Justice m.dhandapani 27 Mar 24

CRL OP(MD) No.
20176 of 2022
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

( Criminal Jurisdiction )
Wednesday, the Twenty Seventh day of March Two Thousand and Twenty Four
PRESENT
The Hon`ble Mr.Justice M.DHANDAPANI
CRL OP(MD) No.20176 of 2022

Crl OP(MD)No. 22587 of 2023
CRL OP(MD) Nos.192, 251, 2266, 3326, 3381 of 2024
AND
WP(MD) No.14035 of 2022,
CRL OP(MD).20176/2022 :
JALALUDEEN ... PETITIONER

Vs
1 THE ADDITIONAL DIRECTOR GENERAL OF POLICE,

CBCID, SIDCO ELECTRONIC COMPLEX,
BLOCK NO.3, 1ST FLOOR GUINDY INDUSTRIAL ESTATE,
CHENNAI 32.
2 THE INSPECTOR OF POLICE

CBCID, TIRUCHIRAPPALLI.
3 THE DEPUTY SUPERINTENDENT OF POLICE,

ECONOMIC OFFENCES WING, UNIT II,
TIRUCHIRAPPALLI.
(CRIME NO.78 OF 2021) ... RESPONDENTS/COMPLAINANT
For Petitioner : MR.M.AJMAL KHAN, Senior Counsel

for M/S.AJMAL ASSOCIATES
For Respondent : MR.B.NAMBISELVAN, Additional Public Prosecutor
https://www.mhc.tn.gov.in/judis
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Prayer in CRL OP(MD). 20176/ 2022 :

To transfer the investigation in Crime No.78 of 2021 pending on the file of 3rd
Respondent Police to the file of 2nd Respondent with a direction to investigate into
the matter and file charge sheet in accordance with law.
CRL OP(MD)No. 22587 of 2023
G.Ravisankar ... Petitioner/Victim/ Investor
Vs
1 Kamalakannan ... Respondent No.1/Accused No.6

in Crl.OP(MD)No.22587/2023
2 The Inspector of Police
EOW-II Police Station,
Madurai District.
Crime No.03 of 2023. ... 2nd Respondent/Respondent/Complainant
For Petitioners : Mr.S.M.ANANDHA MURUGAN, Advocate

for M/S.MATHURAM LAW ASSOCIATES
For Respondent 1 : Mr.AAYIRAM K.SELVAKUMAR, Advocate
For Respondent - 2: MR.B.NAMBISELVAN, Additional Public Prosecutor

This Criminal Orignal Petition is filed under section 439(2) r/w 482 of Cr.P.C.,
to cancel the Bail granted to the accused No.6 in Crl.M.P.(MD).No.443 of 2023 on the
file of the Learned Special Court under TNPID Act cases, Madurai dt.10.11.2023.
CRL.O.P.(MD)Nos.192 , 251, 2266, 3326 & 3381 of 2024,
Rajkumar ... Petitioner/Victim in CRL OP(MD)Nos.192 & 251 of 2024
Suresh ... Petitioner/Victim in CRL.OP(MD).2266/2024

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Sarathkumar ... Petitioner/Victime in CRL.OP(MD).3326/2024
Balakrishnan ... Petitioner/Victim in CRL.OP(MD).3381/2024
1 Kapil ... 1st Respondent/Petitioner No.2/Accused No.29

1 Kamalakannan ... 1st Respondent/Petitioner/Accused No.6

st
1 Simeon Raja ... 1 Respondent/Petitioner/Accused 23
1 Balasubramanian ... 1st Respondent/Petitioner/Accused 7

in Crl.OP(MD)No.3326 & 3381/2024
2 The Inspector of Police
EOW-II Police Station,
Madurai District.
Crime No.03 of 2023. ... 2nd Respondent/Respondent/Complainant
in all petitions
For Petitioners : Mr.ANANDHA RAJAGOPAL, Advocate

in all petitions
For Respondent 1 : Mr.AAYIRAM K SELVAKUMAR, Advocate
in all petitions
For Respondent 2 : MR.B.NAMBISELVAN, Additional Public Prosecutor
in all petitions
For Intervenors : Mr.AJMALKHAN, Senior Counsel
for M/S. AJMAL ASSOCIATES, for Ramamoorthy
MR.K.PRABHA, Advocate for MURUGAN
MR.A.SINGARAVELU, Advocate for DEEPA
MR.R.KRISHNAN , Advocate for NASERIN BANU
MR.M.SARAVANAN, Advocate for SAKTHIVEL

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Prayer in Crl.OP(MD) No.192 of 2024 :-

This Criminal Original Petition is filed under section 439(2) of Cr.P.C., to Cancel
the bail granted to the 1st Respondent/Accused No.29 in Cr.MP.No.338 of 2023 by its
order dt.29.8.2023 on the file of Learned Special Court under the TamilNadu
Protection of Interest of Depositors(In Financial Establishment)Act, Madurai.

This Criminal Orginal Petition is filed under section 439(2) of Cr.P.C.,to Cancel
the Bail granted to the 1st Respondent/Accused No.6 in Cr.MP.No.443 of 2023 by its
order dt.10.11.2023 on the file of Learned Special Court Under the TamilNadu
Protection of Interest of Depositors(In Financial Establishment)Act, Madurai.

To cancel the bail granted to the 1st respondent / accused No.23 in Cr.M.P No.
338/2023 by its order dt. 29.08.2023 on the file of the learned Special Court under the
Tamilnadu Protection of Interest of Depositors (In Financial Establishment ) Act,
Madurai.

To cancel the bail granted to the 1st Respondent / accused No.7 in Crl MP
No.504/2023 by its order dt.23.01.2024 on the file of learned Special Court under the
TamilNadu Protection of Interest of Depositors (In Financial Establishment) Act,
Madurai.

To cancel the bail granted to the 1st Respondent /Accused No.7 in Cr MP
No.504/2023 by its order dt.23.01.2024 on the file of Learned Special Court under the
Tamilnadu Protection of Interest of Depositors (In Financial Establishment) Act,
Madurai.
WP(MD).14035/2022 :
DHANEESH.S ... PETITIONER

Vs
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1 THE PRINCIPAL SECRETARY TO GOVERNMENT,

HOME DEPARTMENT, SECRETARIAT, CHENNAI - 600 009.
2 THE DISTRICT REVENUE OFFICER / COMPETENT AUTHORITY,,

KANYAKUMARI DISTRICT, NAGERCOIL.
3 THE SUPERINTENDENT OF POLICE,

ECONOMIC OFFENCE WING,
NO.2, NATESAN SALAI, PTC,ASHOK NAGAR,
CHENNAI - 600 083.

ECONOMIC OFFENCE WING - II,
5 THE INSPECTOR OF POLICE,

(CRIME NO. 1/2017).
6 NIRMALAN ... RESPONDENTS
(*)7 THE HOME SECRETARY,

GOVERNMENT OF TAMIL NADU,
HOME DEPARTMENT, CHENNAI.

ECONOMIC OFFENCES WING,
CHENNAI 83. ... 7 TH & 8 TH RESPONDENTS
(*) R7 AND R8 ARE SUO MOTU IMPLEADED VIDE

COURT ORDER DATED.05.02.2024 IN WP(MD).
14035/2022
For Petitioner : MR.V.THIRUMAL, Advocate
For Respondent 1-5 : MR.B.NAMBISELVAN,
Additional Public Prosecutor
For Respondent 6
: MR.K.K.VIJAYAN, Advocate
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Prayer in WP(MD).14035/2022 :
To issue a Writ of Mandamus directing the respondents No.1 to 5 to take
appropriate legal steps to appoint the Honble Retired high Court Judge as a
Committee Chairman to identify the property and bring the property to public
auction sale and to disburse the money to the affected depositors in a speedy manner
in connection with the property in Crime No. 1 of 2017 dated 15.09.2017 on the file of
the 5th respondent and connected C.C.No. 6 of 2019 on the file of the Special Court
under TNPID Act Cases 1997, Madurai.
COMMON ORDER
Two different types of petitions have been filed, which have sought the
indulgence of this Court for invoking its power u/s 482 Cr.P.C. as also Article 226 of
the Constitution, but the prayer in the said petitions are three-fold, viz.,
Batch of petitions in Crl. O.P. Nos. 192, 251, 2266, 3326, 3381 of 2024 and
22587 of 2023 have been filed to cancel the bail granted to the respective
accused;
Crl. O.P. (MD) No.20176/2022 has been filed seeking transfer of
investigation; and
W.P. (MD) No.14035/2022 has been filed for a mandamus for direction to
appoint a Retd. High Court Judge for the purpose of expediting the
process of realising and disbursing the amounts to the depositors.
2. Bail has been granted vide order dated 10.11.2023 to A-6, A-7, A-23 and A-29
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by the Special Judge, Special Court under the TNPID Act in Crime No.3/2023
considering the period of incarceration of the accused and also the duration of
investigation. Alleging violation of the bail conditions and also tampering with the
witnesses, petitions were filed seeking cancellation of bail granted to the abovesaid
accused.
3. The case has been regularly coming up before the Court, wherein, reports are
being filed with regard to the action taken to identify the properties and take steps
with regard to protecting the interests of the depositors. Pursuant to the orders
passed by this Court on 21.3.2024 report has been filed by the 8th respondent.
However, finding that the report is not comprehensive enough as it did not provide
the timelines within which constructive action would be taken up to realise the
amounts and distribute the same to the depositors, this Court directed the 7th and 8th
respondents, to file a report, providing the following details :-
“4. A perusal of the report shows that though the steps taken by the
respondents have been listed out in the report, yet the report is bereft
of the details as to the timelines within which various actions would
be taken by the law enforcing agency. The report is bland without
any time frame being submitted for completing the investigation and
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taking necessary action so that the amounts deposited would be
disbursed to the depositors. In the light of the aforesaid position, this
Court would like to know the timelines within which the following
below-mentioned tasks would be completed by the law enforcing
agency :-
i) The time within which the complaints/claims from the depositors
would be invited;
ii) The period within which the investigation would be completed,
charge sheet filed;
iii) The time within which the properties would be identified and
steps taken to attach the said properties;
iv) The time within which the necessary Government Order would be
issued for attaching the properties so identified;
iv) The time within which the Court would be moved and an order of
interim attachment would be obtained from the Court with respect to
the properties identified;
v) The time within which steps would be taken to obtain permanent
attachment of the properties from the Court;
vi) The time within which the properties, which are attached, would
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be brought for auction;
vii) The time within which the amount realised by way of auction
would be disbursed to the depositors and the manner in which such
disbursal would be made to the depositors.”
4. Pursuant to the aforesaid directions, a report dated 27.03.2024 was filed by
the 8th respondent, wherein, the broad spectrum of the investigative process involved,
the 8th respondent has spelt out the time required for receipt of complaints/claims
from the depositors, filing of the charge sheet, identification of properties and taking
of steps to attach the same, obtainment of Government Order for attaching the
properties, obtainment of ad-interim attachment and permanent attachment from the
competent Court, the properties to be brought for auction and disbursal of the
amounts realised through the auction sale to the depositors. A tabulated statement
has been given in the report with regard to the above, which is quoted hereunder for
reference :-
S. Name of the Task Tentative

No. Timeline
1 The time within which the 6 Months
complaints/claims from the
depositors would be invited
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2 The period within which the 12 to 15 Months

investigation would be completed,
charge sheet filed
3 The time within which the properties Minimum 6
would be identified and steps taken Months or more
to attach the said properties
4 The time within which the necessary 4 to 6 Weeks
Government Order would be issued
for attaching the properties so
identified
5 The time within which the Court Competent
would be moved and an order of Authority
interim attachment would be Discretion
obtained from the Court with respect
to the properties identified
6 The time within which steps would Competent
be taken to obtain permanent Authority
attachment of the properties from the Discretion
Court
7 The time within which the properties Competent
which are attached would be Authority
brought for auction Discretion
8 The time within which the amount Competent
realised by way of auction would be Authority
disbursed to the depositors and the Discretion
manner in which such disbursal
would be made to the depositors
5. It is further evident from the report that timelines with regard to S. Nos.5 to 7
could not be spelt out presently due to the fact that Lok Sabha Elections, 2024 is
scheduled to take place in which the Revenue Department personnel would be
deployed and, therefore, the District Revenue Officer, who is the competent authority
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would be held up and, therefore, till the elections are over, no work can be
undertaken with regard to S. Nos. 5 to 8.
6. It is to be pointed out that no person lives till eternity and every individual
strives hard during his early days to gain monetary advantage, which he invests so
that at a later point in life, it would come in aid in his old age. The monetary
advantage, which is sought to be realised by means of deposits is being siphoned off
by unscrupulous elements by floating such finance companies, which dangles
lucrative and fanciful interest before the eyes of the general public, thereby, infecting
their minds to invest with them, but seldom such companies repay the deposits to the
common man, where the common man is made to run from pillar to post to retrieve
his hard earned money.
7. Only in the aforestated scenario, the Tamil Nadu Protection of Interest of
Depositors Act (for short ‘the Act’) was enacted, which was aimed at protecting the
interests of the depositors in financial establishments. The primary purpose of the
Act is to safeguard the interests of the depositors, who invest their money in financial
establishments, which do not come within the purview of the Regulatory Authorities
like Reserve Bank of India. Only to secure the safety and interest of such depositors
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and to regulate and control the functioning of the financial establishments and to
prevent fraudulent activities being perpetrated amongst the depositors, which would
have a harmful and deleterious effect on the depositors’ life, the Act was put in place.
8. From the above, it is evident that the Act serves as a crucial legal framework
in promoting financial stability while at the same time protecting the interests of the
depositors in the State by regulating the operations of financial establishment and
preventing fraudulent practices by financial establishments.
9. Towards achieving the purpose of enactment of the Act, Special Courts have
been established for expediting the adjudication of cases relating to fraudulent acts
committed by financial establishments against the depositors. Section 3 of the Act
enables the Government to attach properties of the companies, its directors,
promoters, etc., which were purchased from out of the proceeds of the said collection.
10. By invoking the power available u/s 3 of the Act, the Government has
issued G.O. (Ms) No.195, Home (Police-XIX) Dept., dated 8.3.2024, passing an ad-
interim order attaching the immovable properties as specified in the schedule
attached to the said Government Order, being the properties held in the name of the
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defaulted firm. However, it is to be noted that in respect of the properties, which are
held in the name of the accused involved in the aforesaid offence, no ad-interim order
has been passed till date and according to the 8th respondent, investigation is still on
in identification of the properties and steps would be taken to attach the properties,
once they are fully identified.
11. While the aforesaid Government Order has been issued in respect of certain
properties, which were identified, however, in pursuit of identification of other
properties, towards which investigation is taking place, necessary Government
Orders have to be issued upon such identification is made, whereinafter only the
properties can be attached permanently and brought to auction.
12. In this backdrop, an analysis of the report submitted even as back as in the
year 2022 reveals that the financial irregularities in the collection of deposits runs to
about Rs.245 Crores till 12.03.2024, which is on the basis of about 1246 complaints
received from the depositors, who have not been repaid with their deposits. It
further transpires from the report that more than 110 companies have been floated of
which 28 companies have been involved in real estate business and that there is
change of Directors between the accused periodically. It further transpires from the
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report that properties worth about Rs.11.56 Crores have been identified for which
G.O. Ms. No.195 dated 8.3.2024, which has been noted above, has been issued,
ordering attachment of the said properties. In the aforesaid backdrop, since the
financial fraud committed is of large scale proportion, by the report dated 27.3.2024,
the period within which the various steps in the sequence of the Act would be
undertaken has been spelt out. However, to certain pointed queries with regard to
the timelines within which action would be taken, the respondents have taken
umbrage under the General Elections, 2024 by submitting that the revenue machinery
is involved in the election process and, therefore, the specific timelines could not be
given at this point of time.
13. It is to be pointed out that the Act has been enacted to safeguard the
interests of gullible depositors, who have been cheated at the hands of persons like
the accused. However, under the shield of General Elections, the benefits, which
flows from the Act cannot be curtailed so as to not reach the hands of the depositors
on time, as otherwise the intent of the Act would stand frustrated. Therefore, all
efforts ought to be taken to see that necessary steps are taken to complete the
different tasks within a particular timeline, which alone would ensure that the
depositors would stand to benefit.

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14. Pausing here for a moment. Batch of about six petitions have been filed to
cancel the bail granted to some of the accused by premising the case that the accused
are trying to tamper with the witnesses and also put spokes in the investigative
process.
15. In this regard, when this Court directed the learned counsel for the
petitioners to address on the question of cancellation of bail, learned counsel
appearing for the petitioners submitted though they had sought for cancellation of
bail, however, their main aim it only to see that they get back their money, which
they had deposited with the accused and in view of the fact that steps are being taken
to attach the properties of the accused and the companies floated by the accused, this
Court may issue necessary directions for attaching all the properties and sell the same
in auction and disburse the amount to the depositors.
16. It is the further submission of the learned counsel for the petitioners that in
the event of this Court deciding not to cancel the bail granted to the accused, this
Court may direct the accused persons to appear before the law enforcing agency and
disclose the details of all the properties and co-operate with the investigation so as to
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enable the law enforcing agency to attach the property permanently and bring the
properties for sale by public auction and disburse the amount to the depositors. It is
further submitted that if the accused failed to cooperate with the investigation,
direction may be issued to the investigating agency to take steps to have the bail
cancelled.
17. Learned counsel appearing for the accused submits that nearly 798
complaints have been closed and the properties worth about Rs.400 Crores have been
handed over to the respondent police. For handing over the rest of the properties, the
accused had approached the respondent Police, however, they have reported that
they will receive the properties as per the directions of the Court. It is the further
submission of the learned counsel that some third parties are willing to purchase the
properties and if the properties are sold, the amounts will be credited to the
Government which could ensure in speedy disbursal of the amount to the depositors.
It is further submitted that the details with regard to total number of depositors,
address, approved and unapproved properties have already been given to the law
enforcing agency.
18. It is further submitted by the learned counsel appearing for the accused that
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the accused would cooperate fully with the investigating agency/the respondents
herein in the identification of the properties and provide necessary assistance so that
steps are taken by the investigating agency to secure the properties, attach the same,
auction sale and disburse the amounts due to the depositors and in the event of the
accused not cooperating with the investigation, the investigating agency may proceed
in accordance with law.
19. This Court has carefully considered the submissions advanced by the
learned counsel appearing on either side and perused the materials available on
record.
20. Periodical reports have been filed by the investigating agency before this
Court of which one such report dated 19.3.2024 reveals the lethargic and slow pace at
which investigation is being carried on by the investigating agency. A perusal of the
same reveals the following details :-
S. No. Details Amount

(Rs.)
1 Number of pending investigation & 555

further action
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2 Number of depositors involved 3,57,809
3 Number of GOs issued 286
4 Value of deposits involved 10,145,29,42,11

0/-
5 Worth of properties attached 851,99,94,694/
-
6 Value of sale of properties 104,84,06,161/
-
7 Total amount deposited in the DRO 140,14,84,562/
account under the TNPID Act -
(Auction proceeds & accused
payments)
8 Amount settled through TNPID 50,58,41,874/-

courts
9 No. Of depositors who received their 5,022

deposits through court under the
TNPID Act
10 Amount disbursed to the depositors 29,67,43,460/-

through DROs under the TNPID Act
11 No. Of depositors who received their 6,157

deposits through DRO under the
TNPID Act
12 Total amount disbursed to the 80,25,85,334/-

depositors under the TNPID Act
13 Total No. Of depositors who 11,179

received their deposits under the
TNPID Act
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21. From the above, it is evident that though the total number of depositors
involved is about 3.60 Lakhs, however, only 11,179 depositors alone have been
settled. The amount involved is in excess of Rs.10,000 Crores of which only
properties worth about Rs.851 Crores have been attached and an amount of only a
paltry amount to the extent of about Rs.150 Crores alone have been disbursed to the
depositors through the TNPID Court/DROs. Further the report reveals that more
than 315 cases are pending in which action needs to be taken by the investigative
agency. This shows the enormity of the financial transaction involved and the
involvement of the various persons, who have perpetrated the fraud on the general
public. The above clearly reveals that the investigative machinery is proceeding in a
slow pace and it requires to be expedited if the depositors are to realise the fruits of
their hard earned savings and the intent and purpose of the Act is fulfilled.
22. In the aforesaid backdrop, the various petitions filed by the petitioners, who
are depositors in the different financial establishments requires to be considered,
more particularly keeping in mind the interest of the depositors and enabling them to
realise their hard earned money.
23. In the aforestated scenario, though the petitions have been filed cancellation
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of bail granted by the Court below and also for other reliefs, which have been
detailed supra, however, it is to be pointed out that the interest of all the
stakeholders, including this Court is only to ensure that the depositors get back their
hard earned money. Even, the Act, u/s 5-A provides for compounding of the offence.
Therefore, when the accused, on their own volition and seeking remorse are ready
and willing to cooperate with the investigation in identifying the properties without
putting any fetters in the investigation, this Court has to necessarily consider the said
undertaking before passing any orders cancelling bail.
24. As aforesaid, the Act has been enacted only for the purpose of retrieving the
money of the depositors, which had been clandestinely siphoned off by persons like
the accused. When steps are taken by the investigating agency to retrieve the money
and the Government, in the said drill, has also taken steps in issuing the necessary
Government Orders, attaching the properties of the accused persons and the
companies and further steps are to be taken towards permanent attachment of the
properties, bringing the said properties to auction sale and disbursing the sale
proceeds to the depositors alone should be borne in mind, more so, when the accused
are ready to lend all their help in identifying the properties and selling the same for
paying back the depositors.

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25. In the aforesaid backdrop, this Court would venture to look into the power
of the Special Court and the tasks that it could perform in the interests of the
depositors.
26. Section 4 of the Act provides authority on the Government to appoint
Competent Authority to exercise control over the properties attached by the
Government u/s 3. Sub-section 3 to Section envisages the competent authority, so
appointed to apply within thirty days to the Special Court constituted under the Act
for making the ad interim order of attachment passed by the Government u/s 3
absolute and for a direction to sell the property so attached by public auction and
realise the sale proceeds. The procedure for filing an application under sub-section
(3) to Section 4 is provided for under sub-section (4).
27. Once the application is filed by the competent authority under sub-section
(3) of Section (4), the procedure for making the attachment, sale, realisation and
distribution is vested with the Special Court u/s 7 of the Act. Once the procedure
contemplated u/s 7 is followed, the Special Court shall pass appropriate orders
under the said provisions of Section 7 making the interim order of attachment passed
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by the Government u/s 3 absolute and, thereafter, proceed for sale, realisation and
distribution of the sale proceeds in accordance with Section 7. Therefore, once the
property is sought to be permanently attached, the scope of the Special Court is
attracted and is limited to the extent of sale, realisation and distribution of the sale
proceeds.
28. Keeping in mind the said facts as also the provisions of law, this Court is of
the considered view that presently cancelling the bail granted to the accused would
not be in any way beneficial in the interest of equity and justice, as the presence of the
accused outside would be more helpful for the investigating agency to secure the
properties. Further, considering the plea made by the accused and also taking into
account the undertaking of the accused that they would not interfere with the
investigation and render all assistance in identifying the properties, this Court is
inclined to fix the timelines for completion of the various tasks, which would fall
upon the investigating agency in calling for claims till the disbursal of the amounts to
the depositors on auction selling the properties by also keeping in mind the General
Elections, 2024, which cannot act as a detriment in proceeding further with the
manner in which the complaint should be proceeded in accordance with the Act.
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29. However, one thing which requires the consideration of this Court is the
appointment of Advocate Commissioner made by the court below. The court below,
invoking the powers under Order XXVI Rule 10-B of the Code of Civil Procedure has
appointed the Advocate Commissioner in I.A. No.10/2024 at the instance of one of
the accused, who had prayed that the petitioner therein is taking genuine steps and
attempts to settle the issue in favour of the depositors for which purpose
appointment of Advocate Commissioner is necessary.
30. A perusal of the order passed by the court below on the aforesaid interim
application, the following finding has been rendered :-
“10. Even though the offence is compoundable before the Competent
Authority being it is the Special Court, utmost care has to be taken to the
materials brought before the Court and it should be organized and
streamlined in a proper way to protect the interest of the depositors. The
petitioner is making his genuine effort to compound the offence subject to
the willingness of the depositors either by way of lands or by way of
money. The petitioner had given the undertaking that they are having
sufficient properties to compound entire depositors of their total financial
establishments.”
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31. Based on the aforesaid finding, the court below has proceeded to appoint
the Advocate Commissioner.
32. Constitution of Special Court is provided for under Chapter IV of the Act.
Section 6 thereof provides for the constitution of the Court and the powers of the
Special Court with regarding to attachment, sale, realisation and distribution are
provided for u/s 7. A careful perusal of Section 7 reveals that the main purpose of
the constitution of the Special Court is for trying the case relating to financial
establishments that tend to cheat the depositors and in this regard, the power of the
court extends to issuance of notice on such persons interested in the properties, which
are the subject matter of dispute, which is alleged to have been procured through the
proceeds of the crime and to pass orders with regard to attachment of the property or
any portion thereof.
33. Sub-section (5) of Section 7 of the Act provides that where objection is made,
the Special Court shall proceed to investigate the same and in the course of such
investigation the Special Court shall, subject to the provisions of the Act follow the
procedure and exercise all the powers of a Court in hearing a suit under the Code of
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Civil Procedure, 1908, and any person making an objection shall be required to
adduce evidence to show that at the date of attachment he had some interest in the
property attached.
34. In this regard, a perusal of Order XXVI Rule 10-B of the Code of Civil
Procedure reveals that Order XXVI pertains to the cases in which court may issue
commission to examine witness. Rule 10-B thereof pertains to performance of a
ministerial act, which in the opinion of the Court, cannot be conveniently performed
before the Court, the Court may, for reasons to be recorded, issue a commission to
such person, as it thinks fit, directing him to perform that ministerial act and file a
report.
35. There could be no quarrel with the power to issue commission, but could
the Special Court under the Act is vested with such power to appoint such a
commission is the question, which requires determination.
36. The Special Court, as is evidenced from Section 6 and 7 of the Act is
engrafted with the requisite powers for trying the cases with regard to attachment,
sale, realisation and distribution of the properties of a financial establishment to its

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depositors. The Special Court is not a Civil Court for that matter trying a suit. In fact,
Section 5-A provides for compounding of offence, which could be compounded by
the Competent Authority appointed by the Government u/s 4 of the Act. The Court
has no power to compound the offence. The power of the Special Court extends only
to the extent of attachment, sale, realisation and distribution of the properties of a
financial establishment.
37. At best, the Special Court could invoke the provisions of the Code of Civil
Procedure and follow the procedure and exercise all powers of a Court in hearing a
suit, so long as the same is not inconsistent with the provisions of the Act and where
the objection is made with regard to a property by any person claiming interest over
the said property. Barring the above, where an objection is raised, the Special Court
cannot exercise the powers of the Civil Court by exercising the powers and follow the
provisions of the Code of Civil Procedure.
38. In the case on hand, the finding of the Special Court with regard to
appointment of Advocate Commissioner, as evidenced in the order, is as under :-
“11. On considering the aforesaid facts and circumstances of this case, it is
necessary to give an opportunity to the petitioner at a 1st phase, by the way

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of compounding the claims of the 1004 depositors as on date, who had
given the complaints on the file of the 1st respondent. So to arrive the stage
to compound the offence, certain initial work has to be completed
regarding the verification of the claims of the depositors, their willingness
regarding to the aspect of compound the offence either by way of lands or
for property, etc., and all relevant things to be ascertained, which are
ministerial work in nature. In that circumstances, to carry out ministerial
acts towards the aspect of compounding the offence, it is necessary to
appoint a Commissioner, which in the opinion of the Court be
conveniently performed before the Court as well as before the Competent
Authority. ......”
39. Section 5-A of the Act, which pertains to compounding of offence, provides
that it may be compounded by the competent authority before the institution of the
prosecution, or after the institution of prosecution, by the competent authority, with
the permission of the Special Court, on payment of the entire amount due to the
depositors with or without interest.
40. In the present case, if the accused, who had filed the interim application
27/37
seeking appointment of Advocate Commissioner, if really intends to compound the
offence, ought to have moved the competent authority u/s 5-A of the Act and if
prosecution had already been instituted, then the competent authority, appointed u/s
4 of the Act, could move the Special Court seeking permission to compound the
offence on payment of the entire amount due to the depositors with or without
interest.
41. Section 5-A clearly stipulates that the power of the Special Court is only to
the extent of granting permission to the competent authority, if an application for
compounding the offence is made by the accused to the competent authority and not
otherwise. In the case on hand, the application had been moved by the accused
before the Special Court for appointment of an Advocate Commissioner by
submitting that the accused intends to pay out all the depositors as it is financially
stable and has the means through the various properties to pay out the claims.
42. If really the accused intends to pay the depositors in full, the proper course
for the accused is to pursue compounding of the offence before the competent
authority by taking recourse to Section 5-A and upon such application, permission
could be sought for from the Special Court by the competent authority. Without
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following the said procedure, going before the Special Court by moving an
application for appointment of Advocate Commissioner is grossly erroneous and the
Special Court cannot invoke the provisions of the Civil Procedure Code, more
particularly Order XXVI Rule 10-B, when such provision is inconsistent with the Act,
as no such power is ordained on the Special Court to deal with such a relief.
43. Further, when I.A. No.9/2024 has been filed by accused to to raise the order
of attachment, the prayer of the very same accused in I.A. No.10/2024 seeking
appointment of Advocate Commissioner, for alleged smooth settlement of the claims
of the various depositors is directly contrary to the prayer in I.A. No.9/2024. The
prayer in I.A. No.9/2024 and I.A. No.10/2024 are nothing but veiled attempts to
scuttle the investigation being carried on to identify the properties and to bring the
same for attachment and realise the proceeds and pay the amounts due to the
depositors. Further, when there is no allegation against the prosecution/investigating
agency and that the investigation is being carried on properly and properties are
being identified for attachment, there arises no occasion for the Special Court to
appoint Advocate Commissioners on the mere asking of the accused. In fact, the
respondent/prosecuting agency has taken a stand that the accused are trying to
scuttle the investigation through the said applications and had objected to the same.
29/37
However, without properly appreciating the calculated attempts of the accused, the
Special Court had passed the orders in favour of the accused/petitioner therein,
which cannot be allowed to subsist.
44. The Special Court, without properly appreciating its powers and the extent
to which it can exercise its powers, inspite of the fact that an objection had been taken
by the prosecuting agency with regard to appointment of Advocate Commissioner as
also the opening of lock and seal of the premises of the accused, had ordered the said
applications in favour of the accused by appointing an Advocate Commissioner and
also directing the respondents to open the lock and seal of the petitioner mentioned
office for a limited purpose, which is beyond the powers of the Special Court as it
directly affects the interests of the depositors. When the prosecution had taken an
objection, in the interests of the depositors, the Special Court ought to have travelled
with the prosecution and should not have passed orders in the affirmative in the
interim applications, which is beyond the power of the Special Court. The
interpretation placed by the Special Court for appointing the said Advocate
Commissioner is not only beyond its powers, but it is usurping the powers of the
Competent Authority, which is grossly illegal and perverse and, therefore, the order
in I.A. No.10/2024 appointing Advocate Commissioner deserves to be set aside

30/37
and, accordingly, the appointment of Advocate Commissioner vide order
dated19.02.2024 in I.A. No.10/2024 is set aside.
45. Insofar as the petition filed for appointment of a retired High Court Judge
for the purpose of expediting the process of auction selling the properties and
disbursing the sale proceeds to the depositors, investigation is still being carried on
and not all the properties have been identified and attached and, therefore, at the
present juncture, it would not be in the interest of either party to accede to the prayer
made in the writ petition and, therefore, the said writ petition is closed reserving
liberty to the petitioner to seek the said relief at a later point of time, if situation
warrants.
46. Insofar as the petition filed seeking transfer of investigation, it is to be
pointed out that the materials available on record reveal that the investigation is
proceeding in a proper manner but for some hiccups, due to administrative delays
and the likes, which cannot be the basis to transfer the investigation to some other
agency. So long as the investigation is proceeding in a proper manner and there is no
bias in the conduct of the investigation, of which there is no allegation, transfer of
investigation sought for cannot be acceded to. Further, in the absence of any
material, transfer of investigation to some other agency is not only erroneous, but it
would only frustrate the whole process, thereby resulting in further delay in the
31/37
depositors realising their amounts. Further, the allegations levelled in the petition are
bald allegations and there is no pointed allegation and the mere apprehension of the
petitioner cannot be the basis for this Court to transfer the investigation. Therefore,
the said petition seeking transfer of investigation deserves to be rejected.
47. In fine, with the below-mentioned directions, while Crl. O.P. (MD) Nos.
192, 251, 2266, 3326, 3381 of 2024 and 22587 of 2023 seeking cancellation of bail are
dismissed, Crl. O.P. (MD) No.20176/2022 filed seeking transfer of investigation is
dismissed and W.P. (MD) No.14035/2022 filed for appointment of a Retd. High
Court Judge for the purpose of expediting the process of realising and disbursing
the amounts to the depositors is also dismissed as premature :-
The respondents/accused are directed to co-operate with the investigation
by disclosing the properties belonging to them and the amount deposited
by the victims along with the details of the all the depositors.
The respondents/accused shall not alienate any of the properties which are
the subject matter of TNPID cases pending before Special Court.
If any one of the conditions aforesaid is violated, bail granted by the Special
Court to the accused shall stand automatically cancelled and the
respondent shall take steps to take the accused into custody.
The following timelines are fixed for the completion of the various tasks,
32/37
which have been detailed by this Court in its order dated 21.03.2024 :-
The respondents shall make the requisite paper publication giving wider
coverage inviting claims from the depositors against defaulted Financial
Establishment within a period of 2 weeks from the date of receipt of a copy
of this order by clearly mentioning that the depositors who have deposited
amounts in the various financial establishments run by the accused shall
file the necessary claim within a period of eight weeks from the date of the
said paper publication and claims so filed shall be received by the
investigating agency/competent authority during the aforesaid period.
The investigating agency is directed to complete the investigation and file
the charge sheet within a period of 15 months from the date of receipt of a
copy of this order.
The investigating agency shall identify the properties and as and when
such identification is made, within a period of two weeks, the investigating
agency shall take the necessary steps seeking ad interim attachment of the
said properties. Further, all the properties, which are connected with the
financial establishments under the scanner of the investigating agency shall
be identified and an order of ad interim attachment u/s 3 of the Act shall
be obtained from the Government within a maximum period of six weeks

33/37
from the date of a receipt of a copy of this order.
Requisite Government Order shall be issued for attachment of the
properties u/s 3 of the Act within a period of six weeks from the date of
such request as and the investigating agency identifies the properties and
submits the request for ad interim attachment.
As per Section 4(3) of the Act, the District Revenue Officer, who is the
designated Competent Authority, shall make an application for making the
interim attachment of the properties within a period of 30 days from the
date of receipt of the Government Order as provided for under the Act
before the Special Court.
The Special Court shall pass necessary orders making the interim
attachment absolute in respect of the properties for which permanent
attachment is sought for by the competent authority within a period of six
months from the date of such application/permission.
Upon an order of permanent attachment being passed by the Special Court
u/s 7 of the Act, order shall be passed by the Special Court to the
Competent Authority under sub-section (6) of Section 7 to auction sell the
properties so attached and realize the sale proceeds within a period of three
months from the date of such order being passed.

34/37
Upon the properties auction sold and the proceeds realized, the Competent
Authority shall file necessary application for disbursement of the amount
to the depositors within a period of one month from the date of said sale
and realization of the proceeds and on such application being filed, the
Special Court shall pass orders with regard to disbursement of the amount
to the depositors under sub-section (8) to Section 7 within a period of two
months from the date of such application.
Upon such order being passed by the Special Court under sub-section (8) to
Section 7 of the Act, the Competent Authority shall disburse the amounts to
the depositors under due acknowledgement in accordance with law within
a period of three months from the date of the said order passed by the
Special Court.
sd/-
27/03/2024
/ TRUE COPY /
15 /04/2024
Sub-Assistant Registrar
(C.S.I /II /III /IV )
Madurai Bench of Madras High Court,
Madurai - 625 023.
GLN
35/37
TO

CBCID, SIDCO ELECTRONIC COMPLEX,
BLOCK NO.3, 1ST FLOOR GUINDY INDUSTRIAL ESTATE,
CHENNAI 32.

CBCID, TIRUCHIRAPPALLI.

ECONOMIC OFFENCES WING, UNIT II,
TIRUCHIRAPPALLI.
4 THE PRINCIPAL SECRETARY TO GOVERNMENT,

HOME DEPARTMENT, SECRETARIAT, CHENNAI - 600 009.
5 THE DISTRICT REVENUE OFFICER / COMPETENT AUTHORITY,,

6 THE SUPERINTENDENT OF POLICE,

ECONOMIC OFFENCE WING,
NO.2, NATESAN SALAI, PTC,ASHOK NAGAR,
CHENNAI - 600 083.

8 THE INSPECTOR OF POLICE,

9 THE HOME SECRETARY,

GOVERNMENT OF TAMIL NADU,
HOME DEPARTMENT, CHENNAI.
36/37

ECONOMIC OFFENCES WING,
CHENNAI- 83.
11 THE SPECIAL JUDGE UNDER THE TAMIL NADU

PROTECTION OF INTEREST OF DEPOSITORS
(IN FINANCIAL ESTABLISHMENTS) ACT,
MADURAI.

EOW-II POLICE STATION,
MADURAI DISTRICT.
13 THE ADDITIONAL PUBLIC PROSECUTOR,

MADURAI BENCH OF MADRAS HIGH COURT,
MADURAI.
+1. CC to M/S. AJMAL ASSOCIATES Advocate SR.No.17090(F)dt: 28/03/2024

+1. CC to M/S. S.BASKAR MADHURAM Advocate SR.No.3850(I)dt: 28/03/2024
+1. CC to M/S. K.PRABHUAdvocate SR.No.3919(I)dt: 28/03/2024
+1. CC to M/S. V.THIRUMAL Advocate SR.No.16742(F)dt: 28/03/2024
+1. CC to M/S. T.ANTONY ARULRAJ Advocate SR.No.16353(F)dt: 27/03/2024
ORDER
IN
CRL OP(MD) No.20176 of 2022,
Crl OP(MD)No. 22587 of 2023,
CRL OP(MD) Nos.192, 251, 2266, 3326, 3381 of 2024
AND
WP(MD) No.14035 of 2022,
Date :27/03/2024
PKP/15.04.2024/ 37P/19C
Madurai Bench of Madras High Court is issuing certified
copies in this format from 17/07/2023
37/37

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CRL OP(MD) No.

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

The Hon`ble Mr.Justice M.DHANDAPANI

CRL OP(MD) No.20176 of 2022

JALALUDEEN ... PETITIONER

1 THE ADDITIONAL DIRECTOR GENERAL OF POLICE,

2 THE INSPECTOR OF POLICE

3 THE DEPUTY SUPERINTENDENT OF POLICE,

For Petitioner : MR.M.AJMAL KHAN, Senior Counsel

Prayer in CRL OP(MD). 20176/ 2022 :

CRL OP(MD)No. 22587 of 2023

G.Ravisankar ... Petitioner/Victim/ Investor

1 Kamalakannan ... Respondent No.1/Accused No.6

For Petitioners : Mr.S.M.ANANDHA MURUGAN, Advocate

For Respondent 1 : Mr.AAYIRAM K.SELVAKUMAR, Advocate

For Respondent - 2: MR.B.NAMBISELVAN, Additional Public Prosecutor

Prayer in CRL OP(MD). 22587/ 2023 :

CRL.O.P.(MD)Nos.192 , 251, 2266, 3326 & 3381 of 2024,

Rajkumar ... Petitioner/Victim in CRL OP(MD)Nos.192 & 251 of 2024

Suresh ... Petitioner/Victim in CRL.OP(MD).2266/2024

Sarathkumar ... Petitioner/Victime in CRL.OP(MD).3326/2024

Balakrishnan ... Petitioner/Victim in CRL.OP(MD).3381/2024

1 Kapil ... 1st Respondent/Petitioner No.2/Accused No.29

1 Kamalakannan ... 1st Respondent/Petitioner/Accused No.6

1 Balasubramanian ... 1st Respondent/Petitioner/Accused 7

For Petitioners : Mr.ANANDHA RAJAGOPAL, Advocate

MR.K.PRABHA, Advocate for MURUGAN

MR.A.SINGARAVELU, Advocate for DEEPA

MR.R.KRISHNAN , Advocate for NASERIN BANU

MR.M.SARAVANAN, Advocate for SAKTHIVEL

Prayer in Crl.OP(MD) No.192 of 2024 :-

Prayer in CRL OP(MD). 251/ 2024 :

Prayer in CRL OP(MD). 2266/ 2024 :

Prayer in CRL OP(MD). 3326/ 2024 :

Prayer in CRL OP(MD). 3381/ 2024 :

DHANEESH.S ... PETITIONER

1 THE PRINCIPAL SECRETARY TO GOVERNMENT,

2 THE DISTRICT REVENUE OFFICER / COMPETENT AUTHORITY,,

3 THE SUPERINTENDENT OF POLICE,

4 THE DEPUTY SUPERINTENDENT OF POLICE,

5 THE INSPECTOR OF POLICE,

6 NIRMALAN ... RESPONDENTS

(*)7 THE HOME SECRETARY,

8 THE ADDITIONAL DIRECTOR GENERAL OF POLICE,

(*) R7 AND R8 ARE SUO MOTU IMPLEADED VIDE

Crl. O.P. (MD) No.20176/2022 has been filed seeking transfer of

process of realising and disbursing the amounts to the depositors.

respondents, to file a report, providing the following details :-

of the details as to the timelines within which various actions would

be taken by the law enforcing agency. The report is bland without

taking necessary action so that the amounts deposited would be

disbursed to the depositors. In the light of the aforesaid position, this

below-mentioned tasks would be completed by the law enforcing

i) The time within which the complaints/claims from the depositors

ii) The period within which the investigation would be completed,

charge sheet filed;

steps taken to attach the said properties;

issued for attaching the properties so identified;

interim attachment would be obtained from the Court with respect to

the properties identified;