The court found a procedural violation in not issuing statutory notices for asset attachment but allowed re-evaluation of the case, emphasizing the principles of natural justice while establishing the validity of the Designated Court's actions under the BUDS Act.

JUDGMENT :

A.BADHARUDEEN, J.

The order in Crl.M.P. No.1995/2025 in S.C. No.1379/2024 dated 14.08.2025 on the files of the Additional District and Sessions Court-VII, Ernakulam (the Designated Court) under the Banning of Unregulated Deposit Schemes Act, 2019 [hereafter referred as ‘BUDS Act, 2019’ for short] is under challenge in this appeal filed under Section 19 of the BUDS Act, 2019, at the instance of the respondent in the above petition. As per the order impugned, after adjudicating a petition filed by the 2nd respondent herein, who is the petitioner in the above case, the Designated Court directed the competent authority to take possession of the assets mentioned in C.M.P. No.3234/2023, within one month from the date of receipt of the order.

2. Heard the learned counsel for the appellant, the learned Public Prosecutor and the learned counsel appearing for the 2^nd respondent. Perused the order under challenge and relevant materials available.

3. The genesis of the case to be discernible is that, the 2^nd respondent initially approached the competent authority to exercise its powers under Sections 12 and 13 of the BUDS Act, 2019. But the competent authority was not inclined to pass any order and accordingly, the 2^nd respondent lodged C.M.P. No.1891/2023 as a private complaint before the Designated Court and after complying the procedure, the Designated Court took cognizance of the matter and accordingly, case as S.C. No.1379/2024 has been registered, alleging that the appellant herein committed offences under Sections 21 and 22 of the BUDS Act, 2019. While the said case has been pending before the Court, C.M.P. No.3234/2023 has been filed by the 2nd respondent before the Designated Court and on issuing notice to the respondent therein, an order was passed on 25.08.2023 by the Designated Court directing the competent authority to attach the property in terms of Section 18 (c) of the BUDS Act, 2019. Thereafter, even though the competent authority is empowered to file an application within 60 days before the Designated Court, seeking confirmation of the attachment and sale of the property, invoking power under Section 15 of the BUDS Act, 2019, by the Designated Court, no action taken at the helm of the competent authority. Accordingly, again in the year 2025, the 2^nd respondent No.1995/2025 seeking interference of the Designated Court by exercising power provided under (c) of the BUDS Act, 2019 and the impugned order has been passed in exercise of the power given to the Designated Court under (c) of the BUDS Act, 2019.

4. The learned counsel for the appellant argued that, the power of the Designated Court under Section 18 (c) of the BUDS Act, 2019, is not fully independent and as per Section 13 of the BUDS Act, 2019, though the competent authority is empowered to pass provisional attachment in order to protect priority of depositors’ claim, the authority failed to pass any order, when the 2^nd respondent approached the authority with prayer to do the said exercise. So, according to the learned counsel for the appellant, even though the order in C.M.P. No.3234/2023 was passed by the Designated Court, directing the competent authority to effect attachment, then the competent authority, after the attachment should have exercised powers under Section 14 of the BUDS Act, 2019. When the competent authority files an application with such particulars as may be prescribed before the Designated Court for making the provisional attachment absolute and for permission to sell the property so attached by public auction or if necessary, by private sale, the Designated Court shall