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.

JUDGMENT :

SHYAM C. CHANDAK, J.

1) Present Appeal filed under Section 11 of The Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 (for short ‘MPID Act’) impugning the Order dated 4^th November 2023, passed by the learned Special Judge (MPID), City Civil & Sessions Court, Gr. Bombay, thereby, rejecting the Application at Exh.11, in Misc. Application No.151/2020 (for short ‘MA/151/2020’), in MPID Special Case No.1/2014, seeking quashing and setting aside of said Order and to allow the Application (Exh.11) thereby staying the proceedings in MA/151/2020.

2) Heard Mr. Bhanushali, learned Advocate for the Appellant, Ms. Patil, learned Special PP and Smt. Shinde, learned APP for the Respondent No.1, State and Mr. Lakhawat, learned Advocate for Respondent No.2 (“NSEL”).

3) Facts giving rise to this Appeal are as under :-

3.1) The said MPID Case has been filed for the offences under Section 3 of MPID Act and Section 120B read with Sections 406, 409, 420, 467 and 477A of IPC. Therein Appellant and Smt. Kanta Gupta are being prosecuted as Accused Nos.129 and 130. Smt. Kanta Gupta has been a sole proprietor of the Appellant. Respondent No.1 has filed said MA/151/2020 under Section 8 of MPID Act, arraigning M/s. PD Agro Processors Pvt. Ltd. (“M/s. PD Agro”, for short) and the Appellant as Respondent Nos.1 and 2, respectively. Therein, it has been contended that the forensic audit report of M/s. PD Agro has revealed that M/s. PD Agro has received the investors’ money via NSEL and owes its liability to the tune of Rs. 680.29 Crores. M/s. PD Agro became member of NSEL on 26^th September, 2011 and has traded on NSEL platform from 1^st October, 2011 till 31^st August, 2013. The said forensic audit report concluded that M/s. PD Agro has transferred that investors’ money from its settlement account to various entities. This includes the transfer of certain amount to the Appellant. Said transfer by M/s. PD Agro to the Appellant is malafide as per Section 8 of the MPID Act and is liable to be attached. Therefore, it has been prayed to attach the properties of the Appellant to safeguard the interest of the investors.

4) During pendency of the MA/151/2020, the Appellant filed an Application below Exh.11, through Smt. Kanta Gupta. The Appellant asserted therein that Smt. Kanta Gupta had inherited the Appellant firm M/s. Dulisons Cereals after the demise of her husband late Shri. Narendra Agarwal and mother-in-law Smt. Pishta Agarwal. Appellant was not engaged in any trading activities as Smt. Kanta Gupta has been a housewife. That, earlier, the SBI had filed an Application before the NCLT, Mumbai bearing CP(IB)/1145/MB/2021 against the Appellant. Said Application has been titled as “State Bank of India v/s. Smt. Kanta Gupta” and it has been filed under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019, to initiate Insolvency Resolution Process against the Appellant. On account of filing of said Application, interim moratorium had commenced against the Appellant in terms of Section 96 of the IBC. In MA/151/2020, the Competent Authori