1) Where the assets available for attachment of a financial establishment of or other person referred to in Section 4 are found to be less than the amount or value which such financial establishment is required to repay to the depositors and where the Special Court is satisfied by affidavit or otherwise, that there is reasonable cause for believing that the said financial establishment has transferred (whether after the commencement of this Act or not) any of the property otherwise than in good faith and for consideration the Special Court may, by notice, require any transferee of such property (whether or not he receives the property directly from the said financial establishment) to appear on a date to be specified in the notice and show cause why so much of the transferee's property as is equivalent to the proper value of the property transferred should not he attached.
(2) Where the said transferee does not appear and show cause on the specified date or where after investigation in the manner provided in sub-section (4) of Section II, the Special Court is satisfied that the transfer of the property to the said transferee was not in good faith and for consideration, the Special Court shall order the attachment of so much of the said transferee's property as is in the opinion of the Special Court equivalent to the proper value of the property transferred.
(2) Where the said transferee does not appear and show cause on the specified date or where after investigation in the manner provided in sub-section (4) of Section II, the Special Court is satisfied that the transfer of the property to the said transferee was not in good faith and for consideration, the Special Court shall order the attachment of so much of the said transferee's property as is in the opinion of the Special Court equivalent to the proper value of the property transferred.
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More sections of this act
Section 1 · Short title, extent and commencementSection 2 · DefinitionsSection 3 · Attachment of properties on default of return of depositsSection 4 · Authorities to receive complzints and cause inquiry and investigationSection 5 · Offences to be cogn~able and non-bailableSection 6 · Competent AuthoritySection 7 · Punishment for default in repayment of deposits and interestsSection 8 · Report and Return by the Financial EstablishmentsIndia Code, Government of India. Text fetched 13 Oct 2026. Check the linked official text and subsequent notifications when applying a provision.