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2011 Supreme(Mad) 4288
High Court Of Madras
V.Dhanapalan J.
K.Veerasamy - Appellant
Versus
Secretary To Government, Home (Police-Xix) Department, Fort St.George, Chennai – Respondent
W.P.NO.2402 OF 2008 and M.P.Nos.1 to 3 of 2008
Decided On : Oct 21,2011
Kalyanasundaram, A.F.Diniz, L.P.Shanmughasundaram
Headnote:TAMILNADU PROTECTION OF INTEREST OF DEPOSITORS IN FINANCIAL ESTABLISHMENT ACT, 1997 - SECTION 3 - One depositor lodged a complaint against the petitioner and other alleging that after having collected the deposits petitioner’s institution failed to return - Aggrieved by same, petitioner moved court and got interim stay of proceedings - First respondent/Home Secretary invoking Section 3 of Act ordered interim attachment of properties of partnership firm and transferring control over said property to second respondent - Writ Petition against order - Held, It is to be noticed that once the property is ordered to be attached, it shall remain under attachment till an appropriate order is passed consequently. The main purpose for ordering attachment by invoking Section 4(3) of the Act is for the purpose of discharge of the liability of the notified person who defaulted to pay the money to the depositors. So long as the claims or other proceedings initiated before the Special Court in order to safeguard the interests of the innocent depositors for discharge of liability of the notified person continue, the attachment remains in force and therefore, such proceedings before the Special Court are extraordinary in nature. Once there is statutory attachment of the property, the court is duty-bound to make it absolute for the purposes of distribution. There can be no period of limitation for the acts which a court is bound to perform - The point of delay of 1249 days in initiating the proceedings raised by the petitioner has been disputed by the respondents, stating that subsequent to the order passed by the first respondent in G.O.Ms.No.1469, dated 17.10.2007, the District Revenue Officer has directed the Tahsildar, Palani to attach the properties of the petitioner and accordingly, on 21.1.2008, Tahsildar issued the impugned notice regarding taking over of possession of the properties and therefore, there was a delay of only 94 days in between the above two proceedings - Looked at from any angle, it can be seen that the competent authority has examined the Inspector of Police and recorded his statement and collected necessary documents from the concerned authorities before making an application to the Special Court seeking to make the interim order of attachment absolute. Therefore, the competent authority has explained the reasons for the delay that has occasioned on account of the enquiry and collection of relevant documents before embarking upon to file an application under Section 4(3) of the TNPID Act. Therefore, in the light of the above stated circumstances, which prevailed for filing such an application, it can be construed that the competent authority has satisfactorily moved the Special Court for making the interim order of attachment absolute in order to achieve the object contemplated under the Act. (Paras 19, 20 & 21).
Result : Writ Petition dismissed.
( 1. ) THE petitioner has challenged the proceedings of the first respondent passed under Section 3 of the TNPID Act, 1997 in G.O.Ms.No.1469-Home Police-XIX, dated 17.10.2007 as well as the consequential proceedings of the Tahsildar, Palani, dated 21.01.2008 in Na.Ka.No.30247/07 in and by which, interim order of attachment was passed under Section 3 of the Tamil Nadu Protection of Interest of Depositors in Financial Establishment Act, 1997 (hereinafter referred to as 'TNPID Act') attaching the properties of the petitioner and others and possession of the said properties was taken over.
( 2. ) THE brief facts, necessary for disposal of the writ petition, can be stated as under:
2.1. THE petitioner along with his mother and friends, Thangaraj and Kanakaraj, started a partnership concern in the name and style, 'Sri Kandiamman Finance' at Coimbatore. THE business of the said financial establishment is, to receive money from the public and lend the same to the public for interest and earning a profit for the establishment. According to the petitioner, after establishment of the institution, they collected deposits from the public and paid interest upto 11 lakhs. While so, one B.Indrani, one of the depositors, lodged a complaint on 4.11.2004 against the petitioner and others before the Inspector of Police, Economic Offences-II/5th respondent herein, alleging that after having collected the deposits from her, the petitioner's institution had failed to return the same on maturity. After completion of the investigation, final report has been filed and it was taken on file as C.C.No.24 of 2005 by the Special Court for TNPID Act and the same is pending. Aggrieved by the same, the petitioner moved this Court by filing Crl.O.P.No.6690 of 2010 for quashing the criminal proceedings pending in C.C.No.24 of 2005 on the file of the Special Court for TNPID Act. By order, 3.7.2010, this Court granted interim stay of the proceedings. 2.2. Be that as it may, based on the above criminal case, the first respondent, invoking Section 3 of TNPID Act, 1997, passed Government Order in G.O.Ms.No.1469, Home (Police-XIX) Department, dated 17.10.2007 ordering interim attachment of the properties of the partnership firm and transferring the control over the said properties to the second respondent. Pursuant to the said G.O., the second respondent instructed the 3rd and 4th respondents to take possession of the properties.
THEreafter, the 4th respondent issued notice in Na.Ka.No.30247/2007, dated 21.1.2008, taking possession of the properties of the petitioner and others. Aggrieved by the same, the petitioner has come forward with the present writ petition.
( 3. ) THE respondents have filed a counter affidavit, inter alia, stating that on 4.11.2004, one Tmt.P.Indrani, W/o Bhaskaran, gave a complaint to the 5th respondent, alleging that a sum of Rs.16,00,000/- deposited in the names of her daughter and husband, was not repaid by the petitioner. Based on the said complaint, the 5th respondent registered a case in Crime No.9 of 2004 under Section 5 of TNPID Act.
3.1. According to the respondents, during the investigation, it was found that the partners of the defaulted financial establishment, had received a sum of Rs.25,30,000/- as deposits from the public and with accrued interest, they are liable to pay a total sum of Rs.38,57,700/-. After receipt of the deposits, in the year 2002, the said financial establishment was closed without repaying the deposited amounts to the depositors. THEreafter, the 5th respondent filed a charge sheet before the Special Court for TNPID Act, Chennai, which was taken on file as C.C.No.24 of 2005. THE concerned Investigating Officer identified the properties owned by the partners of the said defaulted financial establishment and sent proposals to the Government through the Inspector General of Police, Economic Offences Wing II, Chennai for issuing orders of ad-interim attachment of the said properties. On receipt of the said
