IMPORTANT POINT
Before passing order u/s 3 it is not necessary to follow procedures u/s 4.

JUDGMENT

N.V. RAMANA, J.

1. Leave granted.

2. Appellant is before us questioning the order passed by the High Court in Crl.O.P. (MD) No. 6607 of 2013, dated 19.03.2014, whereby the High Court has set aside an ad-interim order (G.O. Ms. No. 989) [hereinafter referred to as 'G.O' for brevity], dated 24.12.2012, attaching the immovable properties of the partners of Financial Establishment (Global Capital Trading Services) i.e. respondents herein under Section 3 of the Tamil Nadu Protection of Interests of Depositors (In Financial Establishments) Act, 1997 [hereinafter 'Act' for brevity]?’

3. Brief facts of the case which are necessary for adjudication of dispute before us are, on 01.11.2010, a complaint was registered with Deputy Superintendent of Police against the respondents herein alleging that, respondents were conjointly running a Financial Establishment in the name of Global Capital Trading Services at Madurai, offering high rate of returns on investments in their Financial Establishment. Basing on the assurance given by the respondents herein, the complainant along with his relatives deposited huge sums of money with the Financial Establishment, administered by the respondents herein. Furthermore it is alleged that respondent no. 1 has returned back only a part of the deposited amount to the complainant and thereafter absconded. In light of the above averred facts, complaint was registered as (FIR No. 06/2010) was registered on 02.11.2010 under Section 406, 420 of Indian Penal Code, 1860 read with Section 5 of the Act. Based on the aforesaid complaint, G.O, dated 24.12.2012, was issued attaching the immovable properties of the respondents herein who are the partners of the financial institution under Section 3 of the Act.

4. Challenging the aforesaid G.O, respondents herein filed Criminal Original Petition under Section 482 of the Code of Criminal procedure, 1973 before the Madurai bench of The High Court of Madras in Crl.O.P. (MD) No. 6607 of 2013. The High Court has allowed the Criminal Original Petition, by setting aside the Government Order dated 24.12.2012 and directed the competent authority to initiate fresh proceedings in terms of Section 3 and 4 of the Act.

5. Aggrieved by the impugned Judgment of the High Court, State represented by its Principal Secretary to Government, Home (Police XIX) Department and others are before us.

6. The contention of the learned counsel appearing on behalf of the State is that, under Section 3 of the Act, the State Government is empowered to attach the properties belonging to a Financial Establishment which defaults in returning the deposits after maturity or fails to pay interest on deposit or fails to provide any service for which the deposit has been made. Sub-section (ii) of Section 3 of the Act confers the power on the Government to take up suo moto complaint in order to prevent fraud against the depositors. Further it empowers the State Government to pass ad-interim attachment orders subject to its satisfaction. In the present case, according to the learned senior counsel, on receiving the complaints from the depositors, Government being satisfied with the same, appointed the Revenue District Officer of Madurai as the competent authority in exercise of its power under sub-section (1) of Section 4 of the Act.

7. Furthermore he states that Sub-section (3) of Section 4 provides that, after passing an ad-interim attachment order, the competent authority, designated by the Government, has to approach the Special Court constituted under the Act, within stipulated period, for making the ad-interim order of attachment absolute and for further directions to sell the attached property by way of public auction and realize the sale proceeds. According to him, in the present case, the High Court even before reaching such a stage has set aside the proceedings on a wrong interpretation of law. Moreover he contends that the High Court has erroneously relied upon the order, dated 29.6.2011, in