The Supreme Court, in State vs KS Palanichamy, has upheld the state government’s power to issue ad interim order under Section 3 of the Tamil Nadu Protection of Interests of Depositors (In Financial Establishments) Act, 1997, attaching the immovable properties belonging to a financial establishment which defaults in returning deposits after maturity or fails to pay interest on deposit or fails to provide any service for which the deposit has been made, basing on the complaint of investors. A bench comprising Justice NV Ramana and Justice Prafulla C Pant set aside a Madras High Court order which, while setting aside the GO, observed that before passing an order under Section 3 of the Act, the government has to take steps under Section 4 of the Act by identifying the properties. The court observed that the state of Tamil Nadu had enacted the statute to protect the interest of innocent investors, curb the malady of financial swindlers and to deal with such problems effectively. “It ...