Problem of depositors, being problem of public, cannot be decided numerically.

P.D. Dinakaran, J.

I. CORNERSTONE

The Constitution is the documentation of the founding faiths of a Nation and the fundamental directions of the fulfillment. An organic, but not pedantic approach in interpreting the constitutional validity of any enactment should be the guiding principle in the judicial process. Finding of solution for the gruesome evils in economic and social life of the citizens, through the healing art of promoting Rule of Law, blending the whole statute harmoniously, without being tempted by the game of hair-splitting, to achieve the common object of the legislation should be the basic rule of construction while testing the constitutional validity of a legislation, particularly when it deals with economic and social relief’s, because the distance between societal realities and constitutional challenge often creates a dilemma while considering the legislative competency relating to a socio-economic legislation. The Court, therefore, should be more cautious as well as conscious as to its jurisdiction while irrationalising the legislative competency of the Legislature or rationalising Courts power to annul the legislation.

With this, we propose to experiment, analyze, and render our observation on the constitutional validity of the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997 (for brevity, "Tamil Nadu Act"), which, in fact, had already been upheld by the learned Single Judge of this Court (P.Sathasivam, J.) in Thiru Muruga Finance v. State of Tamil Nadu (2000 (II) CTC 609 = 2000-3-L.W.298), and the same has become final for not having been appealed against.

II. Why the Full Bench?

2. 1. Attracted by the fabulous rate of interest on the deposit, which of course is not viable commercially, the depositors day by day started investing their savings in the financial establishments, believing the said promises of the financial establishments for higher rate of interest. The depositors, who mostly belong to the poor, lower middle and middle class, are senior citizens above 80 years, senior citizens between 60 and 80 years, widows, handicapped, driven out by wards, retired Government servants, pensioners, living below the poverty line, etc. As a result, the financial establishments, which set their business on motion on false wheels, started growing. Finding no effective remedies available, in the existing legal system to safeguard the grievance of innocent depositors, the State Government, enacted the Tamil Nadu Act.

2. 2. The sole object of the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997 is to curb the mushroom growth of such financial establishments, which were grabbing money received as deposits from the public, on false promises for exorbitant and unprecedented high rate of interest, without any obligation to refund the deposits to the investors on maturity. The Tamil Nadu Act is also intended to provide a legal mechanism and judicious machinery to attach the properties of the financial establishments and that of the mala fide transferees, bring them for auction sale, realize the amount and to distribute the same to the depositors. Therefore, the State had carefully taken into consideration the public resentment as well as the public interest and safety, as these institutions went back of their promise not only to pay interest but also to refund the principal amount to the innocent depositors on maturity. The State had also taken note of the panic and unrest of the public, and the trauma caused to the poor and middle class people because of the false promises by the financial establishments, which dragged them to approach various authorities, executives as well as subordinate judiciary, for realization of the dues.

2. 3. The Tamil Nadu Act was challenged by the financial establishments before this Court in a batch of writ petitions, viz., W.P.No.4157 of 1999 etc., on the ground that the Tamil Nadu Act is dracon