THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY WRIT PETITION No.3963 of 2001 ORDER: The land admeasuring Ac.0.33 cents in Survey Nos.293/1, 2 and 3D, and 358 square yards in Survey Nos.293/1 and 2 of B.K. Palli, which is suburb of Madanapalle Town, Chittoor District was owned by the Commercial Benefit Corporation, the fourth respondent herein. The petitioner is a private limited company undertaking the activity of establishment of hospitals. It purchased the said land through two sale deeds, dated 31.05.1997, and thereafter, constructed a hospital, duly obtaining permission from the authorities concerned. The fourth respondent and its sister organizations are involved in the business of finance and chit transactions. On finding that the fourth respondent and its sister concerns have committed default in payment of the amounts to the subscribers, respondents 1 to 3 initiated proceedings against them under the provisions of the Andhra Pradesh Protection of Depositors of Financial Establishments Act, 1999 (for short ‘the Act’). The first respondent issued G.O.Ms.No.30 Home (General - B) Department, dated 02.02.2001, directing attachment of various items of property including the two items of the land referred to above. The same is challenged in this writ petition. It is pleaded that the property was transferred in favour of the petitioner much before the proceedings came to be initiated and Section 3 of the Act has no application to the said properties. It is also stated that even if there exists any justification to invoke the provisions of Section 8 of the Act, it was competent for the Special Court alone to have passed the orders, that too, after issuing show cause notice to the petitioner. On behalf of respondents 1 to 3, a counter-affidavit is filed narrating the circumstances that led to the issuance of the G.O. It is stated that the Act empowers the respondents to proceed against not only the properties held by the financial institutions, but also those who were transferred in anticipation of such action. The fourth respondent remained ex parte. Heard Sri S.V.Bhatt, the learned counsel for the petitioner and the learned Government Pleader for Home for respondents 1 to 3. The A.P. State Legislature enacted the Act with an object of protecting the interests of the depositors and chit subscribers. Section 3 of the Act provides for attachment of the properties whenever the financial establishments, as defined under Section 2 (c) of the Act commit default. The power to order attachment under this provision is conferred upon the Government itself. This, however, is confined only to the properties that are owned by the financial establishments as on the date of attachment. Section 8 of the Act empowers attachment of the properties, which are in the hands of transferees from financial establishments. Recourse can be had to this provision if it is found that the properties, which are attached from the financial establishments, are not sufficient to meet the liability towards the depositors or the chit subscribers. A significant difference between Section 3 on the one hand, and Section 8 on the other, is that the power to effect attachment under the former is conferred upon the Government, whereas in case of the latter, the power is conferred upon the Special Court constituted under Section 6 of the Act. Further, before any property, which is in the hands of transferee is attached, the Special Court is required to issue notice to the affected parties. It is only when a finding is recorded by the Special Court that the transfer was made, otherwise than in good faith, and not for valuable consideration, that the attachment under Section 8 of the Act can be ordered. In the instant case, the property that was already sold by the fourth respondent in favour of the petitioner is sought to be attached through the impugned G.O. issued by the first respondent. Since the petitioner answers the description of a transferee, steps, if at all, would have to be taken against it only under Section 8 of the Act. It has already been mentioned that the Special Court alone is conferred with the power to take steps under Section 8 of the Act. Therefore, the impugned G.O. is patently without jurisdiction. The writ petition is accordingly allowed and the impugned G.O. is set aside. There shall be no order as to costs. ________________________ L.NARASIMHA REDDY,J Dt:24.03.2009 Note: L.R. copy to be marked. kdl