IMPORTANT POINT
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.

JUDGMENT (ORAL)

Urmila Joshi-Phalke, J. - The petitioner by invoking jurisdiction under Articles 226 and 227 of the Constitution of India as well as Section 482 of the Code of Criminal Procedure seeks quashment of the order passed by the learned Additional Sessions Judge, Amravati directing the Police Station Officer/Authorized Officer, Rajapeth Police Station to submit report under Section 156(3) of the Criminal Procedure Code, 1973 after proper investigation.

2. The petitioner and the respondent No.2 both are permanent residents of Amravati and acquainted with each other. As per the contention of the petitioner in the year 2017 his mother was suffering from heart disease, therefore, he was in need of financial assistance. The petitioner requested respondent No.2 for hand-loan of Rs.10,00,000/- for the purpose of medical treatment of his mother. Accordingly, as per request respondent No.2 gave hand-loan of Rs.10,00,000/- to the petitioner and obtained written note i.e. Jama-Chitthi on the letter-pad of the petitioner. The petitioner had issued cheque bearing No.851719 of IndusInd Bank to the respondent No.2 by way of security. As per the contention of the petitioner the alleged transaction had taken place in the presence of Shri Virbhan Zambani. It is further contention of the petitioner that he could not repay the amount due to business problems as agreed by him. The respondent No.2 deposited the said cheque for clearance but it was returned with endorsement 'Funds Insufficient' on 13.8.2020. As the cheque issued by the petitioner was not encashed, respondent No.2 issued notice to the petitioner on 17.8.2020. As per the petitioner, respondent No.2 had not mentioned real transaction in the said notice. The respondent No.2 again issued a notice dated 4.9.2020 asking the petitioner to refund amount within three days otherwise she would take legal action against him under the provisions of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 (hereinafter referred to as, 'the MPID Act, 1999'. Thereafter respondent No.2 approached the Police for taking action against the petitioner but the Police did not register the offence, therefore, petitioner preferred application seeking relief under Section 156(3) of the Cr.P.C. before the learned Additional Sessions Judge, Amravati bearing Misc. Criminal Application No.95/2020. The respondent No.2 had also filed Misc. Criminal Application No.132/2020 for seeking direction to the Police to register offence against petitioner. Said application was allowed by the learned Additional Sessions Judge by directing the Police Station Officer to conduct the investigation and submit the report.

3. Being aggrieved with the said order present writ petition is filed by the petitioner on the ground that the learned Additional Sessions Judge had not considered that it is the transaction of hand-loan and at the most case of the petitioner is covered under Section 138 of the Negotiable Instruments Act, 1881. The order passed by the Additional Sessions Judge is illegal and liable to be set aside.

4. In response to the notice the respondent No.2 submitted that the petition is without substance, malicious and liable to be dismissed. As per the contention of the respondent No.2 the petitioner had represented to the people of Amravati and its adjacent district that he is an accomplished land developer and has several upcoming layouts project in Amravati district. He further represented that he would be converting huge portion of the land into layouts which are adjacent to upcoming road development project to attract several people into opening deposit account. He promised that money deposited would be used by him for development project and that the deposit scheme would yield higher rate of returns and thereby the petitioner willfully made a deposit scheme lucrative. The petitioner had also promised a monthly return of 1.8% which was payable after every four months to the conc