Orissa High Court
Sasmita Ray vs State Of Odisha & Anr on 17 October, 2025
Author: Sanjeeb K Panigrahi
Bench: Sanjeeb K Panigrahi
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Reason: Authentication
Location: ORISSA HIGH COURT,
CUTTACK
Date: 17-Oct-2025 18:58:02
IN THE HIGH COURT OF ORISSA AT CUTTACK
FAO No. 379 of 2023
(An appeal under Section 13 of the Odisha Protection of Interest of
Depositors (In Financial Establishments) Act, 2011 read with Order
43(1) of the Code of Civil Procedure, 1908)
Sasmita Ray .... Appellant (s)
-versus-
State of Odisha & Anr. .... Respondent (s)
Advocates appeared in the case through Hybrid Mode:
For Appellant (s) : Smt. Sujata Jena, Adv.
For Respondent (s) : Mr. Debasis Nayak, AGA
CORAM:
DR. JUSTICE SANJEEB K PANIGRAHI
DATE OF HEARING:-17.09.2025
DATE OF JUDGMENT:-17.10.2025
Dr. Sanjeeb K Panigrahi, J.
1. The appellant in the present appeal is challenging the order dated
09.08.2023 passed by the Learned Presiding Officer, Designated Court
under the Odisha Protection of Interests of Depositors (In Financial
Establishments) Act, 2011 (OPID Act), Cuttack in I.A. No.02 of 2014.
I. FACTUAL MATRIX OF THE CASE:
2. The brief facts of the case are as follows:
(i) This Court in FAO No. 99 of 2023 dated 10.03.2023, allowed Opposite
Party No. 2 to sell properties that were not attached under the OPID
Act, which included the property in question.
(ii) Pursuant to the liberty granted by this Court, the Opposite Party No.
2 sold the property to the appellant by registered Sale Deed No.
1822301213 dated 15.03.2023 for a consideration of ₹26,00,000 (Rupees
Twenty-Six Lakhs Only).
(iii) Subsequently, an ad-interim attachment order was passed under the
OPID Act on 23.03.2023.
(iv) The appellant was communicated of the attachment on 19.07.2023,
when proceedings under the OPID Act were instituted before the
Learned Designated Court to make the ad-interim attachment
absolute. The proceedings were numbered IA No. 2 of 2023.
(v) The proceeding before the Designated Court was listed for
appearance of the appellant on 25.07.2023. On the same day, the
appellant appeared and filed a petition under Section 151 CPC read
with Order 14 Rule 2 CPC, seeking to quash the ad-interim
attachment. The petition contended that the attachment violated
principles of natural justice and Article 300A of the Constitution of
India, and also sought to frame a preliminary issue regarding the
applicability of the OPID Act to the transferred property.
(vi) Despite the appellant's submissions, the Learned Designated Court
passed the impugned order dated 09.08.2023 rejecting the petition.
(vii) The present appeal has been preferred against the said order on the
grounds that it is illegal, perverse, and contrary to the principles of
law, as it disregards this Court's order permitting the sale, ignores
the bona fide purchaser status of the appellant, and violates the
principles of natural justice by passing the attachment without giving
any prior notice.
II. SUBMISSIONS ON BEHALF OF THE APPELLANT:
3. Learned counsel for the Appellant earnestly made the following
submissions in support of his contentions:
(i) The appellant contended that the impugned ad-interim order of
attachment under Section 3 of the OPID Act violates the principles of
natural justice, particularly the right to notice, as the attachment was
passed without any prior intimation to her by the Government of
Odisha, Finance Department.
(ii) The appellant submitted that the attachment order dated 23.03.2023 was
a post facto act, coming eight days after the appellant had purchased
the property from Opposite Party No. 2 on 15.03.2023, when the title
had already vested in her by virtue of the registered sale deed. The
Learned Designated Court below, by rejecting her petition, failed to
appreciate that property rights guaranteed under the Constitution of
India cannot be curtailed without affording the owner an opportunity
to be heard.
(iii) The appellant submitted that Section 3 of the OPID Act mandates that
certain preliminary conditions must be satisfied before attachment can
be imposed, namely that the property must belong to a financial
establishment, there must be default in returning deposits, and multiple
complaints must exist against the financial establishment. Only upon
satisfaction of these conditions can the Government proceed to attach
properties. In the present case, none of these conditions are met and
therefore the attachment imposed on the appellant's property is wholly
without legal foundation.
(iv) The appellant asserted that the Learned Designated Court erred in
holding that, because the order was ad-interim, compliance with
natural justice was unnecessary. This mechanical approach disregards
the appellant's constitutional rights and undermines the safeguard
provided under Article 300A of the Constitution.
(v) The appellant further submitted that no allegation has been made that
the transaction between her and Opposite Party No. 2 was a sham. She
purchased the property after specific permission had been granted by
this Court in FAO No. 99 of 2023, and any restriction imposed without
notice amounts to executive overreach and a vendetta against her,
curtailing her lawful property rights.
(vi) The appellant submitted that her petition before the Designated Court
under Section 151 CPC, read with Order 14 Rule 2 CPC, sought to frame
a preliminary issue regarding the applicability of the OPID Act to her
property, which was entirely ignored. The Learned Court's rejection of
the petition without addressing these submissions demonstrates a
mechanical approach, failing to meet the ends of justice and
disregarding the procedure mandated under the CPC.
III. SUBMISSIONS ON BEHALF OF THE RESPONDENTS:
4. The Learned Counsel for the Respondents earnestly made the following
submissions in support of his contentions:
(i) The appellant's challenge to the order dated 09.08.2023 passed in IA No.
0212023 by the Learned Designated Court has no merit. IA No. 0212023,
filed under Section 4(3) of the OPID Act by the ADM cum Competent
Authority, sought to make the ad-interim order of attachment dated
23.03.2023 of the Government of Odisha, Finance Department, final and
to authorize the sale of the property in auction for distribution among
depositors.
(ii) The appellant, though she claims to be a bona fide purchaser for value
of the schedule A property from Opposite Party No. 2 through
registered sale deed dated 15.03.2023, cannot circumvent the statutory
procedure. The Learned Designated Court rightly rejected her petition
observing that there is no provision to frame a preliminary issue at this
stage and that, under Section 9(5) of the OPID Act, the appellant is
required to establish her interest in the property on the date of
attachment through a show-cause notice.
(iii) The appellant's reliance on FAO No. 99 of 2023 is misplaced. The prior
order merely permitted Opposite Party No. 2 to sell properties not
under attachment, but the attachment in question was issued pursuant
to statutory powers under the OPID Act. At the time of attachment, the
property remained subject to the proceedings under the OPID Act, and
there was no allegation that the appellant is a financial establishment or
had procured the property from public deposits.
(iv) The questions raised by the appellant can only be finally determined
under Section 9 of the OPID Act after notice, show-cause, and trial. Any
attempt to pre-emptively quash the attachment constitutes an
impermissible mini-trial at this stage. Consequently, the appeal is
without merit and liable to be rejected.
IV. FINDINGS OF THE DESIGNATED COURT (OPID ACT), CUTTACK
5. Upon perusal of the submissions and relevant records, the Learned
Designated Court noted that the proceeding under Section 9 of the
OPID Act had been initiated following the filing of IA No. 02 of 2023 by
the ADM cum Competent Authority, Cuttack, for making the ad-
interim order of attachment absolute and directing the sale of the
properties by public auction for distribution of proceeds among the
depositors defrauded by the financial establishment.
6. It was observed that under Section 9(4) of the Act, if no cause is shown,
the Designated Court is required to pass an order making the ad-interim
attachment absolute and direct the sale of the property. Section 9(5)
further provides that if cause is shown or objections are filed, the
Designated Court shall proceed to consider and adjudicate the same,
following the procedure and exercising the powers of a civil court under
the Code of Civil Procedure, 1908. Any person making objections is
required to adduce evidence demonstrating that they had an interest in
the property on the date of attachment.
7. The Court held that there is no provision under Section 9 for framing
preliminary issues regarding jurisdiction or for outrightly quashing an
ad-interim order at this stage. It was noted that the appellant had simply
appeared without filing a proper show-cause application.
Consequently, the petition of Opposite Party No.3 was held to be
devoid of merit and was rejected. The Court also clarified that the
procedure under Section 9(5) would be followed once the parties file
their show-cause applications, and a proper inquiry would be
conducted to determine their respective interests in the attached
properties.
8. The Learned Designated Court found that the appellant's attempt to
seek quashing of the attachment without following the statutory
procedure was premature. The Court rejected the petition while making
it clear that the appellant would have the opportunity to establish her
interest in the properties through a show-cause application and
evidence at the appropriate stage as prescribed under the OPID Act.
V. COURT'S REASONING AND ANALYSIS:
9. Heard learned counsel for the parties and perused the material on
record.
10. The present appeal arises from the order dated 09.08.2023 passed by the
Learned Designated Court under the Odisha Protection of Interests of
Depositors (In Financial Establishments) Act, 2011, whereby the Court
did not consider the petition filed by the appellant under Section 151
read with Order 14 Rule 2 of the Code of Civil Procedure, 1908, seeking
to quash the ad-interim order of attachment passed under Section 3 of
the OPID Act.
11. The core issue that falls for consideration in the present appeal is
whether the High Court ought to interfere at this stage, when
proceedings are still pending before the Designated Court for
confirmation of the ad-interim attachment under Section 9 of the OPID
Act.
12. Upon a careful reading of the provisions of the OPID Act, it becomes
evident that the statute provides a complete and self-contained
mechanism for attachment and adjudication of properties alleged to be
linked with defaulting financial establishments.
13. Section 3 empowers the Government to provisionally attach properties
of a financial establishment upon satisfaction of certain conditions, and
Section 9 prescribes the subsequent procedure before the Designated
Court. Under sub-section (5) of Section 9 of the OPID Act, where cause
is shown or any objection is raised to the ad-interim order of attachment,
the Designated Court is required to consider and adjudicate the same,
and in doing so, it shall, subject to the provisions of the Act, follow the
procedure and exercise all the powers of a civil court under the Code of
Civil Procedure, 1908. Any person raising such objection is required to
adduce evidence to demonstrate that, on the date of attachment, they
had an interest in the property attached.
14. In the present case, it is undisputed that the Finance Department passed
an ad-interim order of attachment under Section 3 of the OPID Act, and
the Competent Authority has since instituted proceedings before the
Designated Court in I.A. No. 2 of 2023 for making the said attachment
absolute. The appellant, having purchased the property in question by
a registered sale deed dated 15.03.2023, appeared before the Designated
Court and filed a petition under Section 151 CPC read with Order 14
Rule 2 CPC, seeking quashing of the ad-interim attachment itself. The
Learned Designated Court, however, declined to entertain that petition,
observing that such objections must be raised and adjudicated in the
course of the statutory proceedings under Section 9.
15. The respondents have contended that the appeal is premature and that
the High Court's interference at this stage would disrupt the statutory
procedure established under the OPID Act. It was urged that the
Designated Court has not yet completed the inquiry under Section 9(5),
and the appellant retains a full opportunity to establish her ownership
and bona fide purchase through evidence before that forum. It was
further contended that the appellant's attempt to invoke general civil
procedure provisions is impermissible when the special statute
provides a distinct framework for adjudication.
16. Having considered the rival submissions, this Court finds substance in
the respondents' contention. The OPID Act is a special enactment
designed to safeguard the interests of depositors who have been
defrauded by financial establishments. It lays down a specific
mechanism for attachment and investigation, ensuring a balance
between the rights of depositors and third parties claiming interest in
the property. When a statute prescribes a detailed procedure for
determination of such issues, it is a well-settled principle that recourse
must be had to the procedure so prescribed, and interference at an
intermediate stage by invoking general civil law principles is ordinarily
unwarranted.
17. The question raised by the appellant, that she is a bona fide purchaser
for value and that the property was not part of any attached asset at the
time of sale, is essentially a mixed question of fact and law. These are
matters which the Designated Court is statutorily empowered to
consider and adjudicate under Section 9(5) of the Act. This Court,
therefore, is not inclined to interfere at this stage while the statutory
process remains pending.
18. At the same time, this Court recognises that if the appellant's claim of
prior purchase and the absence of notice before attachment is correct,
any final sale or auction of the property at this stage could cause
irreparable harm. Accordingly, while declining to interfere with the
impugned order at present, it is necessary to ensure that the appellant's
rights are protected and preserved pending adjudication by the
Designated Court.
VI. CONCLUSION:
19. Accordingly, this Court directs that the impugned order dated
09.08.2023 passed by the Learned Designated Court shall not be
interfered with at this stage.
20. The appellant is at liberty to file a detailed show-cause under Section
9(5) of the OPID Act within four weeks from the date of receipt of this
order. The Designated Court shall decide the show-cause in accordance
with law, after affording due opportunity to all parties to adduce
evidence.
21. Pending such adjudication, the respondents are directed to maintain
status quo in relation to the property in question, and no coercive steps
by way of sale, auction, or transfer shall be taken until the Designated
Court finally decides the matter.
22. The Designated Court is requested to conclude the proceedings
expeditiously and to pass a reasoned order. It is made clear that this
Court has not expressed any opinion on the merits of the respective
claims, and all contentions of the parties are left open to be urged before
the Designated Court.
23. The appeal is accordingly dismissed, subject to the appellant's right to
file a show-cause and participate in the proceedings under Section 9(5)
of the OPID Act.
24. Interim order, if any, passed earlier stands vacated.
(Dr. Sanjeeb K Panigrahi)
Judge
Orissa High Court, Cuttack,
Dated the 17th October, 2025
