Plea filed in SC against HC order dismissing challenge to provisions of BUDS Act & KPID Act

New Delhi, Jun 3 (PTI) An appeal has been filed in the Supreme Court against a high court verdict which dismissed a petition challenging the validity of certain provisions of the Banning of Unregulated Deposit Schemes Act, 2019 (BUDS) and the Kerala Protection of Interests of Depositors in Financial Establishments (KPID) Act, 2013.

While the BUDS Act provides for a comprehensive mechanism to ban unregulated deposit schemes other than deposits taken in the ordinary course of business and to protect the interest of depositors, the KPID Act is meant to protect the interests of depositors in financial establishments in Kerala.

The plea filed in the apex court has challenged the Kerala High Court's April 2024 verdict.

"The High Court of Kerala erred in holding that section 1(3) of the BUDS Act giving retrospective effect from February 21, 2019 is not violative of Article 20(1) of the Constitution, even though the BUDS Act was enacted only on July 31, 2019," said the plea, filed through advocate Suvidutt MS.

It claimed that the high court erred in not holding that the KPID Act is repugnant to the BUDS Act, "as the power to enact such a statute vest exclusively with the Central Government under the Union List".

The plea has been filed by a Kerala based woman, who is an accused in a case lodged there.

It said the petitioner was a receptionist working in a company and the allegation was that after collecting deposits from the de-facto complainant on June 17, 2019 promising interest at the rate of 20 per cent per month, the main accused along with others failed to abide by the assurance or return the deposits.

The plea said the petitioner had filed a petition before the high court challenging the constitutional validity of section 1(3) and section 25(3) of the BUDS Act as being violative of Articles, including 14 (equality before law) and 21 (protection of life and personal liberty) of the Constitution.

"The petitioner herein also challenged the validity of section 5 of the Kerala Protection of Interest of Depositors in Financial Establishments Act, 2013 (KPID Act) as being repugnant to the BUDS Act," it said.

Section 5 of the KPID Act deals with default in repayment of deposits and interests honouring the commitment. PTI ABA ABA SK SK