Section 3: Attachment of properties on default of return of deposits

Q: What does Section 3 of The Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 (KPID) deal with?

Section 3 KPID pertains to "Attachment of properties on default of return of deposits". It is part of the The Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004, a legislation enacted by the Parliament of India. Section 3 of The Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 (KPID) governs attachment of properties on default of return of deposits. As verified on 19 May 2026.

Q: Is Section 3 KPID still in force?

Yes, Section 3 of the The Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 is currently in force across the Republic of India.

Q: What is धारा 3 KPID?

धारा 3 KPID is the Devanagari Hindi reference for Section 3 of the The Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004. Section 3 of The Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 (KPID) governs attachment of properties on default of return of deposits. As verified on 19 May 2026.

Q: What is Dhara 3 KPID?

Dhara 3 KPID is the Roman Hindi reference for Section 3 of the The Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004. "Dhara" means "Section" in Hindi. Section 3 of The Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 (KPID) governs attachment of properties on default of return of deposits. As verified on 19 May 2026.

Q: How to cite Section 3 of The Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004?

Cite as: "Section 3, The Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 (KPID)" in legal briefs. For academic writing, use the BlueBook format: The Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004, § 3 (India).

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(1)

The Government or the District Magistrates in their respective jurisdiction, suo moto or on receipt of any complaint may cause investigation of a complaint or fraudulent transaction referred to in this section. The District Magistrate shall forward his report together with the complaint to the Government at the earliest.

(2)

Notwithstanding anything contained in any other law for the time being in force,-

(i) where, upon complaint received from any depositors or otherwise, the Government is satisfied that any Financial Establishment has failed -

(a) to return the deposit after maturity or on demand by depositor: or

(b) to pay interest or other assured benefit: or

(c) to provide the service against such deposit; or:

(ii) Where the Government has reason to believe that any Financial Establishment is acting in and detrimental to the interest of the depositors with an intention to defraud them; or

(iii) Where the Government is satisfied that such Financial Establishment is not likely to return the deposits or make payment of interest or other benefits assured or to provide the services against which the deposit is received. the Government may, in order to protect the interests of the depositors of such Financial Establishments, after recording reasons in writing, issue an order by publishing it in the official gazette, attaching the money or property believed to have been acquired by such financial establishment either in its own name or in the name of any other person from and out of the deposits collected by the financial establishments, and where it transpires that such money or other property is not available for attachment or not sufficient for the repayment of the deposits, such other property of the said financial establishments, or the personal assets of the promoters, partners, directors, managers or members or any other person of the said Financial Establishments.

(3)

The Government shall also notify the ad-interim order made under sub-section (2) in the Official Gazette and two newspapers having wide circulation and shall also cause to be affixed a copy of such order on some conspicuous place of the property so attached.

(4)

On the publication of the order made under sub-section (2), all the properties and assets of the Financial Establishment and the persons mentioned therein shall forthwith vest in the Competent Authority appointed by the Government, pending further order from the Special Court.