Investor claim recovery through court-supervised committee, with asset restraints and pro rata distribution, while criminal proceedings continue.

A court-supervised mechanism was used to identify depositors, ascertain and value properties, realise assets through sale, and distribute proceeds under the statutory framework governing deposit-taking establishments. A multi-disciplinary committee was constituted with authority to engage professionals, invite claims, and supervise the recovery process, reflecting the need for structured administration of a large investor-claim exercise. The order also preserved the criminal process: the FIR and criminal proceedings were kept alive, alienation of properties was restrained except through the committee, and periodic disclosure and cooperation were required. Any shortfall in realised funds was to be met through pro rata distribution among claimants.

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Issues: (i) Whether a committee could be constituted to identify the investors, ascertain and value the properties, realise funds by sale of properties, and supervise distribution of the amounts due under the statutory framework governing deposit-taking establishments; (ii) Whether the proceedings under the criminal law and the FIR should remain alive, while restraining alienation of the properties and keeping the matter under continued supervision.

Issue (i): Whether a committee could be constituted to identify the investors, ascertain and value the properties, realise funds by sale of properties, and supervise distribution of the amounts due under the statutory framework governing deposit-taking establishments.

Analysis: The order proceeds on the basis that the statutory scheme permits attachment of properties, transfer of control to the competent authority, and, where necessary, equitable distribution of realised amounts among depositors. It records that, before filing of a charge sheet, the competent authority may work within the statutory framework, and that the task of identifying investors, identifying properties, valuing the lands and realising monies was too large to be handled without a structured mechanism. The Court accepted the amicus recommendations and constituted a committee comprising judicial, legal, revenue, police, regulatory and accounting participation, with authority to engage professionals and to invite claims from depositors.

Conclusion: The committee was validly constituted to administer the process of identification, valuation, sale and distribution for the benefit of the investors.

Issue (ii): Whether the proceedings under the criminal law and the FIR should remain alive, while restraining alienation of the properties and keeping the matter under continued supervision.

Analysis: The order notes that the offence under the special statute may be compounded in the manner permitted by law, but that once the prosecution is instituted the matter must follow the statutory route. It therefore directed that, if the realised amount is insufficient to satisfy all claims, payment would be on a pro rata basis and the criminal process would continue. At the same time, it restrained transfer or alienation of properties except through the committee and required cooperation, disclosure, and periodic reporting to the Court.

Conclusion: The FIR and criminal proceedings were kept alive, and the properties were placed under restrictive supervision through the committee.

Final Conclusion: The writ proceedings resulted in a court-supervised remedial mechanism for recovery and distribution of investor dues, while preserving the criminal process and imposing prohibitory directions against alienation of assets.

Ratio Decidendi: Where a deposit-taking establishment faces a large-scale investor claim crisis, the Court may, consistently with the statutory scheme, constitute a supervisory committee to identify assets and claims, realise value through sale, and ensure equitable or pro rata distribution, without stalling the pending criminal process.

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