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2023 Supreme(Mad) 685
HIGH COURT OF JUDICATURE AT MADRAS
S.M. SUBRAMANIAM, J.
R. Subramanian - Appellant
Versus
The Reserve Bank of India, Chennai & Others - Respondents
WP No. 14577 of 1999 & WPMP Nos. 42 of 2013 & 2718 of 2023
Decided On : 24-03-2023
For the Petitioner:M.A. Abdul Wahab, Advocate. For the Respondents:R1, Sathiya Narayanan, Advocate, R2 to R4, J. Madana Gopal Rao, Senior Panel Counsel, R5, R. Bharath Kumar, R6 to R12 & R14 to R17, No Appearance, R13, M. Meena Rukmani, R21, Ranga Rajan, R27, S. Sethu Raman, R33, A. Uma Sankar, Advocates, R18 to R20, R22 to R26, R28 to R32 & R34, Not Ready in Notice.
Competent Authorities under the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997 should be allowed to administer sick financial institutions, and the High Court-appointed administrators may not be suitable for such tasks.
Headnote:
Writ Petition - Appointment of Custodian for Financial Establishment - The court directed the Competent Authority under the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997 to appoint a District Revenue Officer to take immediate control and possession of the assets and properties of the financial establishment and settle the dues to the depositors.
Fact of the Case:
The petitioner, a depositor in the Alwarpet Benefit Fund Ltd., sought the appointment of a fit and proper person as Custodian or Special Officer to take control of the assets and properties of the financial establishment and pay the depositors their original dues.
Finding of the Court:
The court found that the High Court-appointed administrators were unable to run the financial establishment satisfactorily and that the Competent Authorities of the Government under the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997 should be allowed to administer such sick institutions.
Issues: The issues involved the appointment of a Custodian or Special Officer for the financial establishment and the inability of High Court-appointed administrators to manage the affairs of the establishment effectively.
Ratio Decidendi: The court decided that the Competent Authority under the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997 should take charge of the financial establishment and initiate necessary actions to settle the dues to the depositors and other dues, if any.
Final Decision: The court directed the District Revenue Officer, Chennai District, to take immediate charge of the financial establishment and its assets and liabilities, and to initiate all necessary actions under the provisions of the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997.
JUDGMENT
(Prayer: Writ Petition filed under Article 226 of the Constitution of India for issuance of a Writ of Mandamus, directing the first respondent to appoint a fit and proper person as custodian or Special Officer for taking immediate control and possession of all the assets and properties both movables and immovables and securities and pay the depositors their original due.)
1. The relief sought for in the present writ petition is to direct first respondent to appoint a fit and proper person as Custodian or Special Officer for taking immediate control and possession of all the assets and properties both movables and immovables and securities and pay the depositors their original dues.
2. The petitioner is one of the depositor in the fifth respondent-M/s.Alwarpet Benefit Fund Ltd. Since the fifth respondent-Alwarpet Benefit Fund Ltd., committed default in repayment of deposit amount, the depositors filed criminal complaint, which was registered and is pending as of now.
3. The investigation is now pending on the Economic Offences Wing of the Police Department.
4. The present writ petition is filed seeking a direction to appoint a fit and proper person as Custodian or Special Officer for taking immediate control and possession of all the assets and properties both movables and immovables and securities and pay the depositors their original dues.
5. The writ petition was filed in the year 1999 and it is pending for the past 23 years. Three retired Hon''ble Judges of this Court one after the another were administering the affairs of M/s.Alwarpet Benefit Fund Ltd. After the death of those retired Hon''ble Judges of this Court, at present, the Manager of the M/s.Alwarpet Benefit Fund Ltd., is looking after the administrative affairs. The last Administrator, who was a Retired Official from the TNSC Bank, also died on 04.11.2022. Thereafter, the Manager of M/s.Alwarpet Benefit Fund Ltd., has taken charge of the administration.
6. The learned counsel for the petitioner appointed by the Court made a submission that 25% of the dues to the depositors are yet to be settled. Properties are available, which all are to be dealt with. Now Alwarpet Benefit Fund Ltd., is falling within the ambit of the provisions of the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act), 1997.
7. The practice of appointing Administrator of Financial Establishments by the High Court may not be appropriate in view of the fact that an Expertise in financial business is required. Hon''ble Judges are not Experts in the field of Financial Establishments and the Government has to take over such Establishments and appoint the Competent Authorities to deal with the affairs of such Financial Establishments falling sick. More-so, the High Court cannot monitor the progress through Administrators appointed by the High Court for longer time and it is not preferable also.
8. In the present case, the Three Hon''ble Judges appointed were died one after another and still M/s.Alwarpet Benefit Fund Ltd., is unable to repay the amount due to the depositors. The experience have shown that High Court appointed Administrators are unable to run the Financial Establishments to the satisfaction of the creditors and the members.
9. The present writ petition is pending for the past about 23 years. The High Court cannot monitor the day-today affairs of such Financial Establishments by keeping the writ petition pending for several years. Thus, this Court is of the considered opinion that the Competent Authorities of the Government under the Statute must be allowed to administer such Sick Institutions in the manner contemplated. It would be easy for the Courts to fix the responsibility and accountability of such Governmental Authorities in the matter of dealing with the members and the aggrieved depositors of M/s.Alwarpet Benefit Fund Limited.
10. Considering the fact that no Administrator as of now is functioning to look after the affairs of the fifth respondent-Al
