{"id":131541,"date":"2017-05-17T13:37:25","date_gmt":"2017-05-17T08:07:25","guid":{"rendered":"http:\/\/www.scconline.com\/blog\/?p=131541"},"modified":"2017-05-24T12:10:27","modified_gmt":"2017-05-24T06:40:27","slug":"properties-of-financial-establishments-can-be-attached-in-order-to-protect-the-interest-of-investors","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2017\/05\/17\/properties-of-financial-establishments-can-be-attached-in-order-to-protect-the-interest-of-investors\/","title":{"rendered":"Properties of Financial Establishments can be attached in order to protect the interest of investors"},"content":{"rendered":"

Supreme Court<\/strong>: Explaining the scope of the power of the State of Tamil Nadu to attach the immovable property of Financial Establishments under Section 3 of the Tamil Nadu Protection of Interests of Depositors (In Financial Establishments) Act, 1997, the Court said that the Act was enacted in order to curb the malady of financial swindlers and to protect the interest of innocent investors. Therefore, as per the procedure envisaged under Section 3 and 4 of the Act unequivocally the power to set the process into motion vests with the State Government by passing an ad-interim attachment order and thereafter act mandates appointment of competent authority under Sub-section (1) of Section 4 of the Act, to take further recourse as per the procedures laid down under Section 4 of the Act.<\/p>\n

The Court was hearing the appeal against the order of Madras High Court setting aside the ad-interim order attaching the immovable properties of the partners of Financial Establishment, Global Capital Trading Services. Rejecting the contention of the Financial Establishment that before passing an order under section 3 of the act government has to take steps under section 4 of the act by identifying the properties, the bench of N.V. Ramana and P.C. Pant, JJ said that the High Court erred in accepting the said contention as the language employed under section 3 and 4 of the act is plain, unambiguous and it does not call for any interpretation as sort to be placed the respondents.<\/p>\n

It was explained that while enacting the provisions the legislature has consciously given the discretion for passing an ad-interim order. it is evident from the language used in the section by inserting \u201cGovernment may\u201d. In the case on hand even before the other provisions are complied with the High Court erroneously interfered with the ad-interim order which defeats the very purpose of the provision which is incorporated to safeguard the interest of the investors. Hence, the order passed by the State Government under Section 3 of the Act attaching the immovable properties standing in the name of respondents, basing on the complaint of investors and directing the competent authority to take recourse as per the procedures contemplated under Sub-section (3) and (4) of Section 4 of the Act is valid and is very much in consonance with the provisions of the Act. [State v. K.S. Palanichamy, 2017 SCC OnLine SC 586<\/a>, decided on 09.05.2017]<\/p>\n","protected":false},"excerpt":{"rendered":"

Supreme Court: Explaining the scope of the power of the State of Tamil Nadu to attach the immovable property of Financial Establishments <\/p>\n","protected":false},"author":121,"featured_media":154914,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,9],"tags":[13851,2526,17571],"class_list":["post-131541","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-supremecourt","tag-attachment-of-property","tag-Interpretation","tag-tamil-nadu-protection-of-interests-of-depositors-in-financial-establishments-act-1997"],"yoast_head":"\nProperties of Financial Establishments can be attached in order to protect the interest of investors | SCC Times<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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