Summary
The Government could initiate depositor-protection proceedings by an ad-interim attachment under Section 3 before the competent authority took the subsequent Section 4 steps. Prior property identification by that authority was not a statutory precondition. The High Court’s contrary sequencing defeated the protective scheme; the attachment order was upheld.
Issues
- Whether Section 4 proceedings were a prerequisite to the Government’s Section 3 ad-interim attachment.
Provisions considered
- Sections 3 and 4, Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997Government attachment initiated the process; the competent authority thereafter sought the Special Court’s further orders through the prescribed application and affidavits. (¶ 11–16)
Held
- Section 3 empowered Government action on depositor complaints or the specified belief of calculated fraud. The plain scheme did not require the competent authority first to identify properties through Section 4 proceedings. (¶ 12–15)
- The Government’s attachment based on investor complaints, coupled with directions for the competent authority to follow Section 4(3)–(4), complied with the Act. Premature interference with that ad-interim step was erroneous. (¶ 15–16)
Result
State’s appeal allowed; High Court judgment set aside and the Government’s ad-interim attachment upheld.