The Madras High Court has ruled that property attachment proceedings under the Tamil Nadu Protection of Interests of Depositors Act, 1997, can prevail over conflicting action under the Prevention of Money Laundering Act. The Division Bench was hearing a plea seeking expedited sale of five properties belonging to Viswapriya (India) Limited, linked to businessman R. Subramanian. The court noted that 1,240 depositors were affected, including deceased investors and senior citizens. With the Supreme Court having stayed the PMLA proceedings against Subramanian, the Bench allowed TANPID proceedings to continue.

Madras High Court Backs Depositors, Says TANPID Property Attachment Prevails Over PMLA 

The Madras High Court has ruled that property attachments under Tamil Nadu's TANPID Act take precedence over conflicting PMLA attachments, strengthening protection for thousands of depositors

Madras High Court rules that property attachments under the Tamil Nadu Protection of Interests of Depositors Act, 1997, or TANPID Act will override PMLA attachments.

The Division Bench comprising Justices G.R. Swaminathan and V. Lakshminarayanan said the Prevention of Money Laundering Act (PMLA) provides for attachment of properties and such action cannot take precedence over State action automatically.

The judgment was delivered as the court was hearing a plea for a fast-track sale of five properties of Viswapriya (India) Limited, founded by businessperson R. Subramanian.

R. Subramanian was a founder of the now-defunct Subhiksha retail chain, and Viswapriya (India) Limited was one of the companies linked to his business activities.

The case has ramifications for depositors who had invested money with financial establishments promising high returns before allegedly facing difficulty in recovering their investments.

Madras High Court backs TANPID Act protection

The court noted that of 1,240 depositors of Viswapriya Limited, 34 had died and many of them were reportedly senior citizens, who had invested their retirement benefits.

The Bench said the matter highlights the need for the authorities to expedite the process of sale of properties so that the depositors or their legal heirs can get back the amounts.

The Enforcement Directorate opposed the proposed sale of the same properties which had been attached by it separately under the provisions of the PMLA enacted by Parliament.

But the Madras High Court noted that proceedings against R Subramanian under PMLA were stayed by the Supreme Court on April 12, 2019.

Therefore, the Bench held that the Enforcement Directorate’s action was in abeyance and could not come in the way of proceedings under the TANPID Act.

Justice G.R. Swaminathan said Section 14 of the TANPID Act has a non-obstante clause giving overriding effect to the legislation over inconsistent provisions contained in other laws.

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Supreme Court precedents shaped the property attachment ruling

The judges also cited the verdict of the Supreme Court in 2011, which upheld the validity of the TANPID Act, which was enacted to protect the deposits of the depositors who were duped by the financial establishments. 

The Supreme Court had acknowledged the purpose of the legislation to deal with the situation where depositors were lured by the offer of high interest rates and suffered financial loss.

Justice G.R. Swaminathan also cited a Supreme Court judgment in 2025 on Maharashtra’s depositors’ protection laws and central laws on secured financial recovery.

The court held that the SARFAESI Act, 2002 and the Recovery of Debts and Bankruptcy Act, 1993 cannot override Maharashtra’s depositor-protection law.

The Supreme Court had connected that finding to the federal constitutional structure of India and the legislative distribution of powers under Article 246.

The Madras High Court thus held that the mere fact that the PMLA was made by Parliament and TANPID by Tamil Nadu did not give it precedence.

Justice G.R. Swaminathan also examined the differences in the relevant attachment provisions contained in the two statutes.

Section 3 of TANPID starts with a non-obstante clause overriding other laws, whereas Section 5 of PMLA dealing with attachment of property does not have such an overriding clause.

The judgment found this distinction to be significant, as the insertion of such clauses by Parliament elsewhere in PMLA indicated that their omission from Section 5 was deliberate.

Viswapriya properties ordered for liquidation

The Bench ordered the liquidation of the properties of Viswapriya (India) Limited attached under the TANPID Act and allowed the recovery process for depositors to continue.

The authorities must try to finish the process in the next few months so that affected depositors can finally get their money back, Justice G.R. Swaminathan said. 

The ruling establishes a significant legal precedent for clashes between state laws on the protection of depositors and national legislation on financial crimes and property confiscation.

For thousands of depositors, especially senior citizens and families that hoped to recover their money, the immediate significance is the court's order to prioritize liquidation.

The decision does not undo the PMLA structure but clarifies the position in cases of conflicting property attachments when TANPID protections overlap with the central proceedings.

Further proceedings concerning the sale and distribution of the attached assets will determine the pace at which eligible depositors can receive recoveries.

Sprouts News will keep a watch on the developments about Viswapriya properties, depositor recovery proceedings and the larger legal implications of the Madras High Court judgment.