Depositor protection statute does not bar an individual recovery suit at filing stage; civil court must register it.

The Tamil Nadu Protection of Interests of Depositors in Financial Establishments Act, 1997 was construed as a depositor-protection statute that operates through government action, attachment of property and reference to the Special Court after the statutory machinery is triggered. On that reading, an individual suit for recovery of money against a private finance establishment is not barred at the threshold, and the civil court must entertain and register it. Section 6 becomes relevant only if proceedings are later required to be transferred after attachment and entrustment to the competent authority.

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Issues: Whether the suit for recovery of money from a private finance establishment was barred by the Tamil Nadu (Protection of Interests of Depositors in Financial Establishments) Act, 1997, and whether the civil court was bound to refuse registration of the suit.

Analysis: The Act was construed as a protective measure for depositors and as one that contemplates governmental action upon receipt of complaints from multiple depositors or upon reason to believe that the financial establishment is defaulting in a calculated manner. The scheme of the Act, particularly sections 3 and 4, was read as operating after attachment of property and entrustment of the matter to the competent authority, which then applies to the Special Court. The Court held that the Act does not prohibit the institution of a suit by an individual at the threshold, and that the Special Court would come into play only after the statutory machinery is set in motion. Section 6 was noted as relevant only if proceedings are later required to be transferred after attachment and entrustment.

Conclusion: The suit was not barred at the stage of institution, and the civil court was required to entertain and register it. The revision petitioner succeeded.

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