Financiers properties can be attached for duping investors:SC

The apex court said such a legislation was constitutionally valid and not repugnant to the Reserve Bank of India rules or the Companies Act as it was a welcome measure in view of thousands of such cases being reported in the country.

"We are of the opinion that the act of the financiers in exploiting the depositors is a notorious abuse of faith of the depositors who innocently deposited their money with the former for higher rate of interest.

"The impugned Tamil Nadu Act is constitutionally valid. In fact, it is a salutary measure which was long overdue to deal with these scamsters who have been thriving like locusts in the country," a bench of justices Markandeya Katju and Gyan Sudha Mishra said in a judgement.

The apex court passed the judgement while dismissing the appeal filed by some financiers challenging the constitutional validity of the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997, (in short the Tamil Nadu Act) which among other things enabled the government to attach the properties of such fraudulent companies to recover the depositors money.