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1999 DIGILAW 109 (MAD)

Kamalamma v. Murugan and Others

1999-02-03

S.S.SUBRAMANI

body1999
Judgment :- S.S. SUBRAMANI, J. The petitioner is the plaintiff in an unnumbered suit on the file of the Subordinate Judge, Kuzhithurai. The suit is one for recovery of money from the defendants who were running a private finance by name "Parvathi Fund". According to the petitioner, she paid amounts in the respondent finance, which the respondents did not return which necessitated the filing of the suit. The lower court refused to entertain the suit on the ground that the suit is barred under the Tamil Nadu (Protection of Interests of Depositors in Financial Establishments) Act, 1997. The reason given by the lower court is that the transaction is covered by the said Act, civil courts have been barred to try such cases. I do not think the order of the lower court is correct. The Act was intended to protect deposits made by the public in financial establishments. Chapter II enables the Government to attach properties on default of return of deposits. For the said purpose, complaints have to be received by the Government from a number of depositors that the financial establishment has defaulted to return the deposits or the Government must have reason to believe that the financial institution is acting in a calculated manner with an intention to default depositors. If any of these conditions is satisfied, the Government is entitled to attach the properties and it may notify the competent authority to take control of the assets. Thereafter, the competent authority shall apply within 15 days to the special court constituted under the Act. Chapter IV deals with the constitution of the special court. The Government with the concurrence of the Chief justice of the High Court constituted a special court in the cadre of the District and Sessions Judge. It also says that any pending case in any other court to which the provisions of this Act apply shall stand transferred to the special court.Before a special court, no suit could be instituted. A reading of sections 3 and 4 makes clear that after attachment of property and entrustment of the matter to the competent authority, the competent authority shall apply to the special court for necessary action. An individual cannot file a suit before the special court and nowhere do I find that institution of a suit is prohibited under the Act. A reading of sections 3 and 4 makes clear that after attachment of property and entrustment of the matter to the competent authority, the competent authority shall apply to the special court for necessary action. An individual cannot file a suit before the special court and nowhere do I find that institution of a suit is prohibited under the Act. So far as the present claim is concerned, there is nothing on record that there had been complaints received from a number of depositors or that the Government has reason to believe about the proposed fraud or any action by the Government. So long as the Government has not initiated any action, nor the matter has been entrusted to the competent authority, the special court also cannot deal with the case now instituted by the petitioner. After institution of a suit if the Government attaches the property as contemplated under section 3 and entrusts the same to the competent authority at that time the case may have to be transferred to the special court after complying with section 6 of the Act. As on date, there is no prohibition for instituting the suit. In the result, the impugned order of the lower court is set aside, I direct the lower court to entertain the suit, register the same and deal with the same in accordance with law. The civil revision petition is allowed. No costs. Consequently, C.M.P. No. 1269 of 1999, is closed. Office is directed to return the original plaint to the petitioner, enabling him to file the same before the lower court along with a copy of this order.