IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE: 21-10-2011 CORAM: THE HON'BLE MR.JUSTICE V.DHANAPALAN W.P.NO.2402 OF 2008 and M.P.Nos.1 to 3 of 2008 K.Veerasamy .. Petitioner Versus 1. The Secretary to Government, Home (Police-XIX) Department, Fort St.George, Chennai-600 009. 2. The Competent Authority and District Revenue Officer, Office of the District Collector, Coimbatore. 3. The Competent Authority and District Revenue Officer, Office of the District Collector, Dindigul. 4. The Revenue Divisional Officer, Office of the RDO, Palani. 5. The Inspector of Police, Economic Offences-II, Coimbatore. .. Respondents This Writ Petition is filed under Article 226 of the Constitution of India, praying for the issuance of Writ of Certiorari, to call for the records of the first respondent relating to its order passed under Section 3 of the TNPID Act, 1997 in G.O.Ms.No.1469-Home Police- XIX, dated 17.10.2007 and quash the said G.O. together with the consequential order of Tahsildar, Palani, dated 21.01.2008 in Na.Ka.No.30247/07 (for taking possession of the attached properties). [Prayer amended as per order of court dated 6.6.11] https://hcservices.ecourts.gov.in/hcservices/ For Petitioner: Mr.Kalyanasundaram, SC for Mr.A.F.Denny For Respondent: Mr.L.P.Shanmugasundaram, AGP O R D E R The petitioner has challenged the proceedings of the first respondent passed under Section 3 of the TNPID Act, 1997 in G.O.Ms.No.1469-Home Police-XIX, dated 17.10.2007 as well as the consequential proceedings of the Tahsildar, Palani, dated 21.01.2008 in Na.Ka.No.30247/07 in and by which, interim order of attachment was passed under Section 3 of the Tamil Nadu Protection of Interest of Depositors in Financial Establishment Act, 1997 (hereinafter referred to as 'TNPID Act') attaching the properties of the petitioner and others and possession of the said properties was taken over. 2. The brief facts, necessary for disposal of the writ petition, can be stated as under: 2.1. The petitioner along with his mother and friends, Thangaraj and Kanakaraj, started a partnership concern in the name and style, 'Sri Kandiamman Finance' at Coimbatore. The business of the said financial establishment is, to receive money from the public and lend the same to the public for interest and earning a profit for the establishment. According to the petitioner, after establishment of the institution, they collected deposits from the public and paid interest upto 11 lakhs. While so, one B.Indrani, one of the depositors, lodged a complaint on 4.11.2004 against the petitioner and others before the Inspector of Police, Economic Offences-II/5th respondent herein, alleging that after having collected the deposits from her, the petitioner's institution had failed to return the same on maturity. After completion of the investigation, final report has been filed and it was taken on file as C.C.No.24 of 2005 by the Special Court for TNPID Act and the same is pending. Aggrieved by the same, the petitioner moved this Court by filing Crl.O.P.No.6690 of 2010 for quashing the criminal proceedings pending in C.C.No.24 of 2005 on the file of the Special Court for TNPID Act. By order, 3.7.2010, this Court granted interim stay of the proceedings. 2.2. Be that as it may, based on the above criminal case, the first respondent, invoking Section 3 of TNPID Act, 1997, passed Government Order in G.O.Ms.No.1469, Home (Police-XIX) Department, dated 17.10.2007 ordering interim attachment of the properties of the partnership firm and transferring the control over the said properties to the second respondent. Pursuant to the said G.O., the second respondent instructed the 3rd and 4th respondents to take possession of the properties. Thereafter, the 4th respondent issued https://hcservices.ecourts.gov.in/hcservices/ notice in Na.Ka.No.30247/2007, dated 21.1.2008, taking possession of the properties of the petitioner and others. Aggrieved by the same, the petitioner has come forward with the present writ petition. 3. The respondents have filed a counter affidavit, inter alia, stating that on 4.11.2004, one Tmt.P.Indrani, W/o Bhaskaran, gave a complaint to the 5th respondent, alleging that a sum of Rs.16,00,000/- deposited in the names of her daughter and husband, was not repaid by the petitioner. Based on the said complaint, the 5th respondent registered a case in Crime No.9 of 2004 under Section 5 of TNPID Act. 3.1. According to the respondents, during the investigation, it was found that the partners of the defaulted financial establishment, had received a sum of Rs.25,30,000/- as deposits from the public and with accrued interest, they are liable to pay a total sum of Rs.38,57,700/-. After receipt of the deposits, in the year 2002, the said financial establishment was closed without repaying the deposited amounts to the depositors. Thereafter, the 5th respondent filed a charge sheet before the Special Court for TNPID Act, Chennai, which was taken on file as C.C.No.24 of 2005. The concerned Investigating Officer identified the properties owned by the partners of the said defaulted financial establishment and sent proposals to the Government through the Inspector General of Police, Economic Offences Wing II, Chennai for issuing orders of ad-interim attachment of the said properties. On receipt of the said proposals, the Government being satisfied that the financial establishment of the petitioner and others is not likely to return the deposits to the depositors, ordered attachment of the properties under Section 3 of TNPID Act by issuing G.O.Ms.No.1469 Home (Police XIX) Department, dated 17.10.2007 and directed the competent authority and District Revenue Officer, Coimbatore, to pursue further action in accordance with the procedure laid down under Sub Sections (3) and (4) of Section 4 of the TNPID Act, 1997. Pursuant to the said G.O., the third respondent had delegated the power to Revenue Divisional Officer, Palani and Tahsildar, Palani vide his letter No.13752/07/A5, dated 8.1.2008. In order to take possession of the properties of the defaulters, the Tahsildar, Palani issued notice dated 21.1.2008 to the defaulters. The petitioner and his mother Padmavathi had refused to receive the notice. The properties were identified by the Inspector of Police, Economic Offences Wing II on 24.1.2008 and taken possession by the Tahsildar, Palani. 3.2. It is stated that the petitioner along with other partners had collected deposits from the poor general public alluring them with high rate of interest and at the time of maturity, they cheated and deceived the poor depositors without repaying their amounts. In such circumstances, the impugned proceedings have been initiated to safeguard the depositors. Therefore, the writ petition is not maintainable and is liable to be dismissed. https://hcservices.ecourts.gov.in/hcservices/ 4. The learned Senior Counsel appearing for the petitioner would strenuously contend that the respondents 2 to 4 are not empowered directly to enforce the order of attachment passed by the first respondent, without complying with the mandatory provisions contained under Sections 4 and 7 of the TNPID Act, 1997. He would further contend that after passing the order under Section 3 of the TNPID Act in G.O.Ms.No.1469, dated 17.10.2007 ordering interim attachment of the properties of the petitioner and others, the concerned competent authority has to necessarily file an application for making the ad interim attachment absolute within 30 days from the date of receipt of Section 3 attachment order. However, in the present case, the second respondent has not filed any such application within the stipulated time and there was an unexplained delay of more than three years in not filing the said application. Therefore, the impugned consequential proceedings of the respondents 2 to 4 taking possession of the attached properties of the petitioner are liable to be quashed. In support of his submissions, the learned Senior Counsel relied on the following decisions, viz., (a) AIR 2004 Supreme Court 3068 (Gopal Sardar versus Karuna Sardar), wherein, the Hon'ble Supreme Court has held as under in para 9 and 10: "9. An important departure is made in Section 29 sub-section (2) of the Limitation Act of 1963. Under the Indian Limitation Act, 1908 Section 29 (2)(b) provided that for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law the application of Section 5 of the Limitation Act was specifically and in clear terms excluded, but under Section 29(2) of the present Limitation Act, Section 5 shall apply in case of special or local law to the extent to which it is not expressly excluded by such special or local law. In other words, application of Section 5 of the Limitation Act stands excluded only when it is expressly excluded by the special or local law. The emphasis of the argument by the learned counsel, who argued for the proposition that Section 5 of the Limitation Act is applicable to an application made for enforcement of rights of pre-emption under Section 8 of the Act was on the ground that the Act has not expressly excluded the application of Section 5 of the Limitation Act. 10. In Hukumdev Narain Yadav v. Lalit Narain Mishra5 a Bench of three learned Judges of this Court, dealing with election petition under the Representation of the People Act on the point of https://hcservices.ecourts.gov.in/hcservices/ limitation for filing an election petition, after examining the provisions of the Representation of the People Act and Section 29(2) of the Limitation Act, has held thus: (SCC pp. 146-47, para 17) “17. ... Even assuming that where a period of limitation has not been fixed for election petitions in the Schedule to the Limitation Act which is different from that fixed under Section 81 of the Act, Section 29(2) would be attracted, and what we have to determine is whether the provisions of this section are expressly excluded in the case of an election petition. It is contended before us that the words ‘expressly excluded’ would mean that there must be an express reference made in the special or local law to the specific provisions of the Limitation Act of which the operation is to be excluded. As usual the meaning given in the dictionary has been relied upon, but what we have to see is whether the scheme of the special law, that is, in this case the Act, and the nature of the remedy provided therein are such that the legislature intended it to be a complete code by itself which alone should govern the several matters provided by it. If on an examination of the relevant provisions it is clear that the provisions of the Limitation Act are necessarily excluded, then the benefits conferred therein cannot be called in aid to supplement the provisions of the Act. In our view, even in a case where the special law does not exclude the provisions of Sections 4 to 24 of the Limitation Act by an express reference, it would nonetheless be open to the court to examine whether and to what extent the nature of those provisions or the nature of the subject- matter and scheme of the special law exclude their operation. The provisions of Section 3 of the Limitation Act that a suit instituted, appeal preferred and application made after the prescribed period shall be dismissed are provided for in Section 86 of the Act which gives a peremptory command that the High Court https://hcservices.ecourts.gov.in/hcservices/ shall dismiss an election petition which does not comply with the provisions of Sections 81, 82 or 117.” (b) 2009(5) SCC 791 (Commissioner of Customs and Central Excise versus Hongo India Private Limited and another), wherein, the Hon'ble Supreme Court in paras 34 to 37 as under: "34. Though, an argument was raised based on Section 29 of the Limitation Act, even assuming that Section 29(2) would be attracted, what we have to determine is whether the provisions of this section are expressly excluded in the case of reference to the High Court. 35. It was contended before us that the words “expressly excluded” would mean that there must be an express reference made in the special or local law to the specific provisions of the Limitation Act of which the operation is to be excluded. In this regard, we have to see the scheme of the special law which here in this case is the Central Excise Act. The nature of the remedy provided therein is such that the legislature intended it to be a complete code by itself which alone should govern the several matters provided by it. If, on an examination of the relevant provisions, it is clear that the provisions of the Limitation Act are necessarily excluded, then the benefits conferred therein cannot be called in aid to supplement the provisions of the Act. In our considered view, that even in a case where the special law does not exclude the provisions of Sections 4 to 24 of the Limitation Act by an express reference, it would nonetheless be open to the court to examine whether and to what extent, the nature of those provisions or the nature of the subject-matter and scheme of the special law exclude their operation. In other words, the applicability of the provisions of the Limitation Act, therefore, is to be judged not from the terms of the Limitation Act but by the provisions of the Central Excise Act relating to filing of reference application to the High Court. 36. The scheme of the Central Excise Act, 1944 supports the conclusion that the time-limit prescribed under Section 35-H(1) to make a reference to the High Court is absolute and unextendable by a court under Section 5 of the Limitation Act. It is well-settled law that it is https://hcservices.ecourts.gov.in/hcservices/ the duty of the court to respect the legislative intent and by giving liberal interpretation, limitation cannot be extended by invoking the provisions of Section 5 of the Limitation Act. 37. In the light of the above discussion, we hold that the High Court has no power to condone the delay in filing the “reference application” filed by the Commissioner under unamended Section 35-H(1) of the Central Excise Act, 1944 beyond the prescribed period of 180 days and rightly dismissed the reference on the ground of limitation. 5. On the other hand, the learned Additional Government Pleader appearing for the respondents submitted that the object of the Act is to ensure equitable distribution of the funds of the erring financial institutions by way of attaching the properties of such institutions and that the beneficial provision to safeguard the interest of the poor depositors who lost their hard-earned money found in the TNPID Act would indicate the direction to the competent authority to file necessary application under Section 4(3) of the Act to make the interim attachment absolute is only directory and not mandatory. He would further contend that the limitation of 30 days stipulated for filing an application to make interim attachment absolute under Section 4(3) of the Act specifically does not exclude the application of Limitation Act or devise the consequence of not filing the application within the time limit set out therein and in such circumstances, Limitation Act will come to rescue the situation and therefore, since the TNPID Act does not contain the provision which specifically excludes the application of Limitation Act as in the case of Arbitration and Conciliation Act, the application filed by invoking Section 5 of the Limitation Act is maintainable. In support of his submissions, the learned Additional Government Pleader relied upon the following decisions, viz., (a) (2004) 11 SCC 456 (L.S.Synthetics Ltd., versus Fairgrowth Financial Service Ltd., and another), wherein, it has been held in paras 32 to 42 as under: 32. The contention as regards the applicability of the Limitation Act must be considered having regard to the foregoing findings. "33. The Limitation Act, 1963 is applicable only in relation to certain applications and not all applications despite the fact that the words “other proceedings” were added in the long title of the Act in 1963. The provisions of the said Act are not applicable to the proceedings before bodies other than courts, such as a quasi- judicial tribunal or even an executive authority. https://hcservices.ecourts.gov.in/hcservices/ The Act primarily applies to the civil proceedings or some special criminal proceedings. Even in a tribunal, where the Code of Civil Procedure or Code of Criminal Procedure is applicable; the Limitation Act, 1963 per se may not be applied to the proceedings before it. Even in relation to certain civil proceedings, the Limitation Act may not have any application. As for example, there is no bar of limitation for initiation of a final decree proceedings or to invoke the jurisdiction of the court under Section 151 of the Code of Civil Procedure or for correction of accidental slip or omission in judgments, orders or decrees; the reason being that these powers can be exercised even suo motu by the court and, thus, no question of any limitation arises. (See Nityananda, M. Joshi v. LIC of India7, Hindustan Times Ltd. v. Union of India8 and Laxmibai4.) 34. Even no period of limitation is prescribed in relation to a writ proceeding. 35. S.N. Variava, J. in A.K. Menon, Custodian1 whereupon the learned Special Court has placed reliance, observed: “19. It is thus that the said Act lays down a responsibility on the Court to recover the properties. So far as monies are concerned, undoubtedly the particular coin or particular currency note given to a debtor would no longer be available. That however does not mean that the lender does not have any right to monies. What is payable is the loan i.e. the amount which has been lent. The right which the creditor has is not a ‘right to recover’ the money. The creditor has the title/right in the money itself. An equivalent amount is recoverable by him and the title in any equivalent amount remains with the lender. Thus the property which a notified party would have is not the right to recover but the ‘title in the money itself’. Thus under Section 3 (3) what would stand attached would be the title/right in the money itself. Of course what would be recoverable would be an equivalent of that money. Once the money stands attached then no application is required to be made by any parties for recovery of that money. It is then the duty of the court to recover the money. No period of limitation can apply to any act to be done by a court. Therefore in all such https://hcservices.ecourts.gov.in/hcservices/ applications the only question which remains is whether on the date of the notification the right in the property existed. If the right in the property existed then irrespective of the fact that the right to recover may be barred by limitation there would be a statutory attachment of that property. Once there is a statutory attachment of that property the court is duty- bound to recover it for the purposes of distribution. There can be no period of limitation for acts which a court is bound to perform. In this case since the court is compulsorily bound to recover the money there can be no limitation to such recovery proceedings. To be remembered that Section 3(3) as well as Section 13 provide that provisions of the said Act would prevail over any other law. This would include the Limitation Act.” 36. We respectfully agree with the said view. 37. We may, however, add that the attachment of the properties of the notified party being for specific purposes i.e. for the purpose of discharging his liabilities, the Special Court is bound to pass appropriate orders in relation thereto. A property once attached shall remain under attachment till an appropriate order is passed. It is, therefore, idle to contend that even in respect thereof the provisions of the Limitation Act would apply. The court while issuing directions to the Custodian in relation to the attached property for the purpose of discharge of the liability of the notified person must pass an appropriate order. So long the claims or other proceedings initiated before the Special Court as regards discharge of liability of the notified person continue, the attachment remains in force. A proceeding before the Special Court is not a suit for recovery of an amount. The proceedings before the Special Court are extraordinary in nature. Distribution of the assets of a notified person may take a long time but it would bear repetition to state because all the claims filed before the Special Court are disposed of, the property of the notified person stands attached. In other words, the provisions of the Limitation Act would inter alia apply only when a suit is filed or a proceeding is initiated for recovery of an amount and not where a https://hcservices.ecourts.gov.in/hcservices/ property is required to be applied towards the claims pending before the Tribunal for the purpose of discharge of the liabilities of the notified person in terms of Section 11 of the said Act. 38. A Special Court having regard to its nature and functions may be a court within the meaning of Section 3 of the Indian Evidence Act, 1872 or Section 3 of the Limitation Act, 1963 but having regard to its scope and object and in particular the fact that it is a complete code in itself, in our opinion, the period of limitation provided in the Schedule appended to the Limitation Act, 1963, will have no application. For the applicability of Section 29(2) of the Limitation Act, the following requirements must be satisfied by the court invoking the said provision: (1) There must be a provision for period of limitation under any special or local law in connection with any suit, appeal or application. (2) Such prescription of the period of limitation under such special or local law should be different from the period of limitation prescribed by the Schedule to the Limitation Act, 1963. 39. In terms of the provisions of the said Act, no period of limitation is prescribed, evidently because Parliament thought it to be wholly unnecessary. Once the statutory operation relating to the attachment of the property belonging to a notified person comes into being, the duties and functions of the Special Court start. In relation to the duties and functions required to be performed by a court of law, no period of limitation need be prescribed. Furthermore, Section 13 of the said Act provides for a non obstante clause which has been used as a device to modify the ambit of the provisions of law mentioned therein or to override the same in the specified circumstances. (See T.R. Thandur v. Union of India9, SCC para 8.) The said Act does not provide for any period of limitation, the reasons wherefor have been noticed hereinbefore and in that view of the matter, in our considered opinion, Articles 19, 28 and 55 providing for period of limitation prescribed would have no application. Section 13 of the said Act provides for a non obstante clause which is of wide https://hcservices.ecourts.gov.in/hcservices/ amplitude. In a case of conflict between the said Act and any other Act, the provisions of the former shall prevail. 40. In Solidaire India Ltd. v. Fairgrowth Financial Services Ltd.10 this Court held: (SCC pp. 74-75, para 10) “10. … ‘… The legislature being aware of the provisions of Section 22 under the 1985 Act still empowered only the Special Court under the 1992 Act to give directions to recover and to distribute the assets of the notified persons in the manner set down under Section 11(2) of the 1992 Act. This can only mean that the legislature wanted the provisions of Section 11(2) of the 1992 Act to prevail over the provisions of any other law including those of the Sick Industrial Companies (Special Provisions) Act, 1985. It is a settled rule of interpretation that if one construction (sic constructions) leads to a conflict, whereas on another construction, two Acts can be harmoniously constructed then the latter must be adopted. If an interpretation is given that the Sick Industrial Companies (Special Provisions) Act, 1985, is to prevail then there would be a clear conflict. However, there would be no conflict if it is held that the 1992 Act is to prevail.’ ” 41. A statute of limitation bars a remedy and not a right. Although a remedy is barred, a defence can be raised. In construing a special statute providing