HC reserves order on TN Depositors Act

Chennai, Nov 28 (UNI) Madras High Court today reserved orders on a batch of petitions challenging the constitutional validity of the Tamil Nadu Protection of Interests of Depositors (in financial establishment) Act, 1997.

A three-member bench comprising Justices P D Dinakaran, P P S Janarthana Raja and K Chandru reserved orders on over 150 petitions, after hearing elaborate arguments from both sides.

Earlier, a single judge of the Madras High Court had upheld the validity of the Act.

Subsequently several petitions were filed, challenging the same Act and considering the seriousness of the issue, the cases were posted before the specially constituted three-member bench.

The petitions from individuals and finance firms cited a 2004 order of a full bench of the Bombay High Court, which struck down a similar Act of the Maharashtra Government.

The Tamil Nadu government had submitted that the Act was well within the legislative competence of the state. It said the failure of financial firms in repaying matured deposits and interest had caused public protest in several places, prejudicing public order.

Therefore, unless it was a special Act, it would be difficult to deal with financial institutions, which siphoned off public money.

UNI XR AJ LL MSJ BD1942