1 APEAL 523 OF 2011 vks IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL APPLICATION NO.1547 OF 2011 IN CRIMINAL APPEAL NO.523 OF 2011 Ankush Subhash Arora, .. Appellant -versus The State of Maharashtra .. Respondent. and Pradeep Ramchandra Raste .. Intervener. WITH CRIMINAL APPEAL NO.523 OF 2011 Ankush Subhash Arora, .. Appellant -versus The State of Maharashtra .. Respondent. Mr. A. M. Sarogi, with Mr. P. Tiwari and Rajendra Rathod, for the appellant Mr. K. V. Saste, APP for the Respondent State. Mr. Ravindra Adsure, i/b Mr. Vivek Salunke, for the Intervener. CORAM: R.C. CHAVAN, J. DATED: 22nd December, 2011 P.C. 1. This appeal is directed against the order dated 19th May, 2011, passed by the learned Additional Sessions Judge, Mumbai, dealing with cases under M. P. I. D. Act, Greater Bombay, directing the appellant to deposit a sum of Rs. 2 APEAL 523 OF 2011 13,76,52,808/- by adjusting a sum of Rs.2,00,00,000/- which was deposited by the appellant on 16th January, 2008 with accrued interest thereon whereupon the property bearing No.D-6/10, Vasant Vihar, New Delhi was to be released from attachment. 2. The case has a chequered history. The appellant is purchaser of the property at Vasant Vihar. New Delhi, which is under attachment in M.P.I.D. Case No.15 of 2001. This property belonged to Skymatic Group of companies. Skymatic group of companies had sought deposits from investors and there were about 443 investors, who had deposited in all 1,79,05,530/- which was supposed to have been be repaid by the company with interest at the rate of 16% per annum. The company defaulted. The investors approached the authorities. This is how complaint under the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 ( for short called as “M.P.I.D. Act”), came to be filed. The owners of the company transferred the property at Vasant Vihar, New Delhi, first by way of gift to family members who then transferred the property to present appellant by agreement of sale with a registered Power of Attorney. This property alongwith two other properties owned by Skymatic Group of Companies, came to be attached. Applicant claims to be bonafide purchaser of the property situated at Vasant 3 APEAL 523 OF 2011 Vihar, New Delhi. 3. The applicant filed the Application No.259 of 2004 for release of the property from attachment on depositing the amount to be ascertained by the Court towards liability. The prosecution by its reply stated that it has received claims of Rs.1,79,05,530/-. The prosecution stated that the market value of the property at Vasant Vihar, New Delhi was more than Rs. 3.23 crores. The learned Judge, M.P.I.D. Court, partly allowed application, directing the appellant to furnish cash security of Rs.1.63 crores. He ordered the appellant to be placed in possession of the property. Eventually the matter went to the Supreme Court in the form of Special leave Petition No.6280 of 2007. By Judgment dated 21st October, 2007, Supreme Court directed the M.P.I.D. Court, to endeavour to dispose of the application filed by the appellant within a period of two months. The Court noted that since the appellant was willing to deposit entire claim of investors and therefore, conditions stipulated in the order dated 25th January, 2005, would not apply. The S. L. P. was disposed of as having no merit. 4. Thereafter the matter again came before M.P.I.D. Court, which rejected the application for lifting attachment by order dated 25th February, 2008. The appellant carried the 4 APEAL 523 OF 2011 matter to this Court, by filing Criminal Appeal No.297 of 2008. By order dated 11th February, 2009, this Court allowed application for lifting attachment of property at Vasant Vihar, New Delhi. The matter went again to the Supreme Court in S.L.P. No.1856 of 2009, which was decided by the Supreme Court, by order dated 8th January, 2010. The counsel for the appellant (i.e. respondents before Supreme Court) had specifically stated that they would deposit amount re- determined by the Designated Court to meet the demands of all the investors before the said Court, adding that the amount already deposited with interests on it be adjusted. The Supreme Court directed the Designated Court to determine afresh the outstanding dues towards all the investors before it as on the date of passing of the order by it. This is how the Designated Court has passed the order dated 19th May,2011, which is impugned in the present appeal. 5. Learned counsel for the appellant sought to urge that the appellants are bonafide purchasers for the value without any notice of the claims of investors. He also submitted that it was necessary for the Government to issue under Section 4 of the Act an order and publish it in the official gazette if it transpired that the financial institution was not likely to provide services against deposits received, attaching money or properties in order to make payment of 5 APEAL 523 OF 2011 interest or other benefits assured to the depositors. He submitted that no such order has been published in the official gazette and therefore, there could be no attachment of the properties. The order dated 16th June, 2011 sought to be tendered by the learned Additional Public Prosecutor is not one which is contemplated by section 4 of the Act. However, it is not necessary to go into the question since it has been the appellant’s consistent stand before the M.P.I.D. Court as also before Supreme Court that the appellant would satisfy all the claims of the depositors. Therefore, these contentions are not open to the appellant. 6. The question simply is what is the amount which the appellant is required to deposit, pursuant to the orders passed by the Supreme Court on 8th January, 2010, directing the designated Court “to determine afresh outstanding dues towards all the investors as on the date of passing of the order”. It is the contention of a set of Investors that this order implies payment of interest accrued on the amount due at the rate of 16% per annum till the date of the order, while another set of investors who have filed Criminal Application No.1547 of 2011, for intervention have no objection to lift the attachment and to receive amount already deposited. The learned APP too submits that since depositors have lost their money for such a long time, they would be entitled to be 6 APEAL 523 OF 2011 compensated by payment of interest on the amounts due to them till they are actually paid. 7. There could be absolutely no doubt about the proposition that the depositors would be entitled to interest on their deposits. But this does not imply that the depositors would be entitled to interest on interest. They would be entitled to simple interest at the rate of 16% per annum on the amount due. Since the principal sum which was stated to be Rs.1.97 crores was covered by the deposit of Rs.2 crores made on 16th January, 2008, then there will be no question of interest accruing on that sum from that date. The depositors could have got those sums on that date and can now get the sums with the interest which might have accrued on account of investment, of that amount by the court. Therefore, the learned Judge of the M.P.I.D. Court, was required to calculate interest on the amounts of deposits till 16th January, 2008. The learned Judge has reached an inflated amount of Rs. 13,76,52,808/- by calculating amount of interest till the date of impugned order overlooking the fact that in doing so he was calculating interest on interest or awarding compound interest. Learned counsel for the appellant submits that the amount due towards interest, in addition to the sum of Rs. 2,00,00,000/- which has been deposited, would come to Rs. 2,83,68,000/-, whereas according to learned APP the amount 7 APEAL 523 OF 2011 would come to Rs.2,87,63,538/-. According to numerical minority of investors who, however, have bulk of investment, the amount would come to the same figure. In view of this the appeal is partly allowed by passing following order. ORDER I) The appellant shall deposit a sum of Rs. 2,87,63,538/- within a period of four weeks before the learned Designated Judge, M.P.I.D. Court, Greater Mumbai. In case of default in depositing this amount within the time fixed, the investors would be entitled to damages calculated at 16% per annum on the entire sum due i.e. Rs.2,00,00,000/- and Rs.2,87,63,538/- for being kept out of money due. II) On depositing the aforesaid amount, attachment of the property D-6/10, Vasant Vihar, New Delhi, would be lifted. III) Upon deposit of the amount, investors would be at liberty to receive the amount alongwith interest accrued upon investment by the Court, of the amounts in the bank on furnishing security to the satisfaction of trial Court, verification of the documents of entitlement and giving valid 8 APEAL 523 OF 2011 discharge to the appellants. IV)The appeal and intervention application stand disposed of accordingly. (R. C. CHAVAN, J.)