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2017 Supreme(Bom) 2296
IN THE HIGH COURT OF BOMBAY
S.C. Dharmadhikari, Bharati H. Dangre, JJ.
Suresh Raju Shetty - Appellant
Vs.
State of Maharashtra & another - Respondents
Cri. Appeal Nos. 813 of 2016 & 110 of 2017 with Cri. Appln. Nos. 57, 238, 658, 1262 & 100 of 2017
Decided On : 30-11-2017
Advocate Appeared:
For the Appellant : S.P. Kadam, Prashant Badole, R.P. Hake Patil, Amogh Singh, D.P. Singh
For the Respondents: Vinay Bhanushali
For the State : J.P. Yagnik
The main legal point established in the judgment is the requirement for thorough consideration and examination of objections to the attachment of property under the MPID Act, and the need for evidence to show interest in the attached property.
Headnote:
MPID Act - Criminal Appeal - 1999 - Summary of the acts and sections referenced and discussed by the court: The court discussed the Maharashtra Protection of Interest of Depositors (In Financial Establishment) Act, 1999 (MPID Act) and its sections 2, 4, 5, 7, and 8. The court highlighted the powers of attachment, the procedure for objections to attachment, and the consequences of attachment under the MPID Act. The court also emphasized the need for thorough consideration and examination of objections to attachment, and the requirement for evidence to show interest in the attached property.
Fact of the Case:
The case involved an appeal challenging an order passed by the Designated Court under the Maharashtra Protection of Interest of Depositors (In Financial Establishment) Act, 1999 (MPID Act). The appellant, accused of cheating and financial fraud, objected to the attachment of his property under the MPID Act.
Finding of the Court:
The court found that the Designated Court failed to thoroughly consider the objections to the attachment and ignored the scheme of the MPID Act. The court quashed and set aside the impugned order and directed that the objections of the appellants be decided afresh on merits and uninfluenced by the earlier observations and findings. The court also imposed a condition on the appellant-Satyaprakash Laxmi Singh to prevent the creation of third-party interests in the attached property during the proceedings.
Issues: The issues included the legality of the attachment of the property under the MPID Act, the consideration of objections to the attachment, and the need for a thorough examination of the objections by the Designated Court.
Ratio Decidendi: The court's decision was based on the failure of the Designated Court to consider the objections to the attachment thoroughly and in accordance with the provisions of the MPID Act. The court emphasized the need for a detailed examination of objections and the requirement for evidence to show interest in the attached property.
Final Decision: The court quashed and set aside the impugned order, directed a fresh consideration of the objections, and imposed a condition on the appellant-Satyaprakash Laxmi Singh to prevent the creation of third-party interests in the attached property during the proceedings.
S.C. Dharmadhikari, J.
This appeal (Criminal Appeal No. 813 of 2016) challenges an order passed by the learned Special Judge presiding over the Court known as Designated Court under the Maharashtra Protection of Interest of Depositors (In Financial Establishment) Act, 1999 (hereinafter referred to as the “MPID Act”). The appellant challenges the order dated 16th November, 2016 in MPID Special Case No. 8 of 2005 along with 11 of 2003 and 10 of 2012.
2. The appellant before this Court Shri. Suresh Raju Shetty is the original accused. He says that a crime was registered bearing number 10 of 2003 at Mulund Police Station, Mumbai alleging offences of cheating (406, 420, 120-B of the Indian Penal Code, 1860). The complaint was lodged by one Smt. Laxmi Balkrishna Shetty, the second respondent to this appeal. Thereafter, the investigations were transferred to the State CID. A charge-sheet was laid and the matter is pending before the Designated Court under the MPID Act. Smt. Sunita Suresh Shetty was the other accused in the said case, however, she was discharged by the learned Special Judge.
3. It is contended that the accused had started an investment company in the year 1995 in the name and style as “Om Sai Capital and Leasing and Finance Private Limited”. It had office at Mulund, Mumbai. The complaint alleges that the complainant, along with her relatives invested moneys and she was promised return on the same with 25% interest per annum. The interest amount was to be paid over quarterly. A sum of Rs. 25 lakhs was invested by the complainant and her relatives invested Rs. 8 lakhs. Thus, the total investment at the relevant time was Rs. 33 lakhs. After this amount was invested and duly received, no interest was ever paid. The principal amount and the interest due was also not refunded. Therefore, the FIR was registered on 28th January, 2003, copy of which is at Annexure ‘A’. The appellant was arrested on 11th March, 2003 and released on bail on 14th April, 2003. Similar was the case with the co-accused Sunita Suresh Shetty now discharged. Even she was arrested and enlarged on bail.
4. The present appeal concerns an order dealing with a property, more particularly described in para 4 of the memo of this appeal. The accused-appellant had sold a business and the rights in the shops where it was carried out, namely, Sairaj Bar and Restaurant being Shop Nos. 1 to 4 situate at Survey No. 123-A and 123-B, Hissa No. 2 of Pallav Niwas, J. N. Road, Mulund (West), Mumbai and received Rs. 2.45 crores as consideration. The learned Judge directed, by the impugned order, the appellant to deposit a sum of Rs. 2.45 crores.
5. The appellant submits that a request was made to grant a stay on the operation of this order. That was declined. We are not concerned with the other persons in this matter for the simple reason that the objection of the appellant is that a notification dated 18th March, 2016 came to be issued under section 4 of the MPID Act by the Deputy Secretary, Home Department, Government of Maharashtra. In that notification, three immovable properties and 10 movable properties came to be attached. A copy of this notification is annexed as Annexure ‘G’ to the petition. That notification reads as under :-
“NOTIFICATION
No. MPI 2006/C.R.39/Pol 11
Government of Maharashtra
Home Department, 2nd Floor,
Mantralaya, Mumbai – 32
Date : 18-3-2016
No MPI 2016/C.R.39/Pol :- Whereas complaints have been received from number of depositors against OM SAI CAPITAL LEASING AND FINANCE PVT. LTD. (herein after referred to as “the said Financial Establishment”), complaining that they had collected the Fund and have defaulted to return the said deposits made by the depositors, on demand;
And whereas, the State Government is satisfied that the said Financial Establishment and its Chairman/Directors are not likely to return the deposits to the depositors and h
