Orissa High Court
Case Details
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) For Respondent (s) : : Smt. Sujata Jena, Adv. 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:
Facts
2. The brief facts of the case are as follows: (i)
Legal Reasoning
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. Page 1 of 11 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Oct-2025 18:58:02 (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 Page 2 of 11 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Oct-2025 18:58:02 II. 3. (i) principles of natural justice by passing the attachment without giving any prior notice. SUBMISSIONS ON BEHALF OF THE APPELLANT: Learned counsel for the Appellant earnestly made the following submissions in support of his contentions: 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 Page 3 of 11 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Oct-2025 18:58:02 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. (i) The Learned Counsel for the Respondents earnestly made the following submissions in support of his contentions: 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 Page 4 of 11 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Oct-2025 18:58:02 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. Page 5 of 11 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Oct-2025 18:58:02 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 Page 6 of 11 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Oct-2025 18:58:02 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. 10. Heard learned counsel for the parties and perused the material on record. 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 Page 7 of 11 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Oct-2025 18:58:02 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 Page 8 of 11 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Oct-2025 18:58:02 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. Page 9 of 11 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Oct-2025 18:58:02 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. 20. 21. 22. 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. 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. 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. 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. Page 10 of 11 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Oct-2025 18:58:02 23. 24. 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. Interim order, if any, passed earlier stands vacated. (Dr. Sanjeeb K Panigrahi) Judge Orissa High Court, Cuttack, Dated the 17th October, 2025 Page 11 of 11