High Court · 2025

W.P.Crl.No.678 of 2025IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 25.09.2025CORAM:THE HONOURABLE MR.JUSTICE N. SATHISH KUMARW.P.Crl.No.678 of 2025and WPMP.Nos.315 to 317 of 20251. Ravikumar 2. R.Renuka ... Petitioners Versus1. The Deputy Superintendent of Police, Economic Offences Wing, Chennai – 600 083 2. The Sub Registrar – Adyar No.161, (71/6) L.B.Road, Dr.Muthulakshmi Salai, TNHB Building, 3rd Floor, Tiruvanmiyur, Chennai – 600 041 3. Housing Development Finance Corporation (HDFC) Ltd.,, Rep. By its Nodal officer 2nd Floor, ITC Center, 76, Anna Salai, Chennai – 2 ... Respondents PRAYER: Writ Petition is filed under Article 226 of Constitution of India, pleased to issue a Writ of Certiorarified Mandamus, calling for the records in O.A.No.25/2025 issued by the 1st respondent pending on the file of the Special Court under Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997 (TNPID), Chennai and to quash the same against the petitioners. For Petitioner : Mr.Sanjay Pinto________Page 1 of 8 https://www.mhc.tn.gov.in/judis W.P.Crl.No.678 of 2025For Respondents : Mr.KMD.Muhilan for R1 & R2 Additional Public Prosecutor Mr.C.Mohan and Ms.A.Rexy Josephine Mary for King & Patridge for R3ORDERThe petitioner challenges the proceedings initiated under O.A.No.25 of 2025 by the first respondent pending on the file of the Special Court under Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997 (TNPID), Chennai and seeks to quash the same. 2. The grievance of the petitioners is that they have purchased the property from one K.Vasu by raising loan from Housing Development Corporation Ltd on 15.11.2017. A criminal case has been pending under Section 5 of the TNPID Act, 1997 and other IPC offences against the said K.Vasu and others in Cr.No.12/2017 on the file of the first respondent for allegedly collecting chit funds amounts from various subscribers and defaulted payments to the subscribers. According to the prosecution, huge amount of Rs.220 crores is collected from 9,927 depositors and failed to return the deposited amount. During the investigation, certain properties in the name of accused were attached by way of attachment under G.O.Ms.No.73, Home (Police XIX) Department dated 31.01.2019 and other G.O.Ms.No. 1049, Home (Courts IIA) Department, dated 26-08-2004. Now, ________Page 2 of 8 https://www.mhc.tn.gov.in/judis W.P.Crl.No.678 of 2025the case is pending before the Special Court. 3. Counter affidavit has been filed by the first respondent stating that the accused has malafidely transferred the property purchased out of the deposits by the subscribers. One such transfer made by the A5 in favour of the writ petitioners herein is to an extent of 2326 sq.ft. The transfer was not only made in favour of the petitioner but also in favour of various third parties, therefore, application has been filed for attachment of the property before the Special Court under Section 8 of the TNPID Act, 1992 and for orders to sell the property under Section 7(6) of the TNPID Act. Now, notice has been issued by the Special Court against the petitioners. 4. It is the contention of the learned counsel for the petitioners that they have bonafidely purchased the property by raising loan from the HDFC Bank, 100% loan has been raised for purchase of the property. The so-called vendor A-5 while also while purchasing the property had raised a loan from the Karnataka Bank and had executed MoDT dated 09.12.2016, therefore, the contention of the prosecution that the vendor has purchased the property out of deposits collected from the public is misconceived and in fact, their vendor has purchased the property by raising the bank loan and the same is ________Page 3 of 8 https://www.mhc.tn.gov.in/judis W.P.Crl.No.678 of 2025evident from the registered document. Therefore, at no stretch of imagination, it can be held that there was malafide transfer in favour of the petitioners. Hence, seeks to quash the entire proceedings. 5. Counter is filed by the first respondent stating that proceedings have been initiated and the properties of the accused has already been attached by interim attachment, now, the petition is also filed under Section 8 of the TNPID Act.6. Heard both sides and perused the materials placed on record. 7. It is relevant to note that when a case is filed under the TNPID Act, normal procedure would be for attachment of the properties of the defaulter in order to return the deposits. Initially, under Section 3, Government will pass an order of interim attachment over the properties to protect the interest of the depositors. Thereafter, competent authority under Section 4 shall file necessary application within a period of 30 days of the order passed under Section 3 for making ad-interim order of attachment absolute and for a direction to sell the property so attached by way of public auction, and realise the sale proceedings. Section 8 of the Act deals with attachment of ________Page 4 of 8 https://www.mhc.tn.gov.in/judis W.P.Crl.No.678 of 2025property of malafide tranferees. 8. Section 8 of the TNPID Act, enumerates that “where the assets available for attachment of a Financial Establishment or other person referred to in Section 3 are found to be less than the amount or value which such Financial Establishment is required to repay to the depositors and where the Special Court is satisfied by affidavit or otherwise, that there is reasonable cause for believing that the said Financial Establishment has transferred, (whether after the commencement of this Act or not), any of the property otherwise than in good faith and for consideration the Special Court may, by notice, require any transferee of such property (whether or not he received the property directly from the said Financial Establishment) to appear on a date to be specified in the notice and show cause why so much of the transferee's property as is equivalent to the proper value of the property transferred should not be attached”. If the Special Court is of the view that the property was transferred not in a good faith, then the Special Court can pass order of attachment. Therefore, before passing the order of attachment, the Special Court should come to the conclusion that there was no good faith in transfer. Further, it has to be established that the transfer has been made by the financial establishment or any other members of the ________Page 5 of 8 https://www.mhc.tn.gov.in/judis W.P.Crl.No.678 of 2025institution malafidely9. From the records placed before this Court, it would reveal that the petitioners have purchased the property on 15.11.2017 by raising 100% loan from the HDFC Bank. Similarly, the vendor namely one K.Vasu who is arrayed as A5 in the said case while purchasing the property on 09.12.2016, he had also raised a loan to the tune of Rs.1.73 crores and the property has been purchased for 2.4 crores by him and maximum amount has been availed as a loan. In this regard, a registered MoDT is also executed by K.Vasu in favour of Karnataka Bank on 09.12.2016. The above would clearly indicate that the entire consideration is not from any deposits, in fact, loan has been raised, therefore, this Court is the view that transfer made by such persons cannot be construed as malafide transfer. The petitioners who have purchased the property by availing loan and the transfer in favour of the petitioners should be construed as only transferred in good faith. Therefore, this has to be kept in mind while deciding the application as against the petitioners by the Special Court and the said application shall be disposed of within a period of two months from the date of recipt of a copy of this Order. 10. Accordingly, this petition stands disposed of. No costs. ________Page 6 of 8 https://www.mhc.tn.gov.in/judis W.P.Crl.No.678 of 2025Consequently, connected miscellaneous petitions stand closed. 25.09.2025dhkIndex :Yes/NoInternet:Yes/NoTo1. The Deputy Superintendent of Police, Economic Offences Wing, Chennai – 600 083 2. The Sub Registrar – Adyar No.161, (71/6) L.B.Road, Dr.Muthulakshmi Salai, TNHB Building, 3rd Floor, Tiruvanmiyur, Chennai – 600 041 ________Page 7 of 8 https://www.mhc.tn.gov.in/judis W.P.Crl.No.678 of 2025N. SATHISH KUMAR, J.dhk3. The Public ProsecutorMadras High Court 4.The Special CourtTamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997 (TNPID), ChennaiW.P.Crl.No.678 of 202525.09.2025________Page 8 of 8