New Delhi, Oct. 2 (PTI): The Supreme Court has upheld a Puducherry law invoked to attach the properties of a firm accused of cheating investors, saying President-approved state acts aimed at protecting depositors from “unscrupulous financial companies” were valid even if they went against central statutes.
Justices Altamas Kabir and J. Chelameshar also upheld two other similar laws passed by Maharashtra and Tamil Nadu.
“We have to keep in mind the beneficial nature of the three legislations, which is to protect the interests of small depositors who invest their life’s earnings and savings in schemes… from unscrupulous individuals and companies, both incorporated and unincorporated,” Justice Kabir said.
“More often than not, the investors end up losing their entire deposits,” he added.
The apex court rejected the argument of of Pondicherry Nidhi Ltd, accused of misappropriating around Rs 12.5 crore of depositor cash, that the state government was not empowered to pass such a law.