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2012 Supreme(Mad) 1479
High Court of Judicature at Madras
THE HONOURABLE MRS. JUSTICE. S. VIMALA
R. Karuppusamy
Versus
Competent Authority/District Revenue Officer, Erode & Others
C.M.A.No.2563 of 2009 & M.P.Nos.1 & 2 of 2009
Decided On : 7-03-2012
For the Appellant:Mr. R. Nalliyappan, Advocate.
For the Respondents: R1, Mr. M. Venugopal, Special Government Pleader
Failure to follow mandatory requirements under the TNPID Act, including lack of verification of property ownership and violation of principles of natural justice, rendered the order of ad-interim attachment and sale of property unsustainable in law.
Headnote:
TNPID Act - Ad-interim Attachment - Sections 3, 7(1), 7(5), 8 - The court set aside the order of ad-interim attachment and sale of property, highlighting the failure to follow mandatory requirements under the TNPID Act, including lack of verification of property ownership and violation of principles of natural justice.
Fact of the Case:
The appellant challenged the order of ad-interim attachment and sale of property under the TNPID Act, contending that the property was purchased prior to the default and the transaction was not malafide. The court considered the grounds raised and the order passed by the Government in relation to the attachment.
Finding of the Court:
The court found that the order of ad-interim attachment and sale of property was unsustainable in law due to failure to verify property ownership, lack of notice to affected parties, and violation of mandatory time limits under the TNPID Act.
Issues: The issues revolved around the legality and validity of the order of ad-interim attachment and sale of property under the TNPID Act, considering the grounds raised by the appellant and the order passed by the Government.
Ratio Decidendi: The court's decision was based on the failure to follow mandatory requirements under the TNPID Act, including lack of verification of property ownership, violation of principles of natural justice, and exceeding the prescribed time limits for the order.
Final Decision: The court set aside the order of the special judge under TNPID Act, dated 23.01.2006, with regard to the property belonging to the appellant, and allowed the civil miscellaneous appeal without costs.
1. This CivilMiscellaneous Appeal has been filed praying to set aside the order passed by the Special Judge under TNPID Act, Chennai, in O.A.No.59 of 2005, dated 23.01.2006.
2. The impugned order was passed by the Special Judge under TNPID Act in O.A.No.59 of 2005, dated 23.01.2006, whereunder, the order of “ad-interim attachment” passed by the Government of Tamil Nadu in G.O.(MS) No.1056, Home (Courts-IIA), dated 27.08.2004, has been made absolute and the petitioner (Competent Authority and District Revenue Officer, Erode District, Erode) has been permitted to sell the properties in public auction and to realise the sale proceeds.
This order is under challenge under the following grounds:-
a) The property under attachment was purchased by the Appellant in the year 2000 from the fourth Respondent herein. For the default committed by the fourth Respondent in not repaying the deposits in the year 2004, the property purchased long prior to the default cannot be attached.
b) The sale transaction is not a malafide transaction and therefore, the property is not liable for attachment.
c) Even assuming that the transaction is a malafide transaction, an order of attachment passed without notice is non-est in law and is in violation of principles of natural justice.
d) The order of attachment passed without verifying the title, possession, encumbrance and revenue records and thereby, leading to unwarranted attachment, without even notice to the affected party is invalid in law.
e) The order of the Special Judge making the attachment permanent without following the mandatory requirement under Sections 3 and 7(6) of TNPID Act is illegal.
3. In view of grounds raised in this appeal the issue to be decided is whether the order of the special court making the order of ad-interim attachment absolute and permitting the competent authority to sell the property is legal and valid.
4. Before going into the contentions raised by the Appellant it is relevant to point out the order passed by this High Court in W.A.No.1099 of 2009 and M.P.No.1 of 2009, holding that the appeal filed within 30 days from 12.08.2009 would be considered as appeal presented within time.
5. In the Government Order, it has been mentioned that the Government has considered the following factors before passing the order of attachment:
a) Complaints have been received from a number of depositors against A.S. Finance and Investments.
b) Government is satisfied that the said financial establishment is not likely to return the deposits to the depositors.
c) The properties already attached is not sufficient for repayment to the depositors.
d) The properties specified in the schedule are alleged to have been procured by the proprietor from and out of the deposits collectedfrom the depositors.
A perusal of the records reveals the following facts:
d-i) The property attached is situate at Gobichettipalyam Taluk, Nambiyur Village, in an extent of 2 Acres in R.S.No.33/2.
d-ii) This property has been sold to the Appellant for a sum of Rs.20,000/- on 11.09.2000 (as per the sale deed dated 11.09.2000)
d-iii) The complaint has been lodged by one Rajamani alleging that the deposit made by her which got matured on 17.11.2002 has not been repaid to her. The complaint is dated 15.01.2003. The amount said to have been deposited is Rs.19,500/-.
d-iv) In the order passed by the Government the property has been shown as property belonging to P.Arumugam (son of Pongali 132/1 Main Road, Nambiyur).
From the facts discussed and the order passed by the Government, it is evident that there is not even an averment that the properties specified in the schedule are alleged to have been purchased by the proprietor from and out of the deposits collectedfrom the depositors or that the Proprietor purchased the property malafide in the name of the appellant or the Proprietor transferred the property malafide in the name of the appellant or that the financial establishment has transferred any of the prop
