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2025 Supreme(Online)(Mad) 77943
IN THE HIGH COURT OF JUDICATURE AT MADRAS
N. SATHISH KUMAR, J
Mylapore Hindu Permanent Fund Investors And Depositors Welfare Association – Appellant
Versus
The State – Respondent
WP No. 35316 of 2024
For the Appellants/Petitioners: Mr. A.Ashwinkumar
For the Respondents: Mr. K.M.D. Muhilan, Mr. N.Manokaran, M/s. P.K. Vasuki, M/s. R. Mitesh, Mr. A. Muthu Kumar, Mr. R. Thirumoorthy
Writ petition for ad-interim attachment of properties under TNPID Act to protect depositors due to financial default by a mutual benefit society.
Headnote:(A) TNPID Act, 1997 - Section 3 - Writ of mandamus sought for ad-interim attachment of properties of a mutual benefit society due to default in payments to depositors. The petitioner reported that after assurances regarding deposits, the society defaulted on payments, leading to a police case. Court outlined the necessity for prompt government action against the identified properties for attachment to protect depositor interests. (Paras 1-12)
(B) Procedural requirements - Necessity for state action in compliance with criminal investigations on major financial defaults and ensuring the forensic audit of accounts to assess the extent of the fraud. Failure by authorities to act on representations and delay in securing assets serve to heighten the risk to depositors. (Paras 9-13)
| Table of Content |
|---|
| 1. request for attachment due to financial default. (Para 1 , 3 , 4) |
| 2. background of mutual benefit society's operations. (Para 2) |
| 3. grievances regarding insufficient property attachment. (Para 5 , 6) |
| 4. court's directions for action by respondents. (Para 7 , 8 , 9 , 10 , 11) |
| 5. outcome of writ petition with directives. (Para 12 , 13) |
ORDER
This writ petition has been filed seeking a direction to the first respondent to consider the representation of the petitioner dated 18.10.2025, requesting for ad interim attachment of the properties under Section 3 of TNPID Act 1997.
2. The 8th respondent, Nithi Limited, is a mutual benefit society established with the object of encouraging savings among its members and providing loans based on member deposits for over 150 years. In the year 2017, the 5th respondent assumed position of Managing Director, along with certain other members, including the 6th and 7th respondents, who had joined the management in 2015. They assured the depositors a high rate of interest, and relying on such assurances and the long standing name of the society, several depositors invested around a sum of Rs.600 Crores through various cumulative fixed deposit and recurring deposit schemes.
3. However, from February 2024, the company ceased giving interest and disbursing the matured payments on the deposited amounts. Consequently, the petitioner association members and depositors sought return of their matured invested principal and accrued interest from the respondents 5 to 7, for which they had also issued post dated cheques. When the same were presented for collection, they were returned as “insufficient funds”. Hence, a case in crime no.14 of 2024 has been registered by the Economic Offences Wing. Though the petitioner association had given a representation on 08.10.2024 to the first respondent under Section 3 of the TNPID Act,1997, seeking attachment of the properties of the Company and its directors, no action has been taken so far.
4. The grievance of the petitioner is that only a few properties have been attached, though they have identified 77 properties. However no action has been taken with respect to the remaining properties.
5. Pursuant to the same, earlier, this Court directed the second respondent to file a detailed report as to the nature of the action taken so far and whether adequate infrastructure has been provided to investigate such a large-scale of offence. The second respondent was also directed to identify all the immovable properties of the company and make necessary proposal to the Government for interim attachment of the said properties.
6. Today, a Status Report has been filed by one Mr.S.Seetharam, Deputy Superintendent of Police, Economic Offences Wing, Chennai.
7. I have heard both sides and perused the materials available on records carefully.
8. On perusal of the Status report, it is seen that out of 77 listed properties, proposal for 25 properties have been sent to the Government for approval. The list of attachment orders made has also been detailed in the said status report, which is extracted herein:-
1.“ Details of the properties in the list provided , in which proposal sent for Ad-Interim attachment on 22.08.2025-yet to be received order for attachment.
| N o S. | Document No. | Property Address and Location | Details of property owner | Extent | Guide Line Value Acre/sq. ft rate | Total | Remarks |
| 1 | 2034/2005 | Agricultural land in Kottuvakkam village (nallamur revenue village, madurantakkam taluk, Kanchipuram district in Sy No.8/4A part & present 8/4 A1 with extent of 3 acre 41 cents. SRO. Cheyyur | Devanathan Yadav | 3.41 Acre | 700100 per Acre | 2387341 | 2nd proposal sent on 22.08.2025 and yet to receive G.O. For ad-interim attachment. |
| 2 | 669/2018 | Agricultural land in s no.101/2A in koppur, marukkanchery village of thiruvallur taluk thiruvalur dis. of extent of 6A-75 cents. SRO Manavalanallur | Devanathan Yadav | 6.75 cent | 65000 per one cent | 4387500 0 | 2nd proposal sent on 22.08.2025 and yet to receive G.O. For ad-interim at |
