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SUPREME COURT OF INDIA
MANOJ MISRA, N.V. ANJARIA, JJ.
Alka Agrawal and Others – Appellants
Versus
State of Maharashtra and Others – Respondents
Criminal Appeal No. 2537 of 2026 [Arising Out of SLP (Crl.) No. 19305 of 2025]
Decided On : 15-05-2026
(A) Indian Penal Code, 1860 – Sections 420, 409 and 405 read with Section 34 – Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 Sections 2(c) and 3 – Cheating and criminal breach of trust – Common intention – Import of “deposit” under Section 2(c) of MPID Act is wide enough so as to include acceptance of money in any manner, whatever may be nomenclature – Amount of Rs.2.51 crore was advanced by appellants to respondents with promise for repayment of same with quarterly interest – Individual persons like respondents accepting deposit and fraudulently defaulting become a “Financial Establishment” within definition of Section 2(d) of Act, and could be subjected to legal action under provisions of MPID Act – Even if transaction is named as “loan”, it would not take it out of scope of term “deposit” – Nomenclature of transaction is not relevant – It is not nomenclature but ingredients or basic attributes with which transaction is informed and characterised that would make and mould the transaction to become “deposit” under Section 2(c) of MPID Act. (Paras 5.4.5, 6, 6.2 and 6.3)
(B) Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 Sections 2(c) and 3 – Indian Penal Code, 1860 – Sections 420, 409 and 405 read with Section 34 – Duping of public and financial fraud – Common intention – While criminal proceedings in respect of offences under IPC in their outcome operate in their own sphere, machinery under MPID Act has a different field to operate – Both are different statutory regimes – Merely because offences under the IPC were not established before criminal court, it would not imply that it becomes a kind of embargo against putting into motion provisions of MPID Act or that invocation of provisions of MPID Act is barred thereby – Non-making out of offences under IPC cannot be equated with non-applicability of provisions of MPID Act – Concepts thereunder have distinct and separate legal connotations and complaint under Section 3 of MPID Act is an independent recourse under specific law – Judgment and order passed in Criminal Revision Application rejecting case of appellants set aside – Appellants are entitled to invoke Section 3 and proceed under MPID Act, to be further entitled to have remedies under MPID Act for ventilation of their grievance. (Paras 6.5, 6.6, 8 and 9)
Facts of the case:
Present appeal is directed against judgment and order dated 14.08.2025 passed by High Court of Judicature at Bombay, Nagpur Bench, Nagpur, dismissing Criminal Revision Application No.64 of 2024 filed by appellants with cost of Rs.5,00,000/-. Crux of controversy is whether amounts given by appellants to respondent Nos.2 to 6 are covered within ambit of concept of “deposit” as defined under Section 2(c) of Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999.
Findings of Court:
View taken by High Court in dismissing Criminal Revision Application No.64 of 2024 filed by appellants is wholly erroneous in law.
Result : Appeal allowed.
Key Points: - The MPID Act defines "deposit" broadly to include receipt of money or valuable commodities to be returned with or without interest, with three core ingredients (receipt, returnable after a period, and return in cash/kind/with/without benefit) (!) (!) - A "Financial Establishment" includes any person accepting a deposit under any scheme or arrangement or in any other manner, excluding certain entities (government-owned corporations/cooperative societies, banking companies) (!) (!) - The definition of "deposit" is wide enough to include amounts received by individuals who later default, thereby enabling a remedy under MPID Act Section 3 for fraudulent default (!) (!) (!) - The High Court’s view that the transaction was a "loan" and civil in nature was set aside; the MPID Act machinery operates in a different field from IPC proceedings, and non-establishment of IPC offences does not bar MPID Act action (!) (!) (!) - The judgment holds that amounts lent/advanced by appellants to respondents meet the "deposit" criteria and that respondents 2–6 became "Financial Establishment" under Section 2(d) (!) - The appeal is allowed; appellants may invoke Section 3 of MPID Act and pursue remedies under MPID Act (!) (!)
JUDGMENT :
N.V. ANJARIA, J.
1. Leave granted.
2. The present appeal is directed against judgment and order dated 14.08.2025 passed by the High Court of Judicature at Bombay, Nagpur Bench, Nagpur1 [Hereinafter “High Court”] dismissing Criminal Revision Application No. 64 of 2024 filed by the appellants with cost of Rs. 5,00,000/-.
2.1 The crux of the controversy is whether the amounts given by the appellants to respondent Nos. 2 to 6 are covered within the ambit of concept of “deposit” as defined under Section 2(c) of the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999.2 [Hereinafter “MPID Act”]. The facts in the backdrop may be outlined. Appellant Nos. 1 to 5 are the members of a family whereas appellant Nos. 6 and 7 are two Companies. As stated by the appellants, somewhere in the year 2016, respondent No. 2 approached them through one Mr. Vedant Prakash Agrawal and induced them to invest amounts for setting up a resort at Tadoba, Maharashtra, promising that, in return, the appellants would get interest at the rate of 24% per annum payable quarterly in advance. Guided by the representations and assurances, the appellants invested total amount of Rs. 2.51 crore by paying such amount through cheques or bank transfer in favour of respondent Nos. 2 to 6.
3.1 The details of the amount paid by the appellants are as follows (i) Appellant Nos. 6 and 7 paid Rs. 25,00,000/- each in favour of respondent Nos. 5 and 6 (ii) Appellant No. 1 advanced Rs. 95,00,000/-, Rs. 45,00,000/- and Rs. 30,00,000/- to respondent Nos. 2, 4 and 3 respectively (iii) Appellant No. 2 paid Rs. 10,00,000/- in favour of respondent No. 4 (iv) Appellant No. 5 paid Rs. 4,25,000/- in favour of respondent No. 3 (v) Appellant No. 4 paid Rs. 6,75,000/- in favour of respondent No. 3 and (vi) Appellant No. 3 paid Rs. 10,00,000/- in favour of respondent No. 3. The amounts, according to the appellants, were to be repaid by 31.12.2019. Respondent Nos. 2 to 6 not only did not pay the interest but also failed to pay the principal amount to the appellants.
3.2 As respondent Nos. 2 to 6 did not pay the interest nor did they repay the principal amount, the appellants took legal action against them on several fronts. The appellants sent legal notice dated 08.05.2021 to respondent Nos. 2 to 6 demanding the principal sum of Rs. 2.51 crore along with unpaid interest and then filed a complaint before the Commissioner of Police, Nagpur on 13.05.2021. In reply dated 22.05.2021 to the said legal notice of the appellants, respondent Nos. 2 to 6 admitted that they had received the said amount but stated that as soon as the financial crisis caused by COVID-19 was over, they would pay the said amounts to the appellants. However, respondent Nos. 2 to 6 denied that they were liable to repay the amount by a particular date or that they were bound to pay any interest.
3.3 It appears that the cheque bearing No. 000521 dated 01.10.2021 drawn in favour of the appellants by respondent No. 4 stood dishonoured for the reason “payment stopped by drawer”, which led appellant No. 1 to issue a notice under Section 138 of the Negotiable Instruments Act, 1881.3 [Hereinafter “NI Act”] Respondent No. 4 admitted, in his response dated 17.11.2021, that she has accepted Rs. 45,00,000/- from appellant No. 1, however, again denied that interest was payable.
3.4 It further transpires that the appellants individually instituted various summary suits against respondent Nos. 2 to 6 before the competent civil courts seeking recovery of the amounts given. However, request of the appellants to register the First Information Report4 [Hereinafter “FIR”] against respondent Nos. 2 to 6 was not accepted by the police. Therefore, the appellants filed Criminal Miscellaneous Application No. 369 of 2022 praying for directions to the police station concerned for registration of the FIR against respondent Nos. 2 to 6 under Sections 420, 409 and 405 read with Section 34, Indian Penal Code, 1860.5 [He
Duping of public and financial fraud – Non-making out of offences under IPC cannot be equated with non-applicability of provisions of any specific law.
Applicants misrepresented loan transactions, which did not constitute 'deposits' under the MPID Act, thus the FIR was partially quashed.
The applicants' actions of obtaining loans in farmers' names do not constitute deposits or fall under the MPID Act, justifying their discharge from related charges.
The court established that transactions promising returns on deposits fall under the MPID Act, and the police are mandated to investigate when a cognizable offence is disclosed.
IBC Section 96 moratorium does not stay MPID Act Section 8 attachments of malafide transferred investor funds, absent debtor-creditor tie and due to distinct legislative fields with no repugnancy.
The allegations in the charge sheet would attract the essential ingredients of offences under Ss. 406 and 420 IPC and further Sec. 5 of the APPDFE Act.
The court held that disputed facts regarding the nature of transactions and intent behind non-payment necessitate a full trial, preventing the quashing of the FIR.
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