Case Note & Summary
The case involves an appeal under Section 11 of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 (MPID Act) against an order dated 21.09.2018 passed by the Additional Sessions Judge-4, Amravati, rejecting the appellants' objection under Section 7(3) of the MPID Act to the attachment of field Survey No.78 admeasuring 5H 10R situated at Mouja Kathora Bk., Tq. and Dist. Amravati. The appellants, Manohar Bhimraoji Mahalle and others, are not accused in the MPID case but claim ownership of the property based on a sale deed dated 1995. The property was attached by the Special Court in Spl. MPID Case No.290/2016 on the ground that it was proceeds of crime from a deposit scheme run by the accused. The appellants filed an objection under Section 7(3) of the MPID Act, which was rejected by the trial court. The High Court, after hearing the parties, allowed the appeal and set aside the impugned order. The court held that the appellants had successfully demonstrated that the property did not belong to the accused and was not proceeds of crime. The property was purchased by the appellants in 1995, long before the alleged deposit scheme, and the revenue records and sale deed supported their ownership. The court noted that the trial court had erred in relying solely on the complaint's designation of the property as proceeds of crime without considering the evidence on record. The court directed the release of the attachment and restoration of possession to the appellants.
Headnote
A) MPID Act - Attachment of Property - Objection under Section 7(3) - Burden of Proof - The objector must prove that the attached property does not belong to the accused or is not proceeds of crime. The court must consider evidence on record and not merely rely on the designation of the property as 'proceeds of crime' in the complaint. (Paras 1-10) B) MPID Act - Proceeds of Crime - Property Belonging to Third Party - The property in question, Survey No.78, was purchased by the appellants in 1995, prior to the alleged deposit scheme of the accused. The sale deed and revenue records show the appellants as owners. The property cannot be considered proceeds of crime as there is no evidence linking it to the deposits. (Paras 11-15) C) MPID Act - Section 7(3) - Release of Attachment - The appellants, being bona fide purchasers for value without notice of any fraud, are entitled to release of attachment. The trial court erred in rejecting the objection solely on the ground that the property was shown as proceeds of crime in the complaint. (Paras 16-20)
Issue of Consideration
Whether the appellants, who are not accused in the MPID case, have successfully shown that the attached property does not belong to the accused or is not proceeds of crime, thereby entitling them to release of attachment under Section 7(3) of the MPID Act.
Final Decision
The appeal is allowed. The impugned order dated 21.09.2018 passed by the Additional Sessions Judge-4, Amravati is set aside. The objection of the appellants under Section 7(3) of the MPID Act is allowed, and the attachment of field Survey No.78 is directed to be released. The property shall be restored to the appellants.
Law Points
- Attachment of property under MPID Act
- Objection under Section 7(3)
- Burden of proof on objector
- Proceeds of crime
- Property not belonging to accused
