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IN THE HIGH COURT OF JUDICATURE AT MADRAS
S.M. SUBRAMANIAM, J.
V.K. Subramaniam (died) & Others – Appellant
Versus
The Inspector of Police, EOW-II, Erode & Others – Respondent
C.M.A. No. 2817 of 2017 & C.M.P. No. 16118 of 2017
Decided On : 29-03-2021
Tamil Nadu Protection of Interests of Depositors (In Financial Establishments) Act, 1997 – Sections 3, 8, 11 – Land Issue – Attachment of Land – Fair and decretal order passed by Special Judge, Special Court under TNPID Act Cases, in O.S., is under challenge in the present Civil Miscellaneous Appeal – Counsel for appellants made a submission that first appellant is innocent purchaser of property and he is no way connected with finance company nor accused in criminal case – Purchase of property by first appellant is to be protected – When first appellant is bona fide innocent purchaser, sale cannot be interfered with as he is unconnected with the affairs of Financial Company – Counsel for appellants reiterated that Special Court has committed an error in granting permission for attachment without considering the fact that first appellant is a third party purchaser and property was purchased without knowing fact about criminal case and collection of deposit amount from depositors –
Finding of the Court:
Court record its displeasure in the manner in which the criminal investigations are conducted, as the case is pending for the past 8 years without much harness – Competent Authorities/Investigating Agencies are bound to expedite the investigation and file a Final Report, enabling the Special Court to proceed with the trial in the manner known to law – Going on filing Interlocutory Applications and prolonging the main case, is certainly not appreciable and the Competent Authorities/Investigating Agencies are responsible and accountable for long delay in disposal of such cases, wherein the interest of the innocent depositors are prejudiced. – Very purpose and the object of the Act is to be looked into and in the event of long delay, spirit of the provisions are not only defeated, but the depositors will lose confidence in respect of the trial to be conducted in the manner known to law. – In such cases where large number of innocent depositors are involved, then the Competent Authorities/Investigating Agencies are expected to show sensitiveness and ensure that such investigations are completed in a time bound manner and the case is disposed of, so as to reach its finality – Competent Authorities/Investigating Agencies are required to expedite the investigation, enabling the Special Court to dispose of the case as expeditiously as possible. – Special Court is also expected to conduct the trial in a speedy manner in the interest of the public at large and ensure that the cases are disposed of as quickly as possible to develop confidence in the minds of the public at large, more specifically, in the matters of cheating the public by way of collecting huge money from the depositors. – Fair and decretal order made in O.A. on the file of the Court of the Special Judge, Special Court under TNPID Act Cases, Coimbatore stands confirmed –
Result: CMA Dismissed
JUDGMENT :-
(Prayer: Civil Miscellaneous Appeal is filed under Section 11 of the Tamil Nadu Protection of Interests of Depositors (In Financial Establishments) Act, 1997 against the fair and decretal order made in O.A.No.29 of 2013 dated 21.07.2017 on the file of the Court of the Special Judge, Special Court under TNPID Act Cases, Coimbatore.)
1. The fair and decretal order dated 21.07.2017 passed by the learned Special Judge, Special Court under TNPID Act Cases, Coimbatore in O.S.No.29 of 2013, is under challenge in the present Civil Miscellaneous Appeal.
2. Learned counsel for the appellants made a submission that the first appellant is the innocent purchaser of the property and he is no way connected with the finance company nor accused in the criminal case. Therefore, purchase of property by the first appellant is to be protected. When the first appellant is the bona fide innocent purchaser, the sale cannot be interfered with as he is unconnected with the affairs of the Financial Company.
3. Learned counsel for the appellants reiterated that the Special Court has committed an error in granting permission for attachment without considering the fact that the first appellant is a third party purchaser and the property was purchased without knowing the fact about the criminal case and the collection of deposit amount from the depositors.
4. The Special Court failed to appreciate the fact that the guideline value cannot be taken into account and render a finding with regard to the transactions inter se parties and the same is to be decided only on the basis of the market value of the supporting material. The first appellant questioned the findings of the Trial Court with regard to the undervaluation of the instrument presented by the first appellant before the Sub Registrar.
5. At the outset, it is contended that the findings in an entirety made in this regard by the Special Court is perverse and not in consonance with the principles of law.
6. Learned Additional Government Pleader, appearing on behalf of the first respondent, disputed the said contentions by stating that the first appellant is not a bona fide third party purchaser and the property was sold by presenting a document, which was undervalued and the same itself was executed with a mala fide intention to defeat the interest of the depositors and thus the Special Court has rightly granted permission under Section 8 of The Tamil Nadu Protection of Interests of Depositors (In Financial Establishments) Act, 1997 (hereinafter referred to as ‘TNPID Act’ in short) to the Competent Authority to attach the property and further proceed with the sale.
7. It is contended that 1,164 innocent depositors deposited their hard earned money in the Financial Company to the tune of Rs.16,20,36,625/-. Criminal cases were registered in Crime Nos.7 and 18 of 2012 and the subject sale transactions were done in the same year when the crime was registered.
8. It is further contended that just before the registration of crime, the alleged sale was executed in faovur of the first appellant by the accused persons in the criminal case, who were running a Finance Company. Thus, the sale was done in a calculated manner with an intention to defeat the interest of the depositors and thus, the Competent Authority filed the application under Section 8 of the TNPID Act, seeking for attachment of the property.
9. In view of the fact that the Special Court, in clear terms, held that the sale was executed in order to defeat the interest of the depositors and not in good faith, there is no reason to interfere with the findings of the Special Court and the Civil Miscellaneous Appeal is to be dismissed.
10. Section 3 (ii) of the TNPID Act, enumerates that “where the Government have reason to believe that any financial establishment is acting in a calculated manner with an intention to defraud the depositors, then the Government is empowered to attach the property”.
11. In the present case, the Government has not issued
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