In an appeal filed before the Bombay High Court seeking the setting aside of an order dated 16-10-2024 by the Special Judge, MPID, a Division Bench of Justice A.S. Gadkari and Justice Kamal Khata dismissed the appeal for lacking merit and affirmed the impugned order rejecting the appellant’s application for securing Rs. 48 lakhs for property permitted for auction.
The appellant was the proprietor of a trading company engaged in the trade and manufacture of spices for 30 years. His company became a member of National Spot Exchange Limited (NSEL) in September 2011 and remained so until July 2013, when its membership was cancelled/suspended. The appellant was listed as an accused in a crime registered for offences punishable under Sections 120(B), 409, 465, 467, 468, 471, 474, 477(A) of the Indian Penal Code, 1860 (IPC) against the Directors and key management persons of NSEL, FTIL, and 25 Borrowers/Trading Members of NSEL, along with certain brokers. After the transfer of investigation, Sections 3 and 4 of the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 (MPID Act) were added.
The appellant submitted that during the hearing of his bail application, he had orally proposed to deposit Rs. 25 lakhs quarterly, upon which, the competent authority under the MPID Act was to hand over the goods, without admitting any liability. As a result, Rs. 29 lakhs were deposited, but no status of the fixed deposit was provided. After being arrested, the appellant was granted bail on 30-03-2016.
It was asserted that, despite the monetary deposit, he sent various emails to the competent authority requesting the handover of the goods, but they were entirely ignored. Thereafter, the appellant filed objections regarding a property being made absolute under the MPID Act. Upon attachment of said property by the Special MPID Court order, as well as an order of the Supreme Court Committee, the property was put up for auction thrice. The bid price and reserve price were 48 lakhs, but no buyer came forward to bid.
The appellant submitted that he was willing to deposit the differential amount for the release of the property, but the said application was rejected by the impugned order. Hence, the present appeal was preferred.
NSEL contended that the valuation given by HDFC Quicker Realty of Rs. 48,00,000/- for the said property was incorrect since it was based on the property being an agricultural land, and that the valuation by Notiyal and Associates at Rs. 12,55,56,352/- was vastly different since the property was considered to be a commercial land in the same.
The Court noted that the subject property was one of nine properties for which the auction was permitted, and stated that the MPID Act had no provision regarding the release of property in the owner’s favour after an order for auction. The Court stated that it did not find any reason to permit the appellant to bid for the property, merely because it was not sold despite being put up for auction thrice.
Thus, the Court dismissed the appeal and held that the Trial Court had rightly rejected the appellant’s application for securing Rs. 48 lakhs when the other valuation report valued the property at Rs. 12,55,56,352/-.
Appearances:
For Appellant – Mr. Pradeep Yadav
For Respondents – Ms. Leena Patil (SPP), Mr. Prashant Mishra, Mr. Bharat Jadhav, Ms. Chahat Modi, Ms. Purva Birla, Ms. Ishita Bhaiya, Ms. Krish Kariya, Mr. Arvind Lakhavat, Mr. Vinit Vaidya, MZM Legal
