Madras High Court
M/S.Integrated Finance Company ... vs Government Of Tamil Nadu on 3 November, 2022
W.P.No.28460 of 2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 03.11.2022
CORAM:
THE HONOURABLE MR.JUSTICE N.SATHISH KUMAR
W.P.No.28460 of 2017
and W.M.P.No.28503 of 2021
M/s.Integrated Finance Company Ltd.,
Rep. by its Authorised Signatory Mrs.A.Hema Jothi,
having its Regd. Office at No.10,
R-Block, Second Floor,
Prem Nagar Colony,
South Boag Road, T.Nagar,
Chennai - 600017. .. Petitioner
Vs.
1. Government of Tamil Nadu,
Rep by Additional Director General of Police,
Economic Offences Wing-II,
SIDCO Old Garments Complex,
Tiru-Vi-Ka-Nagar, Guindy,
Chennai - 600 032.
2. Principal Secretary to Government,
Home Department,
Government of Tamil Nadu,
Fort St. George, Chennai - 600 009. .. Respondents
Prayer: Writ Petition filed under Article 226 of the Constitution of India
seeking a Writ of Mandamus directing the respondents to attach the
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W.P.No.28460 of 2017
properties or collect money to the extent of the default as contemplated
under Section 3 of the Tamil Nadu Protection of Interests of Depositors Act,
1997 from 525 borrowers / guarantors of petitioner company as enumerated
in the representations dated 18.06.2013 & 30.06.2017 against whom decrees
have been obtained by the petitioner company.
For Petitioner : Mr.V.P.Raman
For Respondents : Mr.P.Kumaresan
Addl. Advocate General
Asst. by Mr.V.Nanmaran, AGP
-----
ORDER
This writ petition has been filed seeking a direction to the
respondents to take appropriate action for recovery of the amount by way of
attachment from the borrowers of the petitioner company.
2. It is the case of the petitioner that the petitioner company is a Non
Banking Finance Company incorporated in the year 1983. In the year 2005
due to certain financial difficulties, amounts which were lent to various
borrowers could not be realised and thus the petitioner suffered some
financial difficulties and the RBI has also prohibited the petitioner company
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W.P.No.28460 of 2017
from accepting deposits and bonds.
3. A company petition has also been filed before this Court which
reached up to the Hon'ble Supreme Court, wherein, it has been held that the
amount has to be paid to the depositors. While the matter is pending before
the Hon'ble Supreme Court, based on the complaint made by some of the
depositors, prosecution has been initiated under the Tamil Nadu Protection
of Interests of Depositors Act, 1997 and some of the properties have also
been attached and the Government Orders have also been passed.
4. It is the contention of the writ petitioner that about 558 borrowers
have borrowed the amount from the petitioner company and they did not pay
the same to the petitioner company. The petitioner company has also
obtained several decrees as against the borrowers, despite that the above
amount has not been realised by the Government. Hence, Mandamus has
been sought.
5. In the counter a stand has been taken that though they have taken
steps to realise the amount from the borrowers, some of the borrowers are
not in existence and that the case is still under investigation.
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W.P.No.28460 of 2017
6. The learned counsel appearing for the petitioner would submit that
though the offence is made punishable under Section 5 of the Act, the very
object of the Act is to recover the amount from the borrowers and pay the
same to the depositors. The learned counsel further submitted that the
counter filed by the respondents though referred about nine companies that
is already a subject matter in other W.P.No.38762 of 2015, whereas, counter
is silent about 558 borrowers. Hence, he raises doubt about the competent
authority or the Government to recover the amount from the borrowers or
attach the properties of such borrowers. He further submitted that many
properties were purchased from borrowal from financial company. Hence, it
is his contention that the amount payable to the company by the borrowers
would come around Rs.52,11,69,715/-. Hence seeks Mandamus.
7. The learned Additional Advocate General appearing for the
respondents would submit that they have also taken steps for recovery and
some of the borrowers were not in existence and they are making sincere
attempts to recover the amount from the borrowers. It is further submitted
that most of the borrowers borrowed on the basis of hire purchase agreement
and therefore no immovable property could be secured.
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W.P.No.28460 of 2017
8. I have heard the learned counsel on either side and also perused
the entire materials.
9. As rightly pointed out by the learned counsel appearing for the
petitioner that the very object of Tamil Nadu Protection of Interests of
Depositors Act, 1997 is to recover the money lost by the depositors. Section
3 deals with attachment of properties on default of return of deposits. Sub
Clause (ii) makes it clear that if the Government is satisfied that such
financial establishment is not likely to return the deposit or to make payment
of interest or to provide the service, the Government may, in order to protect
the interest of the depositors of such financial establishment, pass ad interim
order attaching the money or other property alleged to have been procured
either in the name of the financial establishment or in the name of any other
person from and out of the deposits collected by the financial establishment.
10. The above Section also makes it clear that any money or other
property is not available for attachment or not sufficient for repayment of the
deposits, such other property of the said financial establishment or a person
who has borrowed money from the financial establishment to the extent of
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W.P.No.28460 of 2017
their default or such other properties of that person in whose name properties
were purchased from and out of the deposits collected by the financial
establishment, the Government is competent to recover from them.
11. It is the case of the petitioner that 558 borrowers borrowed
amounts to the tune of Rs.52,11,69,715/-. With regard to that they have filed
a suit and obtained a decree and judgment. Despite the same, the
Government is not taking any action in this regard.
12. Now the issue is with regard to the recovery of the money from
the borrowers of the petitioner company. As the amount payable by the
borrowers comes around Rs.52 crores, this Court is of the view that the
competent authority / Government has to initiate action for recovery of the
amount from various borrowers of the financial institution, so that all the
depositors who lost the money with the writ petitioner's institution may be
paid their money. It is for the Government to find out if there are any
properties immovable or movable owned by such borrowers and the same
can be attached for the purpose of recovery of the amount.
13. Such view of the matter, the petitioner is directed to furnish all
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W.P.No.28460 of 2017
the details relating to the borrowers and the decree obtained against the said
borrowers to the respondents so as to enable them to take action as per law
for recovery of the money. With the above direction the writ petition is
allowed and the petitioner is directed to furnish such details to the
respondents within a period of four weeks from the date of receipt of a copy
of this order. Consequently, the connected miscellaneous petition is closed.
No costs.
03.11.2022
kk
To
1. The Additional Director General of Police,
Economic Offences Wing-II,
SIDCO Old Garments Complex,
Tiru-Vi-Ka-Nagar, Guindy,
Chennai - 600 032.
2. Principal Secretary to Government,
Home Department,
Government of Tamil Nadu,
Fort St. George, Chennai - 600 009.
https://www.mhc.tn.gov.in/judis
W.P.No.28460 of 2017
N.SATHISH KUMAR, J.
kk
W.P.No.28460 of 2017
and W.M.P.No.28503 of 2021
03.11.2022
https://www.mhc.tn.gov.in/judis
