1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION WRIT PETITION NO.462 OF 2008 WITH WRIT PETITION NO.822 OF 2008 AND WRIT PETITION NO.6 OF 2009 Asset Reconstruction Company (India) Ltd. .. Petitioner V/s The State of Maharashtra & Ors. .. Respondents Mr.Shyam Mehta with Mr..Faisal Sayyed & Mr.Mayur Bhojwani i/by M/s.M.K.Ambalal & Co.for the petitioners in all petitions. Mrs.A.S.Pai, APP for the State in all petitions. Mr.Nitin Pradhan with Mr.S.C.Naidu and Mr.Mahesh Ayare i/by Mr.D.P.Devadiga for Respondent No.2 in W.P.No.6/2009. Mrs.Prachi Mhatre i/by M/s.Bodhanwala & Co. for Res.No.3 in W.P.No.6/2009. Mr.I.A.Bagaria i/by Mr.Ramesh Shiroya for Res.No.9 in W.P.No.6/2009. Mr.J.J.Bhatt, Sr.Advocate with Mr..Rui Rodrigues i/by India Law Alliance for Respondent No.2 in W.P.No.462/2008. Mr.Ashok Mundergi, Sr.Advocate with Mr.Rajendra Savenkar for Respondent No.2 in W.P.No.822/2008. Mr.M.P.Rao with Mr.Mustafa Kachwala i/by Mustafa Kachwala for the applicant in the application in W.P.No.462/2008. CORAM : P.B.MAJMUDAR & R.G.KETKAR, JJ. DATE : 24TH FEBRUARY, 2010 ORAL JUDGMENT : (Per P.B.Majmudar, J.) 1. Heard all the learned counsel appearing for the parties. Rule was already issued in Writ Petition No.462/2008 & Writ Petition No.822/2008. Hence we 2 issue Rule in Writ Petition No.6/2009. Mrs.A.S.Pai waives service on behalf of Respondent Nos.1, 6 & 7. Mr.D.P.Devadiga waives service on behalf of Respondent No.2. M.S.Bodhanwala & Co. waives service for Respondent No.3. Mr.Ramesh Shiroya waives service for Respondent No.9. All these petitions were set down today for final hearing. We may state that in all these petitions, the Respondent No.2 is the main contesting Respondent. 2. In Writ petition No.462/2008 challenge is to the judgment and order dated December 5, 2007 at Exh. G and February 20, 2008 atExh. M in ” ” ” ” Misc.Application No.36 of 2007 filed by Respondent No.2 before the Special Court. In Writ Petition No.822/2008 challenge is to the order dated March, 17, 2008 passed in the Misc.Application No.36 of 2008 filed by Respondent No.2 before the Special Court. In Writ Petition No.6/2009 challenge is to the order dated October 15, 2008 passed in Misc.Application filed by Respondent No.2 on September 9, 2008 before the Special Court. Since the controversy raised in all these petitions is identical, all these petitions are being disposed of by this common order. 3. The petitioner Company is incorporated under the Companies Act, 1956 and registered as a Securitisation Company and Asset Reconstruction Company pursuant to section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. It is the case of the petitioner Company that pursuant to the Deeds of Assignment dated June 30, 2004 and December 31, 2004 the ICICI Bank Limited and the Karnataka Bank Limited have unconditionally and 3 irrevocably assigned, transferred and released in favour of the petitioner company in their capacity as trustee of Arcil-CPS-002-1 Trust and Arcil- CPS-006-1 Trust, all the financial assistance extended to Respondent No.2 in Writ Petition No.462/2008, as also to Nestler Limited of which Respondent No.2 in Writ Petition No.822/2008 is one of the Directors, and to the Respondent No.2 in Writ Petition No.6/2009 who is one of the Directors of Sun-Earth Ceramics Limited. 4. The State of Maharashtra enacted law viz. Maharashtra Protection of Interest of Depositors (in Financial Establishment) Act. 1999 (in short the MPID Act ). The said act was enacted for the benefit of the depositors. “ ” Under the said act, there is a provision for attachment of the property by the competent authority. Such competent authority as prescribed under the said act is the authority not below the rank of Deputy Collector. 5. The vires of MPID act was challenged before this Court in several writ petitions. The Full Bench of this Court by order dated September 5, 2005 struck down the said act on the ground of legislative competence of the State Legislature. This Court granted Certificate under Article 134A of the Constitution of India as the case involved substantial question of law as to interpretation of the Constitution. In the appeals which are pending before the Supreme Court application for interim relief was preferred on behalf of the petitioner company. The Apex Court by its order dated November 18, 2005 passed the following interim order:- Heard both sides. “ In view of the amount involved in the various transactions and the 4 number of prosecutions launched under the provisions of Maharashtra Protection of Interest of Depositors (in Financial Establishment) Act, 1999, we grant interim stay in the following manner: In case where investigations are in process the prosecuting agency shall continue with the investigation. But there shall not be further prosecutions of the accused persons and as records pending cases the status quo as on today shall be maintained. It is submitted that in 9 cases already accused persons have been convicted and the convicted persons could be at liberty to apply for bail and the court would be at liberty to pass order granting bail. The interim attachment granted by the competent authority shall subsist until further orders. However, in case where applications for release of attachment have been filed the same should be disposed for accordance with law by separate orders. There shall not be sale of attached properties. The Authorities shall not take any coercive steps to recover the amount under the Act. Issue notice in IA Nos.6-10 returnable within a period of four weeks. Permission granted for filing appeals. The convicted and the under-trials be released on bail.” 6. In the meanwhile, the petitioner company initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the Securitisation Act ). In an “ ” application preferred under the MPID Act, the 2nd Respondent in all the writ petitions made applications before the Special Court as under the MPID Act the concerned Directors are held personally liable in connection with deposits taken from the depositors and the penal consequences are also provided. The Respondent No.2 Directors in all these petitions made separate applications before the Special Court, interalia praying that the petitioner company may be restrained from proceeding with the action in terms of the notice issued u/s.13(2) of the Securitisation Act. The applications were made on the basis that by virtue of the interim order passed by the Apex Court on November 18, 2005 the interim attachment 5 made by the competent authority shall subsist until further orders of the Apex Court and that the authorities shall not sale attached properties. It was therefore submitted that the proceedings initiated by the Petitioner company under the provisions of the Securitisation Act are contrary to the order passed by the Apex Court and also are not maintainable. 7. By the impugned orders referred earlier, the Special Court came to the conclusion that in view of the order of the Apex Court, it was not open for the petitioner to act further on the basis of notice given u/s.13(2) of the Securitisation Act. Accordingly, the Special Court allowed the applications made by Respondent No.2 Directors in each of these petitions. Against these orders the above petitions are preferred by the petitioner Company. 8. The learned counsel Mr.Mehta appearing for the petitioners in each of the petitions, vehemently submitted that the Special Court has no jurisdiction to entertain such application on the ground that no such application was pending at the relevant time i.e.at the time when the Supreme Court passed the order on November 18, 2005 and the Special Court has no jurisdiction to entertain such application. Mr.Mehta further submitted that so far as Securitisation Act is concerned, same is the central act which is enacted in 2002 and it will have overriding effect over any other laws for the time being in force and the attachment of the property under the said act will have overriding effect qua the attachment made under any other laws. He further submitted that in any case if the Respondent No.2 6 in each writ petitions have any grievances for the action taken by the petitioner company under the said Act, the statutory remedy of preferring the appeal before the Debt Recovery Tribunal is available and the Special Court has no jurisdiction to deal with the said matters. 9. Mr.Bhat, Mr.Pradhan and Mr.Naidu, learned counsel appearing in each of these petitions for the Respondent No.2 submitted that the order passed by the Special Court can be treated as in aid to the order of Hon ble ’ Supreme Court and it can be construed as an order passed under Article 144 of the Constitution of India. The learned counsel for the Respondent No.2 ultimately submitted that in order to obtain appropriate clarification from the Hon ble Supreme Court as to whether it is open for the ’ petitioner to proceed under the Securitisation Act inspite of the Supreme Court order dated November 18, 2005 or for obtaining any other order in connection with the action taken by the petitioner under the said Act, they would like to approach the Apex Court. They further state that they want to withdraw the applications made before the Special Court. 10. In view of the above statement made by Counsel appearing on behalf of Respondent No.2 in all the writ petitions, the applications given by the Respondent No.2 in each of the petitions before the Special Court, being Misc.Application No.36 of 2007 filed by Respondent No.2 in W.P.No. 462/2008, Misc.Application No.36 of 2008 filed by Respondent No.2 in W.P.No.822/2008, and Misc.Application filed on September 9, 2008 by Respondent No.2 in W.P.No.6/2009 before the Special Court stand 7 withdrawn. The impugned orders which are passed on these Misc.Applications and which are challenged before us stand set aside as the original applications stand withdrawn. Liberty is given to the concerned Respondent No.2 in all the petitions to move the Hon ble ’ Supreme Court as they want to either obtain clarification from the Hon ble Supreme Court or to take out any other proceedings in ’ connection with the action taken by the petitioner under the Securitisation Act, as well as to approach any other forum/court whereby they can challenge the said action taken by the petitioner. We may clarify that on these aspects we have not expressed any opinion. 11. Leraned APP Mrs.Pai, on instructions from the officer who is present in court, submits that the order under section 4 (1) (ii) of the MPID Act in respect of the immovable property is not published in the official gazette by the Government. Learned counsel appearing for the Respondent No.2 however submits that they were informed about the attachment by the MPID Court and certain amount is deposited by the Respondent No.2 with the Economic Offences Wing. On this aspect it is not necessary for us to express any opinion. 12. On merits of the issue we have not expressed any opinion, since the Respondent No.2 in each of the petitions wants to approach the Hon ble ’ Supreme Court for obtaining suitable orders mentioned hereinabove. The interim relief granted earlier is ordered to be continued for a period of six weeks from today. 8 13. Rule is made absolute in the aforesaid terms in all the writ petitions, with no order as to costs.. (R.G.KETKAR, J.) (P.B.MAJMUDAR, J.)