J U D G M E N T

The judgment and decree dated 28.10.2015 passed in O.A.No.84 of

2010 is under challenge in the present Civil Miscellaneous Appeal.

2. The Deputy Superintendent of Police, Economic Offences Wing-II filed an application under Section 8 of the TNPID Act for attachment of the property which was transferred with malafide intention so as to defeat the interest of the depositors.

3. The learned Additional Government Pleader made a submission that the Financial Establishment in question commenced their business in the year 2009 and they collected huge amount from the depositors and failed to return back the matured deposits as well as the interest. Thus, the Deputy Superintendent of Police received many complaints from the depositors and a criminal case was registered in Crime No.183 of 2010 dated 17.04.2010. The case was transferred to the Economic Offences Wing-II, Cuddalore on 04.05.2010. Further, another complaint was filed that was registered as Crime No.1 of 2010 on 08.05.2010. Accordingly, the case was numbered as C.C.No.04 of 2012. 168 depositors have deposited their hard-earned money. The amount defaulted by the Financial Company is about a sum of Rs.2,39,23,000/-.

4. The learned Additional Government Pleader reiterated that the transfer of immovable properties was done with malafide intention so as to defeat the provision of the TNPID Act and affecting the rights of the depositors to get refund of their deposits amount with interest. The subject property was purchased by the second accused on 10.09.2009 in Doc.No.3708 of 2009 for a sale consideration of Rs.25,00,000/-. Thereafter, the second accused appointed the 4th respondent as Power Agent on 27.11.2009 in Document No.2735 of 2009 dated 27.11.2009. The Power Agent sold the subject property in favour of Chelladurai/5th respondent and Murugan/6th respondent herein through Document No.2348 of 2010 dated 30.04.2010 for a sale consideration of Rs.25 lakhs. It is pertinent to note that the criminal case was registered on 17.04.2010 prior to the transfer of the subject property in favour of the respondent Nos.5 and 6 by the 4th respondent/Power Agent. Thus, the second accused was very much aware of the sale. The Power Agent/4th respondent executed the sale deed after registration of the criminal case. Thus, for all purposes, such a transfer is malafide transfer. Therefore, the Deputy Superintendent of Police filed an application under Section 8 of the TNPID Act for attachment of the property.

5. The respondents 5 and 6, knowing the fact that the property is going to be attached, suddenly sold the subject property in favour of the 7th respondent in Document No.6267 of 2010 dated 18.11.2010. The Deputy Superintendent of Police filed an application under Section 8 in August 2010 and the Government issued G.O.Ms.No.918 dated 30.12.2011 clearly mentioned that the application under Section 8 was pending before the Special Court. Thereafter, the 7th respondent executed the settlement deed in favour of the 8th respondent on 22.08.2012. All these accused/respondents colluded together and created several documents in order to defraud the depositors. Therefore, the appeal is to be allowed.

6. The respondents pleaded that the transactions are bonafide one and the respondents 5 and 6 were innocent purchasers. The property was sold to the 7th respondent who is an innocent purchaser. Thus, the attachment can be raised and the appellant could not able to establish that the transfer was a malafide transfer.

7. The Special Court adjudicated the issues with reference to the documents and evidence produced by the parties. The Special Court formed an opinion that the respondents 5 and 6 as well as the 7th respondent were bonafide purchasers and there was no malafide transfer, as far as the subject property is concerned. In this regard, the Special Court made a finding that as per the provisions of Section 8 of the TNPID Act, the transfer of property could be considered as malafide if it