HC upholds Constitutional validity of Depositors Act

Chennai, Mar 3 (UNI) Madras High Court today upheld Constitutional validity of the Tamil Nadu Protection of Interest of Depositors (In Financial Establishment) (TNPID) Act, 1997.

The Full Bench comprising Justices P D Dinakaran, P P S Janarthana Raja and K Chandru upheld the TNPID Act while dismissing a batch of petitions from S Bhagawathi and 100 others, seeking to declare the Act as unconstitutional and ultra vires the Constitution.

In its order, the Bench said when the competent authority initiated action against financial establishments or other persons to achieve the awesome objects of the TNPID Act, the same were challenged on the grounds that the impugned Act was unconstitutional.

''Since we declared the TNPID Act does not suffer any legislative incompetency, nor its provisions are arbitrary and unreasonable, all the petitions are dismissed, the Bench said.

''Consequently, the Special Court shall proceed to enforce law,'' the Bench added.

In so far as the writ petition, challenging the attachment proceedings taken and criminal action initiated as well as the civil appeals arising out of the orders of the Special Court are concerned, as the provisions of TNPID act are held valid, ''we do not want to interfere with such proceedings,'' the Bench said.

The law was challenged by financial establishments in a batch of petitions on the grounds that it was draconian, excessively harsh and lacked legislative competency. Hence liable to be struck down for violation of principles of natural justice and ultra vires the Constitution.

However, a single judge had upheld the Constitutional validity of the Act.

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