The court affirmed the legality of property attachment under the KPIDFE Act, emphasizing that failure to object to preliminary orders negates claims of procedural injustice.

JUDGMENT :

ANU SIVARAMAN, J.

This MFA is filed assailing the order dated 06.06.2023 passed by the XCI Additional City Civil and Sessions Judge and Special Judge for KPIDFE cases, Bengaluru (CCH-92) in Misc. No.994/2022.

2. We have heard Shri. Abhilash Raju, learned counsel for the appellant and Shri. Veeresh R. Budihal, learned counsel for respondent No.1. Notice to respondents No.2 to 4 are dispensed with vide order dated 21.03.2024.

3. The brief facts of the case are:

The appellant was managing a small business of supplying stone materials, he wanted to purchase a flat to reside with his family in Bengaluru. Respondents No.3 and 4 offered to sell the schedule property for a total sale consideration of Rs.40,00,000/- and the appellant has accepted the said offer. In furtherance to that, the appellant had transferred an amount of Rs.20,00,000/- through NEFT (Rs.10,00,000/- by way of NEFT UTR No.ANBBN18219522495 dated 19.03.2018 and Rs.10,00,000/- by way of NEFT UTR No.ANBBN18219522810 dated 19.03.2018) and agreed to pay the balance sale consideration before execution of the sale deed. Respondents No.3 and 4 have acknowledged the receipt of the advance sale consideration. They have entered into an agreement for sale on 25.01.2019 and the same was registered in Book-1 No.KCH-1-05353-2018-19 in the Office of Sub-Registrar, Gandhi Nagar, Bengaluru. Subsequently, the appellant had performed his part of contract and paid the balance sale consideration. Respondents No.3 and 4 have executed a sale deed on 04.02.2019 in favour of the appellant and the same was duly registered in the office of Sub-Registrar, Gandhi Nagar, Bengaluru. The Bruhat Bengaluru Mahanagara Palike (BBMP) has issued Form-B, Property Register Extract incorporating the name of the appellant as owner of the schedule property on 04.04.2019 and accepted Property Tax.

4. Respondent No.1 had issued a notice dated 20.10.2023 to respondents No.3 and 4 calling upon them to hand over possession of the schedule property and the same was affixed on the door of schedule/house property. Said notice disclosed provisional attachment by the Government of Karnataka under Section 3 of the Karnataka Protection of Interests of Depositors in Financial Establishments Act, 2004 , ('KPIDFE Act' for short). Then, it came to the notice of appellant that respondent No.2 was alleged to be involved in fraudulent transaction and had failed to return the deposits on maturity to depositors.

5. The appellant had challenged the notice dated 20.10.2023 in Writ Petition No.24108/2023 before this Court and this Court had disposed of the said Writ Petition on 08.11.2023, permitting the appellant to make a representation to respondent No.1 for appropriate reliefs. In compliance with the order dated 08.11.2023 passed by this Court, the appellant had submitted his representation to first respondent on 22.11.2023.

6. The first respondent has issued an endorsement dated 11.01.2024 without extending an opportunity of hearing to the appellant. The said endorsement was questioned before this Court in Writ Petition No.2029/2024 and this Court has disposed of the Writ Petition on 20.01.2024 by granting liberty to the appellant to approach the Special Court and respondent No.1 was directed not to precipitate the matter for a period of four weeks from the date of the said order. However, the trial Court on 06.06.2023, passed an order making the interim order of attachment absolute which is under challenge herein.

7. The learned counsel appearing for the appellant contends th