TMI Blog2021 (9) TMI 665X X X X Extracts X X X X X X X X Extracts X X X X ..... nated Court - As per sub-section (2) of Section 4, upon publication of the order under sub-section (1), all properties and assets of the financial establishment shall forthwith vest in the competent authority appointed by the Government pending further order from the Designated Court. In an affidavit-in-reply, dated 16th April 2019, filed on behalf of the Government, it is pointed out that the Director of Institutional Finance as well as the office of the District Magistrate Collectors and Sub-Divisional Magistrates had received many complaints from depositors against the petitioner-company of making short payment of maturity amount or non-payment of the invested amount. Some of the complaints are annexed with the said affidavit - It is also stated that the Sub-Divisional Magistrate had issued an interim order, on 12th June 2013, restraining the company from accepting deposits from the public. It is further stated that after receiving the reports of the District Magistrates Collectors and Superintendent of Police of the districts, the Principal Secretary, Finance, Government of Tripura, has issued the impugned notification. It was after perusal of such voluminous material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al properties of the petitioner-company. The petitioner has also prayed for a direction to the respondents to protect the attached moveable and immovable properties till appropriate orders are passed by the designated Court. The third prayer made by the petitioner is for carrying out the valuation of the properties which valuation may be produced before the Court. [2] Brief facts are as under : Petitioner as a company registered under Companies Act, 1956 and is engaged in the business of hospitality related industry in the name of Rose Valley Hotels and Entertainment Ltd. In the course of its business, the petitioner company had received deposits from several individuals. The petitioner had also acquired immoveable properties from such deposits. The petitioner had established an amusement park in the vicinity of the city of Agartala. The business activities of the company, however, ran into several legal disputes. A detailed reference would be made to some of these disputes at a later stage. For the moment, it may be noted that initially Securities and Exchange Board of India (SEBI) found it objectionable that the company was accepting deposits and acting like a Non-Banking F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so is that proceedings are pending before different Designated Courts. The question of valuation, therefore, cannot be gone into right now in the writ petition. Let the Designated Courts take appropriate steps as found necessary. [5] Appearing for the petitioner learned senior counsel Mr. Majumder reiterated the stand taken by the petitioner in the petition and submitted that the impugned order be set aside since it does not record reasons which is a mandatory requirement of the statute. Even otherwise, there was no material before the authority to be satisfied that such action was necessary. He drew my attention to various documents on record to canvass that the Stateauthorities had not taken sufficient steps to protect the properties. Such negligence would harm the depositors. [6] On the other hand, learned Government Advocate Mr. Debalaya Bhattachariya opposed the petition contending that there was ample material before the authority to pass the impugned order. He placed before me the original file leading to issuance of the impugned notification which I had perused with the consent of the counsel for the petitioner. (I had offered to share with him the documents which I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of such Financial Establishments, after recording reasons in writing, issue an order by publishing it in the Official Gazette, attaching the money or other property believed to have been acquired by such Financial Establishment either in its own name or in the name of any other person from out of the deposits by the Financial Establishment, or if it transpires that such 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 the promoter, Director, partner or manager or member of the said Financial Establishment, as the Government may think fit. (2) On the publication of the order under sub-section (1) all the properties and the assets of the Financial Establishment and the persons mentioned therein shall forthwith vest in the Competent Authority appointed by the Government pending further order from the Designated Court. (3) The Collector of a District shall be competent to receive the complaints from his District under Sub-Section (1) and shall forward the same together with his report to the Government at the earliest and shall send a copy of the complaint als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an intention to defraud the depositors and the Government is satisfied that the establishment is not likely to return the deposits or make payment of the interest etc., in order to protect the interest of the depositors after recording reasons in writing issue an order attaching the money or property believed to be of the financial establishment. As per sub-section (2) of Section 4, upon publication of the order under sub-section (1), all properties and assets of the financial establishment shall forthwith vest in the competent authority appointed by the Government pending further order from the Designated Court. [15] In this context, let us see the material considered by the Government before issuing the impugned notification. In an affidavit-in-reply, dated 16th April 2019, filed on behalf of the Government, it is pointed out that the Director of Institutional Finance as well as the office of the District Magistrate Collectors and Sub-Divisional Magistrates had received many complaints from depositors against the petitioner-company of making short payment of maturity amount or non-payment of the invested amount. Some of the complaints are annexed with the said affidavit. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of not returning the deposits on maturity, copies of which have been produced by the respondents in the above noted affidavit, were received by the company after this prohibitory order also. [17] The original file also contains a detailed order passed by SEBI, on 3rd January 2011, in which after taking note of various activities of the company and hearing the representatives of the company the SEBI concluded that the company was engaged in various irregular activities. SEBI therefore, passed a prohibitory order directing the company not to collect any money from investors or to launch any scheme, not to dispose of any of the properties or delineate assets and not to divert any fund raised from the public kept in the Bank account or which is in the custody of the company. [18] Original file of the Government also contains various reports made by the District Collectors. For example, we have on record a report-cum-proposal of the District Collector, Sipahijala, dated 19th December 2016, pointing out that a letter of the Superintendent of Police, Tripura, was received regarding proposal for attachment of property due to cheating of the large amount of public money. A notice was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Superintendent of Police that it was reported to him that valuable articles inside the Rose Valley Park premises are being regularly stolen and the sub-divisional administration was worried about the encroachment on the said properties in future also. He, therefore, requested the police authorities to provide adequate security and to keep vigil. On 1st November 2017, Sub-Divisional Magistrate, West Tripura, wrote to the Sub-Divisional Police Officer(SDPO) and conveyed to him that the filed functionaries during their visit at the Rose Valley office building have found some unclaimed goods which are lying in front of the main gate which was later seized by the police. He requested that necessary arrangements for placing the guards around the property may be made. [21] We may recall, the impugned notification was issued on 19th January 2017. When the District Magistrate and Sub-Divisional Magistrate were writing to police authorities on 22nd June 2017 and 1st November 2017, there was substantial time lapse between the issuance of the notification and the letters urging the police authorities to take protective measures. In the letter dated 22nd June 2017, it was conveyed that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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