AS TO THE ADMISSIBILITY OF

                      Application No. 29785/96

                      by  M. N.

                      against Bulgaria

      The European Commission of Human Rights (First Chamber) sitting

in private on 4 September 1996, the following members being present:

           Mrs.  J. LIDDY, President

           MM.   M.P. PELLONPÄÄ

                 E. BUSUTTIL

                 A. WEITZEL

                 C.L. ROZAKIS

                 G.B. REFFI

                 B. CONFORTI

                 N. BRATZA

                 G. RESS

                 A. PERENIC

                 C. BÎRSAN

                 K. HERNDL

           Mrs.  M.F. BUQUICCHIO, Secretary to the Chamber

      Having regard to Article 25 of the Convention for the Protection

of Human Rights and Fundamental Freedoms;

      Having regard to the application introduced on 28 August 1995 by

M.N. against Bulgaria and registered on 11 January 1996 under file

No. 29785/96;

      Having regard to the report provided for in Rule 47 of the Rules

of Procedure of the Commission;

      Having deliberated;

      Decides as follows:

THE FACTS

      The applicant is a Bulgarian national born in 1943 and residing

in Varna.

      The facts of the case as submitted by the applicant may be

summarised as follows.

      On 12 May 1995 the applicant entered into a contract with A.B.,

a private limited liability company which was advertising in the press

that it was paying "high interest rates and dividends" on loans.  Under

this contract the applicant lent to A.B. 372,960.00 leva for a period

of three months.  In return A.B. promised to pay to the applicant

40,320.00 leva each month and 252,000.00 leva at the end of the three

month period.  The contract did not provide for the payment to the

applicant of interest or any other additional sum.

      In April and May 1995 various newspapers in Bulgaria published

information that the companies which were offering high interest rates

were operating unlawfully and were financially unsound.  The articles

predicted that these companies would soon collapse.

      On 26 May 1995 the police blocked the office of A.B., conducted

a search and seized money and documents.  It transpires from the

applicant's submissions that after 26 May 1995 the company has not

resumed its activities.  According to press materials submitted by the

applicant A.B. never engaged in any business, but was created and

operated as a "financial pyramid".  Its only activity was allegedly the

accumulation of funds which were then transferred to other private bank

accounts or abroad.  Criminal proceedings on unspecified charges have

been instituted against persons involved in the business of A.B.

      Throughout 1995 in Bulgaria, and especially in Varna, there were

numerous cases of private companies having accumulated large amounts

of money through loans from the population and having subsequently

collapsed.  Thousands of people allegedly lost their money in such

transactions.  Some of them joined efforts with the aim to obtain the

repayment of their "deposits" and the punishment of those responsible

for the operation and the collapse of the "financial pyramids".

      The applicant is involved in the activities of such a committee

and is one of its leaders.   The committee published numerous articles

in the press, held several rallies and meetings and complained to the

Parliament and to other institutions.  The applicant met the President

of Bulgaria and many other officials to seek support.  In January 1996

the committee was registered as a non-profit association and obtained

legal personality.  The applicant was elected to the governing body of

the association.

      In June 1995 the Parliament appointed an inquiry commission to

investigate the events which had led to the collapse of the "financial

pyramid structures" and to recommend measures for the safeguard of the

rights of individuals.  In July 1995 the commission published its

report.  It stated inter alia that the Bulgarian National Bank, the

fiscal authorities and the prosecution authorities had not taken

sufficient measures to prevent the fraudulent activities of certain

private companies.  Thus, the authorities had not reacted to clearly

misleading advertisements by informing the public of the risks inherent

in the advertised transactions.  Moreover, the prosecution authorities

had not investigated speedily the information about criminal frauds.

      On 1 June 1995 the applicant complained to the Regional

Prosecutor's Office (Okrazhna prokuratura) in Varna that she was

deprived of her savings.  On behalf of an unspecified number of persons

who were in a similar situation, she requested to be informed of the

financial situation of A.B. and of the "real reasons" for the police

intervention on 26 May 1995.  She also requested that all assets of

A.B. should be attached and that the creditors should receive back from

the State the amounts which they had lent to A.B.  The applicant also

sent numerous petitions to the prosecution authorities requesting the

punishment of the persons involved with financial pyramids.  She

received regularly responses from the various levels of the prosecution

authorities, who were informing her of the opening of criminal

proceedings against certain persons.  In a letter of 7 September 1995

the Regional Prosecutor in Varna stated that she should consult a

lawyer in order to obtain repayment of the amounts due to her by A.B.

      The applicant apparently has not brought an action against A.B.

for the repayment of the amounts due under their contract and has not

instituted proceedings to collect these amounts from assets belonging

to A.B. and seized by the police.  She has not instituted proceedings

under the Law on State Liability for Damages (**kon za otgovornostta

na darzhavata za vredi prichineni na grazhdani).

COMPLAINTS

      The applicant complains under Article 1 of Protocol No. 1 to the

Convention that she and many other persons cannot recover the money

which they had paid to private companies under loan contracts.

      The applicant submits that the State was responsible for these

problems because the private companies in question were registered with

the commercial registers at the courts and even had fiscal

registrations.  This meant that the State approved of their activities.

Furthermore, the State has failed in its obligation to prevent fraud

and crime as it did not intervene on time and did not discourage

ordinary people from depositing their life savings with shady

companies.

      Moreover, the applicant contends that the State was responsible

because it intervened with the business of the private companies

through brutal police actions, thus suspending the repayment of amounts

due under the loans.  Thus, in the applicant's case A.B. could have

honoured their contract if the police had not suspended its activities.

      In the applicant's view the responsibility of the State also

stems from the fact that the criminals from A.B. and other companies

were not prosecuted actively.  Some of them are at large and others

have escaped abroad.

      Moreover, the applicant submits that corrupt State officials were

involved in the financial pyramids.  In fact the pyramids were

organised and run secretly by the State and aimed at the accumulation

of resources, stolen from ordinary people, to be used in the process

of the privatization in the economy.

THE LAW

1.    The applicant complains under Article 1 of Protocol No. 1 (P1-1)

to the Convention that she and thousands of persons who have

"deposited" their money with private "financial pyramids" have not

obtained and are unlikely to receive payment.

      Article 1 of Protocol No. 1 (P1-1) to the Convention reads as

follows:

      "Every natural or legal person is entitled to the peaceful

      enjoyment of his possessions.  No one shall be deprived of his

      possessions except in the public interest and subject to the

      conditions provided for by law and by the general principles of

      international law.

      The preceding provisions shall not, however, in any way impair

      the right of a State to enforce such laws as it deems necessary

      to control the use of property in accordance with the general

      interest or to secure the payment of taxes or other contributions

      or penalties."

      Firstly, the Commission recalls that the Convention does not

provide for an "actio popularis", but requires, when the right to

individual petition under Article 25 (Art. 25) is being exercised, that

the applicant claim to be the victim of a violation of the Convention.

In the present case the applicant has not shown to have been empowered

to act for other individuals who have lost their money in "financial

pyramids".  The Commission, therefore, can only consider the

applicant's complaints insofar as she herself is concerned

(No. 8612/79, Dec. 10.5.79, D.R. 15 p. 259).

      The Commission recalls in this respect the three distinct rules

of Article 1 Protocol No. 1 (P1-1) to the Convention.  The first which

is expressed in the first sentence of the first paragraph and is of a

general nature, lays down the principle of peaceful enjoyment of

property.  The second rule, in the second sentence of the same

paragraph, covers deprivation of possessions and subjects it to certain

conditions.  The third, contained in the second paragraph, recognises

that the Contracting States are entitled, amongst other things, to

control the use of property in accordance with the general interest.

The second and the third rule, which are concerned with particular

instances of State interference with the right to peaceful enjoyment

of property, are to be construed in the light of the general principle

laid down in the first rule (see, for example, Eur. Court H.R., the

Pressos Compania Naviera S.A. and Others judgment of 20 November 1995,

Series A No. 332, pp. 21-22, para. 33).

      In certain specific circumstances the State may be responsible

under Article 1 of Protocol No. 1 (P1-1) for interferences with

peaceful enjoyment of possessions resulting from transactions between

private individuals.  However, there is no State interference where the

facts complained of are not the product of an exercise of governmental

authority but concern exclusively relationships of a contractual nature

between private individuals (Eur. Court HR, Gustafsson v. Sweden

judgment of 25 April 1996, para. 60).  Thus, for example, Article 1 of

Protocol No. 1 (P1-1) cannot be interpreted as establishing an

obligation for the State to maintain the purchasing power of sums

deposited with financial institutions by way of a systematic indexation

of savings (No. 8724/79, Dec. 6.3.80, D.R. 20 p. 226; cf. also No.

25045/94, Dec. 12.4.96, unpublished).

      In the present case the Commission need not decide whether the

applicant's contractual right to receive certain amounts from A.B. is

a "possession" within the meaning of Article 1 of Protocol No. 1 (P1-1)

to the Convention as the application is in any event inadmissible for

the following reasons.

      The Commission first notes that the applicant has not been

deprived of her contractual right to receive payments from A.B. by the

State or, indeed, by anyone else, the existence of her right never

having been disputed.  Furthermore, it does not appear that the

authorities have in any way prevented the payment of A.B.'s debts out

of this part of its assets which was seized by the police.  The

Commission notes that the applicant has not instituted any proceedings

in order to obtain payment from the seized funds or from other property

belonging to A.B.

      The Commission finds, therefore, that the facts of the present

case cannot be regarded as a deprivation of possessions within the

meaning of the second sentence of Article 1 para. 1 of Protocol No. 1

(P1-1) to the Convention.

      Insofar as the applicant complains that the actions of the police

interfered with the normal business of A.B. and thus affected adversely

its ability to pay to the applicant, even assuming that this can be

regarded as a State interference with the applicant's rights under

Article 1 of Protocol No. 1 (P1-1) to the Convention, the Commission

finds that the applicant has not exhausted all domestic remedies within

the meaning of Article 26 (Art. 26) of the Convention as she has not

brought proceedings for damages under the Law on State Liability for

Damages.  In any event, the applicant has not substantiated any reasons

why such interference, which apparently aimed at the prevention of

fraudulent financial activities, was not justified under the second

paragraph of Article 1 of Protocol No. 1 (P1-1) to the Convention.

      As regards the remaining contentions of the applicant the

Commission finds that she has not established the existence of an

interference on the part of the State with her right to peaceful

enjoyment of her possessions.  Thus, the findings of the Parliamentary

commission cannot be interpreted as indicating that the State has

interfered with property rights.  Also, it does not appear that the

alleged lack of sufficient warnings to the public against deceptive

private companies, or the registration of private limited liability

companies in the commercial records at the courts may engage the

responsibility of the State for the fraudulent activities of

individuals.

      It follows that the applicant's complaints under Article 1 of

Protocol No. 1 (P1-1) to the Convention are manifestly ill-founded

within the meaning of Article 27 para. 2 (Art. 27-2).

2.    Insofar as the applicant complains that those responsible for the

operation and the collapse of the "financial pyramids" have not been

punished, the Commission recalls that the Convention does not guarantee

a right to institute criminal proceedings against third persons

(No. 7116/75, Dec. 4.10.76, D.R. 7, p. 91).

      It follows that the remainder of the application is incompatible

ratione materiae with the provisions of the Convention and has to be

rejected under Article 27 para. 2 (Art. 27-2).

      For these reasons, the Commission, unanimously,

      DECLARES THE APPLICATION INADMISSIBLE.

  M.F. BUQUICCHIO                                 J. LIDDY

     Secretary                                    President

to the First Chamber                        of the First Chamber