Allowed

R.Subramanian v. the Reserve Bank of India

Madras HC24 Mar 2023WP/14577/1999

Case brief

AI extract

What is this about?

In a writ petition filed under Article 226, the petitioner, a depositor, sought a direction to appoint a custodian for the sick Alwarpet Benefit Fund Ltd., which had defaulted. The Court observed that judicially appointed administrators lack financial expertise and that the High Court cannot monitor a writ petition for 23 years. It directed the District Revenue Officer, as the Competent Authority

What did the court decide?

The District Revenue Officer, Chennai is directed to take charge of Alwarpet Benefit Fund Ltd. and initiate actions under the 1997 Act.

R.Subramanian Vs the Reserve Bank of India — Pension and Retirement Benefits | Madras HC (2023)

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WP No.14577 of 1999

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 24-03-2023

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CORAM

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THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM

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WP No.14577 of 1999 and

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WPMP Nos.42 of 2013 and 2718 of 2023

R.Subramanian

... Petitioner

Vs.

1.The Reserve Bank of India, Constituted under the RBI Act, 1934, having its Regional Office at Rajaji Salai, Chennai-600 001.

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2.The Secretary,

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Ministry of Law and Company Affairs, Government of India, Sashtri Bhavan, New Delhi.

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3.The Regional Director, Southern Region, Department of Company Affairs, Ministry of Finance,

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https://www.mhc.tn.gov.in/judis

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WP No.14577 of 1999

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Government of India, Shastri Bhavan, Block No.I, 5^th Floor, 26, Haddows Road, Chennai-600 006.

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4.The Secretary, Ministry of Finance, North Block, New Delhi.

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5.Alwarpet Benefit Fund Ltd., Represented by its Chairman and Managing Director, Mr.K.SP.B.Shanmugam, 36, C.P.Ramasamy Road, Alwarpet, Chennai-600 018.

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6.K.SP.B.Shanmugam

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7.Mr.V.Harshavardan

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8.Mr.N.Mahesh

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9.Mr.N.Namasivayam

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10.Mr.C.Muthusamy

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11.The Company Law Board, South Regional Branch, Shastri Bhavan, Chennai Represented by its Regional Manager.

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12.Mrs.S.Unnamalai

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WP No.14577 of 1999

13.S.Vishnuvaradhan

14.Mrs.S.Iswarya

15.Mrs.Nachiammal

16.Mrs.Saroja

17.M/s.Sreenidhi Foundation, 14, 4^th Cross Street, R.K.Nagar, Chennai-28.

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18.Mr.K.Arunachalam

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19.Ramaniam Real Estates Ltd., Represented by its Managing Director V.Jagannathan, Sruthill 2^nd Main Road, Gandhi Nagar, Chennai-20.

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20.Standard Chartered Grindlays Bank, Haddows Road, Chennai-6.

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21.B.B.Mastan Rao

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22.Moolchand Finance Ltd., No.31/32, Commander-in-Chief Road, Egmore,

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Chennai-8.

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23.Moolchand Properties Ltd., 100/2A, Suvarna Darshan, 2^nd Main Road, Gandhi Nagar, Adyar, Chennai-20.

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WP No.14577 of 1999

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24.KDH Properties Ltd., Represented by the Director Mr.P.Thangarajan, 100/2A, Suvarna Darshan, 2^nd Main Road, Gandhi Nagar, Adyar, Chennai-20. [R-24 impleaded vide order of Court dated 03.07.2008 made in WPMP No.469 of 2008 in WP 14577/1999]

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25.Senior Manager, Central Bank of India, Kalapatti Branch, No.7/25, Avinashi Road, Coimbatore.

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[R-25 impleaded vide order of Court dated 03.07.2008 made in MP No.9 of 2008]

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26.The Branch Manager, Corporation Bank, Madikeri Branch, Karnataka State. [R-26 impleaded vide order of Court dated 09.03.2010 made in WPMP No.203 of 2010 in WP 14577/1999]

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27.The Recovery Officer II, Debts Recovery Tribunal, Krishi Bhavan, Hudson Circle, Nrupthunga Road, Bangalore-1.

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WP No.14577 of 1999

28.Vasudevarao

29.J.P.Builders,

Represented by its Proprietor Sri J.Paramanandam, J.R.Towers, No.7/2, Nungambakkam High Road, Chennai-600 034.

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30.K.Ramesh

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31.K.Mahesh

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32.The Chief Manager and Authorised Officer, Allahabad Bank, Adyar Branch, No.19, 1^st Street, Padmanaba Nagar, Adyar, Chennai-600 020.

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[Respondents 28 to 32 impleaded vide order of Court dated 13.09.2011 made in WPMP No.537 of 2011 in WP 14577/1999]

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33.Ponni Plantations, Koppa Represented by its Partners

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(i) Mrs.K.Premalatha Hegde and

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(ii) Mrs.Ramitha Both are residing at Alankar, Ajjarkad, Udupi-576 101.

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34.Ramitha

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[R-33 and R-34 impleaded vide order of Court dated 06.01.2012 made in WPMP 626 of 2011 in WP 14577/1999]

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... Respondents

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WP No.14577 of 1999

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Prayer: Writ Petition filed under Article 226 of the Constitution of India for issuance of a Writ of Mandamus, directing the first respondent to appoint a fit and proper person as custodian or Special Officer for taking immediate control and possession of all the assets and properties both movables and immovables and securities and pay the depositors their original due. For Petitioner : Mr.M.A.Abdul Wahab For Respondent-1 : Mr.Sathiya Narayanan For Respondents-2to4 : Mr.J.Madana Gopal Rao, Senior Panel Counsel. For Respondent-5 : Mr.R.Bharath Kumar For Respondents-6 to 12 and 14 to 17 : No Appearance For Respondent-13 : Ms.M.Meena Rukmani For Respondent-21 : Mr.Ranga Rajan For Respondent-27 : Mr.S.Sethu Raman For Respondent-33 : Mr.A.Uma Sankar For Respondents-18 to 20, 22 to 26, 28 to 32 and 34 : Not Ready in Notice

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WP No.14577 of 1999

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O R D E R

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The relief sought for in the present writ petition is to direct first respondent to appoint a fit and proper person as Custodian or Special Officer for taking immediate control and possession of all the assets and properties both movables and immovables and securities and pay the depositors their original dues.

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The petitioner is one of the depositor in the fifth respondentM/s.Alwarpet Benefit Fund Ltd. Since the fifth respondent-Alwarpet Benefit Fund Ltd., committed default in repayment of deposit amount, the depositors filed criminal complaint, which was registered and is pending as of now.

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The investigation is now pending on the Economic Offences Wing of the Police Department.

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WP No.14577 of 1999

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The present writ petition is filed seeking a direction to appoint a fit and proper person as Custodian or Special Officer for taking immediate control and possession of all the assets and properties both movables and immovables and securities and pay the depositors their original dues.

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The writ petition was filed in the year 1999 and it is pending for the past 23 years. Three retired Hon'ble Judges of this Court one after the another were administering the affairs of M/s.Alwarpet Benefit Fund Ltd. After the death of those retired Hon'ble Judges of this Court, at present, the Manager of the M/s.Alwarpet Benefit Fund Ltd., is looking after the administrative affairs. The last Administrator, who was a Retired Official from the TNSC Bank, also died on 04.11.2022. Thereafter, the Manager of M/s.Alwarpet Benefit Fund Ltd., has taken charge of the administration.

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The learned counsel for the petitioner appointed by the Court made a submission that 25% of the dues to the depositors are yet to be settled. Properties are available, which all are to be dealt with. Now Alwarpet Benefit Fund Ltd., is falling within the ambit of the provisions of

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WP No.14577 of 1999

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the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act), 1997.

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The practice of appointing Administrator of Financial

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Establishments by the High Court may not be appropriate in view of the fact that an Expertise in financial business is required. Hon'ble Judges are not Experts in the field of Financial Establishments and the Government has to take over such Establishments and appoint the Competent Authorities to deal with the affairs of such Financial Establishments falling sick. More-so, the High Court cannot monitor the progress through Administrators appointed by the High Court for longer time and it is not preferable also.

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In the present case, the Three Hon'ble Judges appointed were

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died one after another and still M/s.Alwarpet Benefit Fund Ltd., is unable to repay the amount due to the depositors. The experience have shown that High Court appointed Administrators are unable to run the Financial Establishments to the satisfaction of the creditors and the members.

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The present writ petition is pending for the past about 23

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WP No.14577 of 1999

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years. The High Court cannot monitor the day-today affairs of such Financial Establishments by keeping the writ petition pending for several years. Thus, this Court is of the considered opinion that the Competent

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Authorities of the Government under the Statute must be allowed to administer such Sick Institutions in the manner contemplated. It would be easy for the Courts to fix the responsibility and accountability of such Governmental Authorities in the matter of dealing with the members and the aggrieved depositors of M/s.Alwarpet Benefit Fund Limited.

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Considering the fact that no Administrator as of now is functioning to look after the affairs of the fifth respondent-Alwarpet Benefit Fund Ltd., this Court is inclined to direct the Competent Authority under Section 4 of the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act), 1997, i.e., the jurisdictional District Revenue Officer, Chennai, who in turn shall initiate all necessary action under the provisions of the Statutes and the Rules to settle the dues to the depositors and other dues, if any in the manner known to law.

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The Jurisdictional District Revenue Officer, Chennai

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WP No.14577 of 1999

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District is directed to take charge of the fifth respondent-Alwarpet Benefit Fund Limited with immediate effect and take over the assets and liabilities, both movables and immovables, records etc., and thereafter initiate all appropriate actions by following the procedures as contemplated under the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act), 1997, by referring the disputes before the Special Courts constituted.

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The fifth respondent-Alwarpet Benefit Fund Limited now being managed by the Manager, is directed to hand over the entire charge including records, documents, salary, property details etc., to the jurisdictional District Revenue Officer of Chennai District, within a period of four weeks from the date of receipt of a copy of this order. If any clarification is required or difficulty arises to the District Revenue Officer, Chennai District, he is at liberty to approach this Court for any further or appropriate orders.

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With the abovesaid directions, the writ petition stands

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WP No.14577 of 1999

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disposed of. However, there shall be no order as to costs. Consequently, the connected miscellaneous petitions are closed.

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The Registry is directed to communicate the copy of this order to the District Collector, Chennai District and to the District Revenue Officer, Chennai District.

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24-03-2023

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Index : Yes/No Internet: Yes/No Speaking order/Non-Speaking order Neutral Citation : Yes/No Svn To

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1.The Reserve Bank of India, Constituted under the RBI Act, 1934, having its Regional Office at Rajaji Salai, Chennai-600 001.

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2.The Secretary, Ministry of Law and Company Affairs, Government of India, Sashtri Bhavan, New Delhi.

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3.The Regional Director, Southern Region, Department of Company Affairs, Ministry of Finance,

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WP No.14577 of 1999

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Government of India, Shastri Bhavan, Block No.I, 5^th Floor, 26, Haddows Road, Chennai-600 006.

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4.The Secretary, Ministry of Finance, North Block, New Delhi.

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5.The Regional Manager. Company Law Board, South Regional Branch, Shastri Bhavan, Chennai.

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6.The Senior Manager, Central Bank of India, Kalapatti Branch, No.7/25, Avinashi Road, Coimbatore.

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7.The Branch Manager, Corporation Bank, Madikeri Branch, Karnataka State.

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8.The Recovery Officer II, Debts Recovery Tribunal, Krishi Bhavan, Hudson Circle, Nrupthunga Road, Bangalore-1.

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S.M.SUBRAMANIAM, J.

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Svn

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WP No.14577 of 1999

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9.The District Collector, Chennai District.

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10.The District Revenue Officer, Chennai District.

WP 14577 of 1999

24-03-2023

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https://www.mhc.tn.gov.in/judis

R.Subramanian v. the Reserve Bank of India

Case brief

What is this about?

What did the court decide?

R.Subramanian v. the Reserve Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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