The burden of proof to demonstrate lawful acquisition of property rests on the property owner, and failure to substantiate claims warrants confirmation of asset attachment.

JUDGMENT :

AMIT B. BORKAR, J.

1. Heard.

2. Admit.

3. Through this appeal, the State of Maharashtra has challenged the order passed by the District Judge-2 and Additional Sessions Judge, Nagpur, thereby refusing to confirm attachment in respect of immovable property i.e. Flat No.101, First Floor, A Wing, Jayanti Mansion VI, Manish Nagar, Nagpur.

4. The Competent Authority under Section 5 (3) of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 (for short “MPID Act”) had attached properties of the respondent nos.1 and 2 by Notification dated 29.3.2016. The respondent no.1 was the Director of Financial Institution - M/s. Wetell Concept Pvt. Ltd. It is alleged by the prosecution that the Directors of the said Company had launched various schemes and promised high attractive rates of interest and received deposits from 161 depositors to the tune of Rs.3,09,53,000/- but, did not return the amount of deposits. Crime No.313/2011 was registered against the Directors of the said Company including the respondent no.1 for offences punishable under Sections 420, 406 and 120-B of the Indian Penal Code read with Section 3 of the MPID Act. The respondent nos.1 and 2 were arrested and their immovable properties were attached after the Government was satisfied that the respondents have acquired said properties out of the deposits collected by them and the respondents are not likely to refund deposits to the depositors. The prosecution, therefore, filed an application under sub-section (3) of Section 5 of the MPID Act, for making order of attachment absolute and for necessary directions for realisation of assets, as contemplated by Sections 4 and 7 of the MPID Act.

5. The respondent no.1 filed his reply and stated that the property, which is the subject matter of the present appeal i.e. Flat No.101, First Floor, A Wing, Jayanti Mansion VI, Manish Nagar, Nagpur has been purchased by respondent no. 1 and 2 , out of their own income on 11.5.2011 . It is stated that the respondent no.2 - wife was having her property at Akola, which was sold for consideration of Rs.3,85,000/- and the said amount was utilised for purchasing flat in question. Therefore, it was prayed that the attachment in respect of the said flat should not be made absolute.

6. The respondent no.2 filed her Intervention Application in the said proceedings to oppose making of attachment absolute. It is stated by the respondent no.2 that the flat in question has been purchased after saving considerable money from her salary, by selling ancestral property for consideration of Rs.3,85,000/- and selling flat at Rajat Plaza for an amount of Rs.3,81,000/-. It is further stated that she used to run tuition classes and earned sufficiently.

7. We have carefully considered the documents produced by the respondent nos.1 and 2. On careful perusal of the record, it appears that the flat in question i.e. Flat No.101 was purchased by the respondent nos.1 and 2 for an amount of Rs.25,00,000/- on 11.5.2011. The respondent no.2 in her cross-examination admitted that she had paid stamp duty of Rs.1,20,000/- and paid registration fee to the tune of Rs. 25,000/- and she had to incur miscellaneous expenditure for the purpose of registration of said agreement to the tune of Rs.25,000/-. Therefore,it appears that the respondent nos.1 and 2 had paid an amount of Rs.26,95,100/- on the date of sale-deed i.e. on 11.5.2011.

8. From the evidence adduced by the respondent no.2, it appears that the respondent nos.1 and 2 have paid an amount of Rs.16,00,000/- to the builder for purchase of flat in question. It also appears that before execution of the sale-deed, on 18.4.2009, th