The court ruled that depositors must file claims individually under the Act, as an association cannot represent them, ensuring protection of their interests.

ORAL ORDER

The petitioner is a welfare association registered under the Karnataka Societies Registration Act, 1960. Sri Lakshmikanth K, the learned counsel for the petitioner, submits that the petitioner’s members are those who have invested varied sums between Rs.1,000/- to Rs.5,00,000/- and the association in presenting this petition is espousing the cause of such members. The learned counsel submits that the petitioner on behalf of its members has filed, apart from initiating other proceedings, a representation with the respondent on 09.05.2024 but to no avail and therefore this Court must direct the respondent to consider the different representations.

2. It is seen from this representation that the petitioner has referred to variety of depositors/investors while making a request for issuance of public notice once again with necessary changes. Sri Veeresh Budhihal, the learned counsel for the respondent, submits that, as contemplated under Section 7 of the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 [for short, 'the Act'], publication is caused inviting claims by the depositors and that every claim filed within the time as contemplated under Section 7 [2] of the Act will be considered subject to orders of the competent Court. The learned counsel also submits that because of the Apex Court's orders all the matters relating to the subject financial establishments stand transferred to the Special Court at Paragana, West Bengal.

3. It cannot be gainsaid that the provisions of the Act is to protect the interest of the depositors and though these depositors can come under a banner as an Association, the claims must necessarily be filed as is contemplated under the provisions of the Act.

The Section 7 [2] of the Act stipulates that the "competent authority" shall issue notice either individually or by means of effective media publication, inviting claims by the depositors and to submit claims with proper proof to establish the same.

4. The Section 7 [3] stipulates that a claim upon notice under Section 7 [2] must be sent to the competent authority before the expiry of the period of one month. When queried in this regard, Sri Veeresh Budhihal submits that the Special Court, if sufficient cause is shown for the delay may allow claims to be filed beyond the time stipulated in Section 7 [3] of the Act but such claim application must be filed by the depositors themselves, along with necessary proof of the deposit.

5. This Court must opine that if the Act is designed to benefit the depositors with the competent authority processing all the requests for just decision by the Special Court, the petition must be disposed of observing that if any member of the petitioner has a claim but has not filed the claim, must be at liberty to make an application with the competent authority along with the proof of investment such as receipts and bank statements.