Hyderabad: The Telangana High Court on Monday, August 4, quashed the criminal proceedings against Margadarsi Financiers. The court allowed the petitions filed by the company, seeking to set aside the criminal case against it.
Margadarsi Financiers had filed an interim application in January 2025, stating that all deposits had been repaid to the depositors and that the former ‘karta’ of the Hindu Undivided Family (HUF) had passed away. The application argued that the remaining members of the HUF could not be held liable as accused.
The case dates back to 2008 when the then government of unified Andhra Pradesh registered a case against the company based on a complaint that it had collected deposits from the public in violation of RBI regulations.
The High Court had previously quashed the criminal proceedings against Margadarsi Financiers in 2018. However, the complainant appealed the decision to the Supreme Court, which in April 2024 sent the petitions back to the High Court.
SC asks HC to invite objections from investors, depositors
The Supreme Court directed the High Court to invite objections from actual investors and depositors to determine if there was a need to continue the criminal proceedings against Margadarsi Financiers.
Following the High Court’s directives, the court registry issued a public notice in newspapers on September 26, 2024, inviting claims from investors and depositors.
The court noted that not a single depositor came forward, as all deposits had been repaid earlier. With the death of the former HUF ‘karta’, the court concluded that there was no need to continue the case and ruled that the criminal case against Margadarsi Financiers would be cancelled.
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