Case Note & Summary
The Bombay High Court allowed Criminal Appeal No. 813 of 2016 filed by Suresh Raju Shetty, challenging an order of the Designated Court under the Maharashtra Protection of Interest of Depositors (In Financial Establishment) Act, 1999 (MPID Act). The appellant was accused in a case registered in 2003 for cheating and other offences related to an investment company, Om Sai Capital and Leasing and Finance Private Limited. The complainant alleged that she and her relatives invested Rs.33 lacs with a promise of 25% interest per annum, but no interest or principal was repaid. The appellant was arrested and later released on bail. During investigation, certain properties including a vehicle and cash were seized. The appellant filed an application before the Designated Court for release of these properties, which was dismissed. The High Court held that the MPID Act does not authorize continued retention of property that is not proceeds of crime or linked to the deposits. The court directed the Designated Court to release the vehicle and cash to the appellant on conditions including furnishing a bond and undertaking to produce the property if required. The court also disposed of connected criminal applications. The judgment was delivered by a division bench of Justice S.C. Dharmadhikari and Justice Bharati H. Dangre on November 30, 2017.
Headnote
A) Criminal Procedure - MPID Act - Attachment of Property - Section 3 of MPID Act - The court considered whether seized property (vehicle and cash) not directly linked to the deposits can be retained by the State pending trial. Held that Section 3 of MPID Act does not authorize continued retention of property that is not proceeds of crime or acquired from deposits, and the Designated Court must release such property to the accused on appropriate conditions. (Paras 1-10)
B) Criminal Procedure - Interim Custody - Release of Seized Property - The court examined the power of the Designated Court to release property seized under MPID Act pending trial. Held that the court has discretion to release property not connected to the deposits, subject to conditions such as furnishing a bond and undertaking to produce the property if required. (Paras 11-20)
C) Criminal Procedure - Bail Conditions - Property Release - The court considered whether the Designated Court can impose conditions for release of property that are more onerous than necessary. Held that conditions must be reasonable and proportionate, and the court cannot impose a condition that effectively denies release. (Paras 21-28)
Issue of Consideration
Whether the Designated Court under the MPID Act can refuse to release seized property to the accused pending trial when the property is not alleged to be proceeds of crime or linked to the deposits, and whether the court can impose conditions for release.
Final Decision
The High Court allowed the appeal and set aside the order of the Designated Court. The court directed the Designated Court to release the vehicle and cash to the appellant on conditions including furnishing a bond and undertaking to produce the property if required. The connected criminal applications were disposed of.
Law Points
- MPID Act
- Section 3
- attachment of property
- proceeds of crime
- interim custody
- bail conditions
- property not linked to deposits
- release of seized property
Case Details
2017 LawText (BOM) (11) 71
Criminal Appeal No. 813 of 2016 with Criminal Application No. 57 of 2017, Criminal Application No. 238 of 2017, Criminal Application No. 658 of 2017, Criminal Application No. 1262 of 2017, Criminal Appeal No. 110 of 2017, Criminal Application No. 100 of 2017
S. C. Dharmadhikari, Smt. Bharati H. Dangre
Mr. S. P. Kadam i/b. Mr. Prashant Badole with Mr. R. P. Hake Patil for the appellant in Criminal Appeal No.813 of 2016, Mr. Amogh Singh i/b. Mr. D. P. Singh for the appellant in Criminal Appeal No. 110 of 2017, Mr.Vinay Bhanushali for respondent no.3 in Criminal Appeal No. 110 of 2017 and for respondent no. 2 in Criminal Appeal No. 813 of 2016, Mr. J. P. Yagnik-APP for State
State of Maharashtra and Anr.
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Nature of Litigation
Criminal appeal against order of Designated Court under MPID Act refusing release of seized property to accused pending trial.
Remedy Sought
Appellant sought release of vehicle and cash seized during investigation, which were not alleged to be proceeds of crime.
Filing Reason
Appellant challenged the order dated 16th November 2016 passed by the Designated Court in MPID Special Case No. 8 of 2005 along with 11 of 2003 and 10 of 2012, dismissing his application for release of property.
Previous Decisions
The Designated Court dismissed the appellant's application for release of seized property. The appellant was arrested on 11th March 2003 and released on bail on 14th April 2003. Co-accused Sunita Suresh Shetty was discharged by the Special Judge.
Issues
Whether the Designated Court under the MPID Act can refuse to release seized property to the accused pending trial when the property is not alleged to be proceeds of crime or linked to the deposits.
Whether the court can impose conditions for release of property that are more onerous than necessary.
Submissions/Arguments
Appellant argued that the seized property (vehicle and cash) is not proceeds of crime and is not linked to the deposits, and therefore the MPID Act does not authorize its continued retention.
Respondent State argued that the property may be required for the purpose of trial and that the Designated Court has discretion to retain it.
Ratio Decidendi
Section 3 of the MPID Act does not authorize continued retention of property that is not proceeds of crime or acquired from deposits. The Designated Court has discretion to release such property to the accused pending trial on appropriate conditions, which must be reasonable and proportionate.
Judgment Excerpts
This appeal (Criminal Appeal No. 813 of 2016) challenges an order passed by the learned Special Judge presiding over the court known as Designated Court under the Maharashtra Protection of Interest of Depositors (In Financial Establishment) Act, 1999.
The appellant before this court Shri. Suresh Raju Shetty is the original accused.
It is contended that the accused had started an investment company in the year 1995 in the name and style as 'Om Sai Capital and Leasing and Finance Private Limited'.
Procedural History
FIR registered on 28th January 2003 at Mulund Police Station, Mumbai for offences under IPC. Investigation transferred to State CID. Charge-sheet filed. Matter pending before Designated Court under MPID Act. Appellant arrested on 11th March 2003, released on bail on 14th April 2003. Application for release of seized property dismissed by Designated Court on 16th November 2016. Appeal filed in High Court.
Acts & Sections
- Maharashtra Protection of Interest of Depositors (In Financial Establishment) Act, 1999: Section 3
- Indian Penal Code, 1860: 406, 420, 120B
