IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 09/07/2003
CORAM
THE HONOURABLE MR JUSTICE P.D. DINAKARAN
WRIT PETITION NO.18921 OF 2003
AND
W.P.M.P.NO.23682 of 2003
1. P. Kandasamy
2. P. Chenniappan
3. P. Sivakumar
4. Subburaya Gounder
5. Chellamuthu
6. Manoharan ... Petitioners
-Vs-
1. The Secretary to Government
Government of Tamil Nadu
Home (Courts II A) Department
Fort St. George
Chennai - 5.
2. The Inspector General of Police
Economic Offence Wing-II
Chennai.
3. The Competent Authority and
Additional Commissioner of
Land Administration
Chennai.
4. The District Registrar
Erode. ... Respondents
Petition under Article 226 of the Constitution of India praying for
the issuance of a Writ of Certiorari as stated therein.
For Petitioner : Mr. K. Sukumaran
For Respondents : Mr. M.S. Palanisamy, AGP.
:O R D E R
The petitioners have filed the writ petition praying for the issue of
a writ of Certiorari calling for the records relating to the proceedings in
G.O.Ms.No: 400 dated 13.5.2003 of the Secretary to Government of Tamil Nadu,
Home (Courts II-A) Department, Secretariat, Chennai and quash the same in so
far as the properties belonging to them.
2. It is the case of the petitioners that the they have purchased the
properties in their name and they do not stand in the name of the financial
establishment viz., M/s.Kannagi Finance Corporation or its subsidiaries, or
its members. There is material to show that the properties were purchased out
of the deposits collected from the depositors and that they are not even
partners or members of the Financial Establishment, nor they are connected in
any manner with the affairs of the financial establishment.
3. However, the second respondent initiated penal proceedings against
the said financial institution under the provisions of the Tamil Nadu
Protection of Interest of Depositors (in Financial Establishments) Act, 1997,
(hereinafter referred to as the ‘Act’), pursuant to which the first respondent
issued G.O.Ms.No.400, dated 13.5.2003 for interim attachment of the properties
of the petitioners invoking Section 3 of the Act. Hence, the above writ
petition.
4.1. The Act is intended to protect the deposits made by the public
in the financial establishments and the matters thereto.
4.2. The scheme of the Act provides for confirmation of the order of
attachment by the Special Court constituted under Section 6 of the Act.
4.3. Section 7(1) of the Act provides a notice to be served on the
financial establishment or to any other person whose property is attached
under Section 3 of the Act to show cause why the order of attachment should
not be made absolute.
4.4. Section 7(3) of the Act provides that any person claiming
interest in the property attached or any portion thereof may, notwithstanding
that no notice has been served upon him under Section 7(1) of the Act, make an
objection before the order is passed for making an order of attachment
absolute under Section 7(4) of the Act.
4.5. Section 7(6) of the Act enables the Special Court, after
investigation under sub-Section (5) to Section 7 of the Act, either to make
interim order of attachment absolute or varying it by releasing a portion of
the property from the attachment or cancelling the ad interim order of
attachment, provided that the Special Court shall not release from attachment
any interest which it is satisfied that the financial establishment or the
person referred to in Sub section (1).
4.6. Any person aggrieved by an order of the Special Court may appeal
to the High Court within thirty days from the date of the order, under Section
11 of the Act.
4.7. The scheme of the Act provides built in provisions for any
interested person whose property is complained to have been attached to seek
appropriate relief either before the Special Court or thereafter to prove his
case during the investigation under Section 7(5) of the Act and thereafter,
even to prefer an appeal as provided under Section 11 of the Act.
5. The grievance of the petitioners is that under the guise of
criminal prosecution initiated against the said financial institutions, viz.
M/s.Kannagi Finance Corporation, Kannagi Investment Corporation, Kannagi
Financiers, Kannagi Investment, Kannagi Motor Finance, Kannagi Motor Finance
Corporation, for the alleged contravention of the provisions of the Act read
with Sections 409 and 420, IPC, the first respondent has issued the G.O,
impugned for attaching the properties of the petitioners which is arbitrary
and illegal.
6. But, I do not see any arbitrary or illegal exercise of powers by
the respondents in attaching the properties of the said Financial Institutions
while issuing G.O. No.400 dated 13.5.2003 and proceeding therewith as per the
provisions of the Act, inasmuch as the properties attached are owned by the
said financial institutions.
7. However, if the properties attached under the said G.O. is owned
by the petitioners, they are at liberty to approach the Special Court under
Section 7(3) of the Act and to seek either to vary or to cancel the interim
order of attachment. If they are still aggrieved by any order of the Special
Court, an appeal would lie under Section 11 of the Act. Therefore, it may not
be proper for this Court to entertain this writ petition and to grant the
relief as prayed for. Hence, the writ petition is dismissed. No costs.
Consequently, WPMP No.21275 of 2003 is also dismissed.
Index : Yes
Internet: Yes
kb
To
1. The Secretary to Government
Government of Tamil Nadu
Home (Courts II A) Department
Fort St. George
Chennai – 5.
2. The Inspector General of Police
Economic Offence Wing-II
Chennai.
3. The Competent Authority and
Additional Commissioner of
Land Administration
Chennai.
4. The District Registrar
Erode.