union of India

18. The other learned counsel seriously pressed the point relating to criminal liability and prayed for time to comply with the provisions of Section 45-S

19. Mr. Anil B. Divan, learned counsel appearing for respondent 2 in C.A. No. 447 of 1986, after referring us to the development of law, would submit that it is open to the Government to regulate the economic activities. While examining the validity of such provisions the courts always have regard to the wisdom of the legislature because that alone has the necessary information and expertise pointing to the need of such a legislation

20. In R. K. Garg v. Union of India this aspect of the matter was highlighted

21. It was in this view, this Court upheld Maharashtra Debt Relief Act, 1976 in Fatehchand Himmatlal v. State of Maharashtra. If properly analysed, it can be seen that these provisions constitute a regulatory scheme and not a penal liability

22. Much is made of the penal provisions under Section 58-B(5-A). It is submitted that imprisonment of a recalcitrant debtor is permissible in law. If one goes by the facts of these cases even after 1986, they collect deposits when law required them not to do so

23. Under Section 45-I(bb) deposit has been defined. If as per the definition there are enough sources of deposit there is no reason why the appellants cannot reduce the deposits. If, therefore, the package is reasonable there is no justification to dilute the effect of Section 58-B(5-A). While examining the scope of the section it might be contrasted with Section 125(3) of the Criminal Procedure Code wherein a sufficient cause is provided

24. In Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd. this Court had occasion to consider the adventures indulged by persons like the appellants. It criticised the fraud played by such financial vultures

25. This approach was approved in Peerless General Finance and Investment Co. Ltd. v. Reserve Bank of India.

26. The learned counsel also draws our attention to the Non-banking Financial Companies (Reserve Bank) Directions of 1966. They came into force on January 1, 1967. Clause 4 sub-clause (3) specifically provides that the deposit shall be reduced to 25 per cent of the paid-up capital for which a two-year period was provided. Similar directions of 1977 known an Non-Banking Financial Companies (Reserve Bank) Directions, 1977 came to be issued with effect from July 1, 1977

27. There were complaints, even then, that the financial companies were not paying interest regularly and the Reserve Bank was requested to help the depositor. Therefore, in the teeth of this provision, to say that suddenly the appellants and the writ petitioners are called upon to reduce, would work hardship and they should not be penalised, is incorrect. They took a calculated risk and, therefore, they had to suffer for their own fault

28. In examining the various submissions addressed on behalf of the appellants and the petitioners we propose to examine the same in the following background since it is a law relating to regulation of economic activities

29. In R. K. Garg case it is held

"Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It has been said by no less a person than Holmes, J. that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait-jacket formula and this is particularly true in case of legislation dealing with economic matters, where having regard to the nature of the problems required to be dealt with, greater play in the joints has to be allowed to the legislature. The court should feel more inclined to give judicial deference to legislative judgment in the field of economic regulation than in other areas where fundamental human rights are involved. Nowhere has this admonition been more felicitously expressed than in Morey v. Doud 354 US 457 : 1 L Ed 2d 1485 (1957) where Frankfurter, J. said in his inimitable styleIn the utilities, tax and economic regulation cases, there are good reasons for judicial self-restraint if not judicial deference to legislative judgment. The legislature after all has the affirmative responsibility. The courts have only the power to destroy, not to reconstruct. When these are added to the complexity of economic regulation, the uncertainty, the liability to error, the bewildering conflict of the experts, and the number of times the judges have been overruled by events - self limitation can be seen to be the path to judicial wisdom and institutional prestige and stability.

The Court must always remember that legislation is directed to practical problems, that the economic mechanism is highly sensitive and complex, that many problems are singular and contingent, that laws are not abstract propositions and do not relate to abstract units and are not to be measured by abstract symmetry.; that exact wisdom and nice adaptation of remedy are not always possible and that judgment is largely a prophecy based on meager and uninterpreted experience. Every legislation particularly in economic matters is essentially empiric and it is based on experimentation or what one may call trial and error method and therefore, it cannot provide for all possible situations or anticipate all possible abuses. There may be crudities and inequities in complicated experimental economic legislation but on that account alone it cannot be struck down as invalid."

At page 706, para 19 it is held

".... That would depend upon diverse fiscal and economic consideration based on practical necessity and administrative expediency and would also involve a certain amount of experimentation on which the Court would be least fitted to pronounce. The Court would not have the necessary competence and expertise to adjudicate upon such an economic issue. The Court cannot possibly assess or evaluate what would be the impact of a particular immunity or exemption and whether it would serve the purpose in view or not. There are so many imponderables that would enter into the determination that it would be wise for the Court not to hazard an opinion where even economists may differ. The Court must while examining the constitutional validity of a legislation of this kind be resilient, not rigid, forward looking, not static, liberal, not verbal and the Court must always bear in mind the constitutional proposition enunciated by the Supreme Court of the United States in Munn v. Illinois namely, that courts do not substitute their social and economic beliefs for the judgment of legislative bodies. The Court must defer to legislative judgment in matters relating to social and economic policies and must not interfere, unless the exercise of legislative judgment appears to be palpably arbitrary. The Court should constantly remind itself of what the Supreme Court of the United State said in Metropolis Theater Co. v. City of Chicago 228 US 61 : 57 L ED 730 (1912))The problems of government are practical ones and may justify, if they do not require, rough accommodations, illogical it may be, and unscientific. But even such criticism should not be hastily expressed. What is best is not always discernible, the wisdom of any choice may be disputed or condemned. Mere errors of government are not subject to our judicial review."

30. No doubt, the impugned legislation places restrictions on the right of the appellants to carry on business, but what is essential is to safeguard the rights of various depositors and to see that they are not preyed upon. From the earlier narration, it would be clear that the Reserve Bank of India, right from 1966, has been monitoring and following the functioning of non-banking financial institutions which invite deposits and then utilise those deposits either for trade or for other various industries. A ceiling for acceptance of deposits and to require maintenance of certain liquidity of funds as well as not to exceed borrowings beyond a particular percentage of the net-owned funds have been provided in the corporate sector. But for these requirements, the depositors would be left high and dry without any remedy

31. Even the corporate sector was not free from blame. It had done damage to the economy and brought ruination to small depositors. This was why Section 58-A in the Companies Act of 1956 came to be introduced. It is worthwhile to quote the notes on clauses concerning this provisions

"It has been the practice of the companies to take deposits from the public at high rates of interest. Experience has shown that in many cases deposits taken by the companies have not been refunded on the due dates, either the companies have gone in liquidation or funds are depleted to such an extent that the companies are not in a position to refund the deposits, it was accordingly considered necessary to control the activities of the companies when accepting deposits from the the public." *

32. We approve of the reasoning of the Delhi High Court in Kanta Mehta case. At pages 798-99 it runs as follows

"The danger of allowing deposits to be accepted without regulation is so acute and urgent, that to bind the hands of the legislature that only one course alone is permissible and not to permit a play of joints would be to totally make it ineffective in meeting the challenge of the social evil. For, it must be remembered that In the ultimate analysis, the mechanics of any economic legislation has necessarily to be left to the judgment of the executive and unless it is patent that there is hostile discrimination against a class, the processual basis of price fixation has to be accepted in the generality of cases as valid. (See Prag Ice and Oil Mills v. Union of India. Also such provisions meant to check such evil must be viewed, as Krishna Iyer, J. said through a socially constructive, not largely captious, microscope to discover glaring unconstitutional infirmity, that when laws affecting large chunks of the community are enacted, stray misfortunes are inevitable and that social legislation without tears, affecting vested right is virtually impossible. (See B. Banerjee v. Smt. Anita Pan.

The stress by learned counsel for the petitioners on the private right of the petitioners to have unrestricted deposits and make advances in any manner they like must receive short shrift, for by now, it is too well settled to be doubted that private rights must yield to the public need and that any form of regulation is unconstitutional only if arbitrary, discriminatory or demonstrably irrelevant to the policy the legislature is free of adopt." *

33. Maybe, Kerala Act restricts the rates of interest under Section 4(2)(iii) but that cannot enable the writ petitioners in W.P. Nos. 508 and 534 of 1988 to disregard these provisions, being the non-banking financial institutions

34. Hence, we reject the first of the arguments

35. As regards the reasonableness of two-year period Section 45-I(bb) of the Reserve Bank Act defines "deposit" as follows

"(bb) deposit includes and shall be deemed always to have included any receipt of money by way of deposit or loan or in any other form, but does not include -

(i) amounts raised by way of share capital;

(ii) amounts contributed as capital by partners of a firm;

(iii) amounts received from a scheduled bank or a cooperative bank or any other banking company as defined in clause (c) of Section 5 of the Banking Regulation Act, 1949 (10 of 1949);

(iv) any amount received from, -

(a) the Development Bank

(b) a State Financial Corporation established under the State Financial Corporations Act, 1951

(c) any financial institution specified in or under Section 6-A of the Industrial Development Bank of India Act, 1964 (18 of 1964), or

(d) any other financial institution that may be specified by the Bank in this behalf;

(v) amounts received, in the ordinary course of business, by way of -

(a) security deposit

(b) dealership deposit

(c) earnest money, or

(d) advance against orders for goods, properties or service;

(vi) any amount received from an individual or a firm or an association of individuals not being a body corporate, registered under any enactment relating to money-lending which is for the time being in force in any State; and

(vii) any amount received by way of subscriptions in respect of a chit." *

36. Therefore, as rightly argued by Mr. Anil Divan as per this definition, if there are enough sources of deposit there is no reason why the appellants and the writ petitioners cannot reduce the deposits. Further, not-banking financial companies are required under clause 4 sub-clues (3) as follows

"(3) Every non-banking financial company, not being a hire-purchase finance company, or a holding finance company, which on the date of commencement of these directions holds deposits in excess of twenty five per cent of its paid-up capital and free reserves shall secure before the expiry of a period of two years from the date of such commencement, by taking such steps as may be necessary for this purpose, that the deposits, received by the company and outstanding on its books are not in excess of the aforesaid limit." *

37. These directions came into force from January 1, 1967. Similar directions came to be issued as Miscellaneous Non-Banking Companies (Reserve Bank) Directions. Clause 5 dealing with acceptance of deposits states as under

"Acceptance of deposits by miscellaneous non-banking companies. - On and from 1st of July, 1977, no miscellaneous non-banking company shall -

(a) receive any deposit repayable on demand or on notice, or repayable after a period of less than six months and more than thirty-six months the date of receipt of such deposit or renew any deposit received by it, whether before or after the aforesaid date unless such deposit, on renewal, is repayable not earlier than six months and not later than thirty-six months from the date of such renewal;

Provided that where a miscellaneous non-banking company has before 1st July, 1977, accepted deposits repayable after a period of more than thirty-six months, such deposits shall, unless renewed in accordance with these directions, be repaid in accordance with the terms of such depositsProvided further that nothing contained in this clause shall apply to monies raised by the issue of debentures or bonds;

(b) receive or renew -

(i) any deposit against an unsecured debenture or any deposit from a shareholder (not being a deposit received by a private company from its shareholders as is referred to in clause (vi) or paragraph 4) or any deposit guaranteed by any person who, at the time of giving such guarantee, was or is a director to the company, if the amount of any such deposit together with the amount of such other deposits of all or any of the kinds referred to in this sub-clause and outstanding in the books of the company as on the date of acceptance or renewal of such deposits, exceeds fifteen per cent of its net owned funds

(ii) any other deposit, if the amount of such deposit, together with the amount of such other deposits, not being deposits of the kind referred to in sub-clause (i) of this clause already received and outstanding in the books of the company as on the date of acceptance of such deposits, exceeds twenty five per cent of its net owned funds."

38. If, therefore, this was the position, it cannot be contended that suddenly the companies like the appellants and the petitioners are called upon to reduce deposits. Even otherwise, the interests of the depositors is the prime concern

39. Coming to the last point, as to whether Section 58-B(5-A) is violative of Article 20(1) of the Constitution, we find, when a similar argument was raised against Section 58-A of the Companies Act, that was repelled by this Court in Delhi Cloth and General Mills Co. Ltd. v. Union of India thus

"Mr. G. A. shah canvassed one more contention, After stating that Rule 3-A became operative from April 1, 1978, he specifically drew attention to the proviso to Rule 3-A(1) which required that with relation to the deposits maturing during the year ending on March 31, 1979, the sum required to be deposited or invested under sub-rule (1) of Rule 3-A shall be deposited or invested before September 30, 1978. It was then contended that this provision would necessitate depositing 10% of the deposits maturing during the year ending with March 31, 1979 which may have been accepted prior to the coming into force of Rue 3-A and to this extent the rule has been made retrospective and as there was no power conferred by Section 58-A to prescribe conditions subject to which deposits can be accepted retrospectively Rule 3-A is ultra vires Section 58-A. Unquestionably, Rule 3-A became operative from April 1, 1978. The obligation cast by Rule 3-A is to deposit 10% of the deposits maturing during the year in the manner prescribed in Rule 3. Some deposits would be maturing between April 1, 1978 and March 31, 1979. To provide for such marginal situation, a proviso is inserted. Does it to make the rule retroactive Of course, not In D. S. Nakara v. Union of India a Constitution Bench of this Court has, in this context observed as underA statute is not properly called a retroactive statute because a part of the requisites for its action is drawn from a time antecedent to its passing.

Viewed from this angle, the provisions can be properly called prospective and not retroactive. Therefore, the contention does not commend to us."

40. In the light of this, we should hold that the ruling of the Madras High Court in Chennai Bottling Co. Pvt. Ltd. is incorrect

41. As to the plight of these depositors we need only to quote the case in Peerless General Finance and Investment Co Ltd. At paragraph 37 it is held : (SCC pp. 452-53)

"We would also like to query what action the Reserve Bank of India and the Union of India are taking or proposing to take against the mushroom growth of finance and investment companies offering staggeringly high rates of interest to depositors leading us to suspect whether these companies are not speculative ventures floated to attract unwary and credulous investors and capture their savings. One has only to look at the mornings newspaper to be greeted by advertisements inviting deposits and offering interest at astronomic rates. On January 1, 1987 one of the national newspapers published from Hyderabad, where one of us happened to be spending the vacation, carried as many as ten advertisements with banner headlines, covering the whole of the last page, a quarter of the first page and conspicuous spaces in other pages offering fabulous rates of interest. At least two of the advertisers offered to double the deposit in 30 months, 2000 for 1000, 10, 000 for 5000, they said. Another advertiser offered interest ranging between 30 per cent to 38 per cent for periods ranging between six months to five years. Almost all the advertisers offered extra interest ranging between 3 per cent 6 per cent if deposits were made during the Christmas-Pongal season. Several of them offered gifts and prizes. If the Reserve Bank of India considers the Peerless Company with eight hundred crores invested in Government securities, fixed deposits with National Banks etc. unsafe for depositors, one wonders what they have to say about the mushroom non-banking companies which are accepting deposits, promising most unlikely returns and what action is proposed to be taken to protect the investors. It does not require much imagination to realise the adventurous and precarious character of these businesses. Urgent action appears to be called for to protect the public. While on the one hand these schemes encourage two vice affecting public economy, the desire to make quick and easy money and the habit of excessive and wasteful consumer spending, on the other hand of investors who generally belong to the gullible and less affluent classes have no security whatsoever, Action appears imperative." *

And paragraph 42 also requires to be quoted : (SCC p. 454)

"I share my brothers concern about the mushroom growth of financial companies all over the country, Such companies have proliferated. The victims of the Schemes, that are attractively put forward in public media, are mostly middle class and lower middle class people. Instances are legion where such needy people have been reduced penniless because of the fraud played by such financial vultures. It is necessary for the authorities to evolve fool-proof schemes to see that fraud is not allowed to be played upon persons who are not conversant with the practice of such financial enterprises who pose themselves as benefactors of people." *

42. We may also add that this has been reaffirmed in Peerless General Finance and Investment Co. Ltd. v. RBI

43. Therefore, we are in entire agreement with the Delhi High Court

44. Since, as we have stated above, all the appellants and writ petitioners were praying for time to comply with these provisions, the matter was adjourned from time to time. Though some of them have complied with the requirements of law yet a few others have not done so. We make it clear that in spite of this indulgence, their failure to comply cannot be countenanced

45. We dismiss the appeals and the petitions along with I.A. Nos. 1 and 2 in C.A. No. 5513 of 1985. However, there shall be no orders as to cost.