Provisional attachments under the BUDS Act must be confirmed by the Designated Court within statutory timelines; failure to do so renders the attachment invalid.

JUDGMENT :

BECHU KURIAN THOMAS, J.

Petitioners challenge Exhibit-P9 notice and also seek a restraint on proceedings against any recovery action against them for the alleged fraud committed by the fourth respondent.

2. The first petitioner is a private limited company, while the second petitioner claims to be its Managing Director. On 15.11.2024, petitioners were served with Exhibit-P9 notice issued by the Village Officer, stating that the District Collector, by proceedings dated 11.09.2024, provisionally attached the property situated in re-survey No.311/1 of Block No.10 of Menamkulam Village, presently included in the Apparel Park of Kerala Industrial Infrastructure Development Corporation ( for short ‘the KINFRA’).

3. The basis for issuing Exhibit-P9 was stated as proceedings initiated against entities by name ‘M/s. Nirmal Krishna Ltd./Nirmal Krishna Benefit Fund Ltd.’ under the Banning of Unregulated Deposit Schemes Act, 2019 (for short, ‘the BUDS Act’). Since petitioners are conducting their cloth manufacturing unit in the property attached, as referred to in Exhibit-P9, they have approached this Court seeking to quash the said notice and proceedings.

4. Shorn of all the unnecessary details pleaded in the writ petition, petitioners’ claim that they are conducting their business establishment pursuant to a consent obtained from KINFRA and the alleged attachment is based on proceedings initiated against the 4^th respondent, who is alleged to be a deposit taker, having collected large amounts of money from the public. Petitioners contended that they have no role in any deposit taken from any public and the attachment is without any legal basis.

5. In the counter affidavits filed by the 6th respondent, it is stated that a provisional attachment was issued by the Competent Authority under the BUDS Act on 25.11.2023 against M/s. Nirmal Krishna Nidhi Limited, Nirmal Krishna Benefit Fund Limited, Krishna Finance, Perunkadavila, Thiruvananthapuram, and their allied firms, who acted as deposit takers and collected large amounts as deposits from the public by offering exorbitant returns and later absconded without repaying the depositors. It is pleaded that a crime has been registered as FIR No.681 of 2024 of Cantonment Police Station, Thiruvananthapuram, wherein the first petitioner is arrayed as the 14th accused and the second petitioner as the 38^th accused. It is also stated that the District Collector had, through the proceedings reflected in Exhibit-P9, only attempted to enforce the provisional attachment order against the accused, and no revenue recovery proceedings as alleged in the writ petition had been initiated. It is also stated that no consequential action for confiscation, take over or sale of property have also been carried out, and the same will be initiated only upon orders from the Designated Court under Section 15 of the BUDS Act.

6. The 7th respondent in its counter affidavit inter-alia pleaded that petitioners obtained interim orders after suppressing various facts and also that there are civil suits pending between the parties. It was also pleaded that this writ petition is not maintainable since Exhibit-P9 is not a revenue recovery notice, but only a notice intimating the existence of a provisional attachment. The 8^th respondent, in its counter affidavit stated that as a depositor, his right is required to be protected, and since large amounts of money have been collected, cheated and misappropriated by the 4^th respondent along with the petitioners, Exhibit-P9 ought not to be quashed.

7. Sri. S. Ramesh Chander, the learned Senior Counsel instructed by Sri. Salil Narayanan K. A., the learned counsel for the petitioners, submitted that Exhibit-P9 notice