Justice Samaresh Banerjea of the high court also directed that the two companies shall not accept any fresh deposits and also froze their bank accounts. Both companies have been accepting deposits, flouting all rules.

The case will come up for hearing on September 10 for consideration of the report of the special officers. Meanwhile, directors of both the companies have to file lists of assets.

Banerjea's order was given on a writ petition filed by the West Bengal government, which was acting on complaints filed by depositors with the police following the companies' failure to repay them.

The writ also incorporated the RBI's inquiry and investigation report carried out on the orders of a division bench of Justices BP Banerjee and A Chakraborty given on September 12, 1996.

Sanchayani and Verona together have 45 lakh depositors mainly in West Bengal. The RBI report noted that in both the cases, liabilities far exceeded the assets.

According to RBI's prelimiary investigation report in case of Sanchayani, the deposit liability was Rs 219.52 crore as on March 31, 1994. The company continued to accept deposits.

Sanchayani's accumuated loss was Rs 129.14 crore as on December 31, 1998. In RBI's estimate, the total liability was Rs 209.65 crore where it noted that around 36 per cent of depositors' money is lost.

In the case of Verona, RBI was unable to file any report after May 1994, since the company could not produce any documents.

According to a May 1994 investigation report by RBI officers BK Ray, U Bandyopadhyay and NK Mukherjee, Verona had a paid-up capital of Rs 28.43 lakh and its deposit liabilities were understated by Rs 70.03 crore as on March 31, 1993.

The investigating officers noted that the accounts were not drawn up properly and certain RBI certificates had been "forged".

The officers found that the company had no investments specified by the RBI. In Verona's case, this should have been around Rs 82.32 crore. The RNBC invested Rs 7.61 crore in fixed assets and another Rs 5.88 crore in land and buildings.

It advanced loans of Rs 9.21 crore to depositors and field agents, against which the company officials were unable to produce any supporting documents.

Moreover, its entire investment in fixed deposits of Rs 79.88 lakh was pledged to United Bank of India's Durgachowk branch for securing a loan of Rs 60.20 lakh. The officers pointed out that there were no unencumbered fixed deposits, which should have been to the tune of Rs 11.76 crore in line with the RBI directives.

The state government was represented by Jaydip Kar, the RBI by Subroto Ray, the two RNBCs by MB Sarkar and PK Das respectively.

The third RNBC to have defrauded the depositors was Overland Investment Pvt Ltd. The court had earlier appointed special officers directing it to submit their reports. The hearing on the reports by the special officers is scheduled to come up on August 17 before Justice S Banerjea.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.