After Saradha scam, WB chit fund bill to have retrospective effect

New bill that cracks down on sham deposit companies will have retrospective effect, in move by Mamata Banerjee government to contain political fallout of Saradha chit fund scam.

Kolkata: The new bill that aims to crack down on sham deposit companies will have retrospective effect and also allow confiscation of properties, a minister said today in a move by the Mamata Banerjee government to try to contain the political fallout of Saradha chit fund scam.
The proposal by the West Bengal government in the wake of the Saradha scam that has exploded on its face has, however, triggered a debate as to whether the retrospective clause in the more stringent bill will pass judicial scrutiny.

The West Bengal Protection of Interest of Depositors in Financial Establishments Bill, 2013 will have retrospective effect, Parliamentary Affairs Minister Partha Chatterjee said. The scam has left thousands of investors in the lurch.

A special session of the Assembly has been convened on April 29 and 30 for introduction of the bill.

The new bill will replace the earlier West Bengal Protection of Depositors Interest Bill 2009 introduced by the previous Left Front government, which was sent to the President but did not get his assent. The old bill has been sent back to the state government which will now withdraw it.

"Once it becomes an act, the new legislation will be able to effectively deal with scams like Saradha Group. The new bill will be more stringent and empower authorities to confiscate and not merely attach the assets of perpetrators of frauds," Chatterjee said.

He said that under the previous bill, only establishments could be booked, but the new bill will empower the government to take action against individuals.

Disputing retrospective effect of the new bill, former Lok Sabha Speaker Somnath Chatterjee told PTI, "I have not seen the Bill. But there cannot be an offence created retrospectively".

Echoing him, former assembly speaker and senior lawyer Hashim Abdul Halim said, "For a crime committed two years ago, punishment cannot be given by bringing in a new legislation with retrospective effect.

Senior Calcutta High Court lawyer Bikash Ranjan Bhattacharya said such a bill could be challenged in court.

He said the government could not give retrospective effect to all laws.

"While dealing with criminal laws, retrospective effect cannot be given. If somebody feels his rights are infringed, he can move court against such a bill," Bhattacharya said.