The Madras High Court has commended the Tamil Nadu government for its decision to include “economic offenders” as a distinct category under the Tamil Nadu Goondas Act. The court observed that this significant policy change enhances the state’s capacity to address economic crimes more effectively.
In its remarks, the court stated, “This Court records its appreciation for the issuance of G.O.Ms.No.68, Home Department, dated 08.07.2025, by which the category of ‘economic offender’ has been added under the Tamil Nadu Act 14 of 1982 (Goondas Act). This amendment grants the authorities the power to detain repeat offenders involved in fraudulent financial schemes under preventive detention laws. This is a notable policy development that boosts the government’s ability to tackle crimes impacting public order and investor confidence, and it deserves particular recognition.”
Justice B. Pugalendhi also acknowledged the state’s efforts in introducing a Standard Operating Procedure (SOP) to ensure that cases under the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997 (TNPID Act) are handled within defined timelines. The SOP brings together multiple departments to coordinate effectively.
The court further appreciated the government’s constructive response to earlier judicial criticism. It noted that the administration had taken meaningful steps toward better enforcement of the TNPID Act and to protect the interests of depositors. The court remarked that such a proactive stance helps reinforce the rule of law and strengthens public trust in the legal and administrative system.
“The State has treated judicial observations not as an affront, but as a prompt for institutional reform,” the court said. “By issuing a detailed SOP, initiating digital tools, launching awareness campaigns, appointing zonal-level Competent Authorities, creating Valuation Committees, and designating a dedicated head for implementation, the government has clearly taken the court’s directives seriously. These efforts not only promote legal accountability but also help restore public confidence in the system’s integrity.”
The observations were made while the court was hearing a contempt petition filed by T. Prabhakar. The petition stemmed from an earlier court order directing a monitoring committee to facilitate the refund of depositors’ money, and had flagged several shortcomings in the implementation of the TNPID Act. The court had also issued multiple guidelines to improve the existing processes.
In its hearing, the court acknowledged that the state had responded positively to its earlier criticisms and had made tangible progress. It noted that the new SOP set clear timelines and outlined coordination mechanisms across departments such as the Economic Offences Wing, the Home Department, Revenue, and Registration Departments, among others. According to the court, this marks a shift from a previously disjointed approach to a more time-bound and accountable system.
The court also recognized the integration of digital communication and e-governance tools in the new framework. It noted that instructions could now be issued via email, and vital records from the Revenue and Registration Departments could be accessed online. The court observed that in the digital era, such steps would minimize delays while enhancing transparency, traceability, and overall accountability.
Additionally, the court noted the establishment of Valuation Committees, chaired by District Revenue Officers and comprising officials from the Registration Department, Public Works Department, and Regional Transport Offices. These committees are tasked with determining the value of seized assets before auction, in line with sale orders issued by the TNPID courts. The court expressed that this would help streamline the asset valuation process, reduce disputes, and expedite auctions.
However, the court also pointed out that the SOP did not define a clear outer timeline and instead used the term “expeditiously.” To address this, the court fixed a maximum limit of 12 days for issuing the necessary government orders, clarifying that this timeline does not override government discretion and that final determinations would still rest with the Special Court handling the matter.
(With inputs from Live Law)
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