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2014 Supreme(Mad) 4033
High Court of Judicature at Madras
R. SUBBIAH, J.
T. Kannappan Gurukkal @ Venkatasubramanian
Versus
K. Kannaian & Others
C.M.A. Nos. 2023, 2024, 2087 & 2088 of 2014 & M.P. Nos. 1, 1, 1 & 1 of 2014
Decided on: 11-11-2014
For the Appellant:S.V. Jayaraman, Senior Counsel for A.D. Jagadish Chandira, Advocate.
For the Respondents:R1, P. Rajamanickam, R4, S. Shahul Hameed, Advocates, R2 & R3, T. Jayaramraj, Government Advocate.
Headnote:
TANPID Act - Section 7(5) - Chit Fund Act - Sections 3 & 5 - Transfer of Property Act - Section 41 – Indian Penal Code - Sections 406, 409, 420, 120(B) – Civil Procedure Code - Order 7 - Rule 11(a) - Nature of security - Schemes by promising exorbitant rate of interest - Order of attachment in respect of some of properties - 1st respondent and appellant and others floated Chits and Investments Ltd Finance - 1st respondent is Managing Director and appellant and others are Directors of said financial firms - They have received number of deposits from public under various schemes by promising exorbitant rate of interest and thereby collected principal amount - Since they defaulted in repayment a complaint was preferred by one with 3rd respondent and on basis of said complaint a case in EOW II under Sections 406, 409, 420, 120(B) IPC and Section 5 of TANPID Act and Sections 3 & 5 of Chit Fund Act, was registered as against above said financial firms as well as directors of said firms for default in repayment of principle amount and interest - During course of investigation properties of accused Directors of said concerns were attached by Government Order Department and one more property was attached – Held, Issue of applicability of this Rule 7 order 11 CPC was considered by Hobble Supreme Court and it was observed that Court must give a meaningful reading to plaint and if it is manifestly vexatious or meritless and in sense of not disclosing a clear right to sue Court may exercise its power under Order 7 Rule 11 CPC - However Court has to take care that grounds mentioned therein must be fulfilled and while doing so Court does not have to decide legal issues – However in a case where validity of a particular document itself is under challenge same cannot be considered and decided - So long as Original Applications filed 1st respondent disclose some cause of action same cannot be rejected under Order VII Rule 11 of CPC - A reading of averments in Original Applications filed by 1st respondent it definitely discloses a cause of action for filing application – Therefore submissions made by learned counsel for appellant that forged documents were created by 1st respondent to claim ownership over subject properties cannot be a ground to reject Original Applications filed by 1st respondent - Court do not find any valid reason to reject Original Application filed by 1st respondent under Order VII Rule 11 of CPC - All issues involved and raised by appellant in this case are only disputed questions of fact which cannot be gone into at this stage and same can be decided only after hearing applications filed by 1st respondent by conducting enquiry - Appeals are dismissed
1. All these above four appeals have been filed challenging the fair and decreetal order passed by the learned Special Judge under the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act (in short TANPID Act), Chennai, dismissing the applications filed by the appellant T.Kannappan Gurukkal @ Venkatasubramanian under Order 7 Rule 11(a) of C.P.C. r/w Section 7(5) of the TANPID Act to reject the original applications filed by the 1st respondent K.Kannaian under Section 9 of the TANPID Act.
2. C.M.A.No.2023 of 2014 has been filed against the order passed in I.A.85 of 2013 in O.A.No.17 of 2012. C.M.A.No.2024 of 2014 has been filed against the order passed in I.A.No.84 of 2013 in O.A.No.16 of 2012. C.M.A.No.2087 of 2014 has been filed against the order passed in I.A.No.82 of 2013 in O.A.No.14 of 2012. C.M.A.No.2088 of 2014 has been filed against the order passed in I.A.No.83 of 2013 in O.A.No.15 of 2012.
3. Since the issues involved in all these appeals are one and the same, these appeals are disposed of by way of this common judgment.
4. The brief facts, which are necessary to decide the issues involved in these appeals, are as follows :
4(a) During the period from 1984 to 1989, the 1st respondent K.Kannaian and the appellant T.Kannappan Gurukkal @ Venkatasubramanian and others floated M/s.Suprabath Chits and Investments (P) Ltd, (Registered), M/s.Krishna Finance (Registered), M/s.K.B.Investments (unregistered) and M/s.Suprabath Investments (un-registered). The 1st respondent K.Kannaian is the Managing Director and the appellant T.Kannappan Gurukkal @ Venkatasubramaian and others are the Directors of the said financial firms. They have received number of deposits (money) from the public under various schemes by promising exorbitant rate of interest and thereby collected the principal amount of Rs.23,12,59,636/-. Since they defaulted in repayment, a complaint was preferred by one Thiru.N.Ramesh Babu @ Ramesh S/o.Narayanasamy with the 3rd respondent and on the basis of the said complaint, a case in EOW II Cr.No.03/2009 under Sections 406, 409, 420, 120(B) IPC and Section 5 of TANPID Act and Sections 3 & 5 of the Chit Fund Act, was registered on 29.09.2009 as against the above said financial firms as well as directors of the said firms, for default in repayment of the principle amount and interest. During the course of investigation, 32 properties of the accused/Directors of the said concerns were attached by the Government Order vide. G.O.Ms.No.215 Home (Police XIX) Department, dated 23.02.2010 and one more property was attached under G.O.Ms.No.529 of 2012 dated 13.07.2012. Thereafter, the Competent Authority/District Revenue Officer (2nd respondent) filed O.A.No.85/2010 to make the ad-interim attachment absolute, in respect of the properties relating to the G.O.Ms.No.215 of 2010 dated 23.02.2010, before the learned Special Judge under TANPID Act. While so, one of the accused in the case viz., 1st respondent Kannaian filed four applications in O.A.Nos.14 to 17 of 2012 under Section 9 of the TANPID Act before the learned Special Judge under TANPID Act, seeking to permit him to furnish security and to cancel the order of attachment in respect of some of the properties. The nature of security offered by the 1st respondent Kannaian in each of the above OAs are as follows:
1) In O.A.No.14 of 2012, he offered to deposit a sum of Rs.5.85 crores as security to cancel the ad-interim order of attachment with respect to Item No.32 in G.O.Ms.No.215, dated 23.02.2010, viz., a vacant land measuring to an extent of 9000 sq.ft, comprised in Survey No.95/8, 95/3, at Kannappa Nagar, Ist Main Road.
2) In O.A.No.15 of 2012, he offered to deposit a sum of Rs.5,67,20,000/- as a security to cancel the interim attachment in respect of the house sites bearing Plot Nos.42, 43 & 44 measuring to an extent of 8726 sq.ft described at Item Nos.13 & 14 in G.O.Ms.No.215, dated 23.02.2010.
3) In O.A.No.16 of 2012 he offered to
