IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD TUESDAY, THE TWENTIETH DAY OF JANUARY TWO THOUSAND AND NINE PRESENT THE HON'BLE MRS JUSTICE T.MEENA KUMARI AND THE HON'BLE MR JUSTICE C.V.NAGARJUNA REDDY WRIT APPEAL NO : 1771 of 2008 (Writ Appeal under Clause 15 of the Letters Patent against the Order dated 31/10/2008 in WP NO : 9174 OF 2008 on the file of the High Court.) Between: 1 M/S. Tilak Associates, An Unregistered Partnership Firm, Rep. by its Managing Partner, Mr. K. Venkateswara Tilak, Aged about 36 Years, R/o. 7/3, Arandalpet, Guntur District. 2 K. Venkateswara Tilak, S/o. Bal Gangadhar Tilak, R/o. 7/3, Arandalpet, Guntur District. 3 K. Jyothi Tilak, W/o. K. Venkateswara Tilak, R/o. 7/3, Arandalpet, Guntur District. 4 K. Bal Gangadhar Tilak, S/o. Hemantha Rao, R/o. 7/3, Arandalpet, Guntur District. 5 K. Susheela Tilak, W/o. Bal Gangadhar Tilak, R/o. 7/3, Arandalpet, Guntur District. ..... APPELLANTS AND 1 Government of Andhra Pradesh, Rep. by its Principal Secretary, Home (Gen-B) Department, Secretariat Buildings, Hyderabad. 2 Additional Director General of Police, CID, Andhra Pradesh, Hyderabad. 3 Collector, Guntur District, Guntur. .....RESPONDENTS Counsel for the Appellant:MR.K.S.MURTHY Counsel for the Respondent No.: GP FOR HOME The Court made the following : JUDGMENT: (Per the Hon’ble Smt. Justice T.Meena Kumari ) Aggrieved by the order, dated 31.10.2008 made in WP No.9174 of 2008 by a learned Single Judge of this court, permitting the appellants to make an application before the Special Court raising the objection with regard to the maintainability of the proceedings, the writ petitioners preferred this Appeal. The appellant assailed GO Ms. No. 84 dated 15.4.2006 whereby an ad interim order under Sec. 3 of the A.P. Protection of Depositors of Financial Establishments Act, 1999 (for brevity the Act) was passed attaching the properties pertaining to the Managing Partner, Partners and others of the first appellant firm contending that the provisions of the Act are not applicable to the activities of the petitioners and consequently to declare the action of the respondents in invoking the provisions thereof, as illegal and arbitrary. The first appellant is an unregistered partnership firm in the business of advising financial investments and the appellants 2 to 5 are connected with the appellant No.1 firm. One Mr. A.V. Krishna Rao, lodged complaint with regard to non-payment of deposited amount and a case in Cr. No. 25 of 2006 came to be registered for the offence under Sec. 5 of the Act and various other provisions of Penal Code. Thereafter, the premises of the appellants was sealed and GO Ms. No. 84 dated 15.4.2006 came to be passed. The case of the appellants before the learned Single Judge was that since the appellants did not accept any deposits, the definitions, as enumerated in Sec. 2 of the Act are not attracted and, as such, the respondents ought not to have invoked the provisions of the Act in passing the impugned order of attachment. Whereas, the case of the respondents is that the appellants not only did business in share marketing by collecting liquid cash, but also accepted lumpsum deposits by way of non-banking transactions, offering higher rate of interest either by issuing receipts or executing promissory notes and ultimately misappropriated the said amounts on maturity and, therefore, the crime has rightly been registered against the appellants leading to ad interim order of attachment of the properties. The learned Single Judge on extensive consideration of the issue involved in the writ petition has observed that though it is claimed by the appellants that it is trading in stocks and mutual funds and not receiving deposits, yet the second respondent has disputed the same and to that extent furnished several details in their counter and, as such, for adjudication of such disputed questions of fact requires detailed enquiry. It is further observed by the learned Judge that it is for the Special Court, constituted under Sec. 6 of the Act, presided over by Dist. & Sessions Judge, to go into the questions with regard to the applicability of the provisions of the Act. Observing so, the learned Single Judge disposed of the writ petition permitting the appellants to make an application before the Special Court raising the objections with regard to the maintainability of the proceedings under the provisions of the Act, within a period of four week and in the event of filing such an application, the Special Court was directed to consider the same and pass appropriate orders and till such time, stay of the sale of properties under attachment was ordered to be continued. Aggrieved thereby, the writ petitioners preferred this Writ Appeal inter alia contending that the impugned GO refers to a complaint and various other transactions, which admittedly do not fall under the definition of deposits under the provisions of the Act. It is further contended that the constitutional validity of the impugned G.O. cannot be gone into by the Special Court constituted under Sec. 6 of the Act. The learned counsel for the appellants has raised similar contentions that were raised in the writ petition. As can be seen from the order of the learned Single Judge, as many as 3000 depositors were cheated by misappropriating their deposits and they have accepted Rs.86.00 lakhs and thus committed criminal breach of trust and finally cheated the customers. The learned Single Judge has rightly observed that the disputed questions of fact cannot be gone into by this court under Article 226 of the Constitution of India and it is for the Special Court to decide the question with regard to the applicability of the provisions of the Act. Having regard to the facts and circumstances, we do not see any reason to differ with the findings of the learned Single Judge. Consequently, the writ appeal fails and is accordingly dismissed. No order as to costs. Learned counsel for the appellants submits that the time of four weeks granted by the learned Single Judge for making an application may be extended. Accordingly, time is extended by further eight weeks from the date of receipt of a copy of this Judgment for making application before the Special Court, as observed by the learned Single Judge. In the event of the appellants making such an application within the stipulated time, the Special Court before which the proceedings are pending, shall consider the same and pass appropriate orders in accordance with law. Till such time, the order of this court dated 24.4.2008 staying the sale of properties of the appellants under attachment, shall continue. _____________________ Justice T. Meena Kumari _________________________ Justice C.V.Nagarjuna Reddy January 20, 2009 MAS