:1: IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE SIDE CRIMINAL APPELLATE SIDE CRIMINAL APPELLATE SIDE CRIMINAL APPEAL NO.297 OF 2008 CRIMINAL APPEAL NO.297 OF 2008 CRIMINAL APPEAL NO.297 OF 2008 IN IN IN MISC. APPLICATION NO.109 OF 2007 MISC. APPLICATION NO.109 OF 2007 MISC. APPLICATION NO.109 OF 2007 IN IN IN SPECIAL CASE NO.15 OF 2001 SPECIAL CASE NO.15 OF 2001 SPECIAL CASE NO.15 OF 2001 WITH WITH WITH CRIMINAL APPLICATION NO.362 OF 2008 CRIMINAL APPLICATION NO.362 OF 2008 CRIMINAL APPLICATION NO.362 OF 2008 R.S.A. Builders through its sole Proprietor Mr.Ankur Arora s/o Subhash Arora, residing at D-10 Greater Kailash Enclave Part II) New Delhi ...Appellant/ Org.Applicant. v. The State of Maharashtra through G.B.C.B., C.I.D., Crawford Market, Mumbai. ..Respondent. v. Maj. Kul Bhushan Parti & Ors. residing at D-6-10, Vasant Vihar, New Delhi 110 057. ...Respondent/ Accused. And Ashok Lymn, Coelho 305, Chawla House, 62, Wodehouse, Road, Colaba, Mumbai-5 ...Respondent/ Complainant. WITH WITH WITH CRIMINAL APPEAL NO.738 OF 2005 CRIMINAL APPEAL NO.738 OF 2005 CRIMINAL APPEAL NO.738 OF 2005 IN IN IN SPECIAL CASE NO.15 OF 2001 SPECIAL CASE NO.15 OF 2001 SPECIAL CASE NO.15 OF 2001 R.S.A. Builders through its sole Proprietor Mr.Ankur Arora s/o Subhash Arora, residing at D-10 Greater Kailash Enclave Part II) New Delhi ...Appellant/ Org.Applicant. v. :2: The State of Maharashtra through G.B.C.B., C.I.D., Crawford Market, Mumbai. ..Respondent/ Complainant. v. Maj. Kul Bhushan Parti & Ors. residing at D-6-10, Vasant Vihar, New Delhi 110 057. ...Respondent/ Accused. And Krishan Chand Narang & Ors. ...Respondents/ Org. Applicant. WITH WITH WITH CRIMINAL APPEAL NO.63 OF 2002 CRIMINAL APPEAL NO.63 OF 2002 CRIMINAL APPEAL NO.63 OF 2002 R.S.A. Builders through its sole Proprietor Mr.Ankur Arora s/o Subhash Arora, residing at D-10 Greater Kailash Enclave Part II) New Delhi ...Appellant/ Org.Applicant. v. 1. The State of Maharashtra through G.B.C.B., C.I.D., Crawford Market, Mumbai. 2. Alda Coelho ..Respondent/ Org. Complainant. Mr.A.M.Saraogi with Rajendra Rathod & Priyatosh Tiwari, advs. for the appellant. Mr.J.P.Yagnik, APP for the State. Mr.M.S.Mohite, adv. for the respondents/complainant. Mr.Chaitanya Pendse, adv. for the Applicant (in Cri.Appln.352 of 2007). Mr.Rajesh Datar i/by Mr.Rahul D. Oak, advs. for Intervenor. CORAM: R.V.MORE, J. CORAM: R.V.MORE, J. CORAM: R.V.MORE, J. DATED: 11TH DATED: 11TH DATED: 11TH FEBRUARY, 2009. FEBRUARY, 2009. FEBRUARY, 2009. :3: ORAL JUDGMENT: ORAL JUDGMENT: ORAL JUDGMENT: 1. Heard Mr.Saraogi the learned counsel for the appellant, Mr.Yagnik learned APP for the Respondent/State and Mr.Manoj Mohite the learned counsel for the respondent/complainant. 2. The appellant takes exception to the order dated 25th February, 2008 passed by the Special Judge for C.B.I. in Miscellaneous Application No.109 of 2007 whereby and whereunder, the appellant’s application for lifting of attachment of the property as described in the application under Section 9 of the Maharashtra Protection of Interest of Depositors (In Financial Establishment) Act, 1999 (In short ’M.P.I.D. Act’) came to be rejected. 3. Brief facts for the purpose of disposal of this appeal are as follows: 4. Absconding accused Major Kulbhushan Parti, his son Deepak K. Parti and other persons have floated a company by name M/s. Skymatic Finance Limited and opened its branches at various places in India including branch of Mumbai. By giving wide publicity to its scheme, they have invited deposits from the public by offering heavy returns in the form of exorbitant interest rates, etc. over amount deposited. They also :4: used to give post dated cheques of the amount to be payable on maturity to the investors/depositors. By making inducement to invest amount in the company of accused persons and by making deliberate false promises to pay heavy returns on their investments, they induced large number of persons to invest in their company. It is the prosecution case that large number of investors invested a sum of Rs.1,79,05,530/-. Accused after collecting huge amount have absconded and have not honoured the cheques issued to the depositors. On receipt of large number of complaints, case was registered against Major Kulbhushan Parti, his son Deepak Kulbhushan Parti and Pankaj Mohanlal Kejriwal, a manager for committing offences punishable under Sections 406, 420 r/w. Section 120(B) of the Indian Penal Code and Section 3 of M.P.I.D. Act vide C.R.No.51/1998, on the basis of complaint lodged by Shri Ashok Lino Coelho. The above accused since absconding have declared as ’proclaimed offenders’ by the Designated Court under M.P.I.D. Accused Pankaj Mohanlal Kejriwal was arrested, however, he has been released on bail. 5. During the course of investigation, it was revealed that accused are having their house bearing no.D-6/10, Vasant Vihar, New Delhi (In short ’Suit Property’) and it was further revealed that wanted accused no.1 had gifted the said property to his wife, :5: son and daughter-in-law by three different gift deeds and who in turn have entered into agreements of sale of said property with M/s.R.A.S. Builders, the present appellant. Special Court thereafter issued notice on 9.10.2001 to the appellant to show cause as to why the said property be not attached under Section 8 of the M.P.I.D. Act. In response to the notice, the appellant appeared and objected to the proposed action of attachment of the property. Designated Court, however, after hearing the prosecution, original complainant and the present appellant by its order dated 8-11-2001 overruled the objections of the appellant and attached the suit property. 6. The appellant thereafter preferred an application being Miscellaneous Application No.194 of 2001 with a request to raise attachment on the ground that after purchase of the property, he has developed the same after taking permission from the Competent Authority, namely, Delhi Municipal Corporation and thereafter, created a third party interest in favour of the four persons. This application was also rejected by the Designated Court by an order dated 10th December, 2001 mainly on the ground that the appellant is not a bonafide purchaser. 7. Appellant thereafter preferred Miscellaneous Application No.259 of 2004 in Special Case No.15 of 2001 :6: under Section 9 of the M.P.I.D. Act. The appellant relying upon the provisions of Section 9, showed willingness to give cash security of one crore of rupees and requested that attachment on the suit property be lifted. This application was disposed off by the learned Designated Court after hearing the concerned parties. The appellant’s application was partly allowed. Attachment was not lifted. However, interim possession/custody of the same was granted to the appellant on furnishing cash security of Rs.1,63,00,000/-. Interim custody was granted subject to several conditions. 8. The appellant being aggrieved approached this Court by filing Criminal Appeal No.738 of 2005. In this appeal, the appellant has filed Criminal Application No.339 of 2007 for interim reliefs. The above Criminal Application came to be disposed off by the learned Single Judge of this Court on 6th September, 2007 and the liberty was granted to the appellant to approach the M.P.I.D. Court afresh. This liberty was granted since the appellant showed the willingness to deposit two crores of rupees in the trial Court coupled with the observations of the learned Judge of the Designated Court in an order dated 25th January, 2005 that in case, the appellant deposits two crores of rupees, he will consider raising of the entire attachment of the suit property. :7: 9. The appellant approached the Apex Court by filing Special Leave Petition No.6280 of 2007. This SLP was disposed off by the Apex Court by an order dated 29-10-2007. Similar willingness to deposit two crores of rupees was showed before the Apex Court and, therefore, the Apex Court in view of the willingness and the above observations of the Designated Court, gave liberty to the appellant to approach M.P.I.D. Court. The appellant thereafter approached the M.P.I.D. Court and filed a fresh application being Miscellaneous Application No.109 of 2007. The appellant also deposited an amount of two crores of rupees as per the willingness given by it in this Court and the Supreme Court. The learned Special Judge disposed off this application by the order dated 25th February, 2008 and rejected the appellant’s application for lifting of attachment of the property. The amount of two crores which was deposited by the appellant was also directed to be invested in the fixed deposit in the name of the Court, in State Bank of India, Fort branch. This order is subject matter of the present appeal. 10. Mr.Saraogi the learned counsel appearing for the appellant submitted that the suit property was attached under Section 8 of the M.P.I.D. Act after giving notice to the appellant, which presuppose that the appellant is the owner of the property. He further submitted that :8: Section 9 of the M.P.I.D. Act contemplates the application by any Financial Establishment or person whose property has been or is about to be attached. He submitted that according to the prosecution itself, large number of investors made investment in a company of the accused to the tune of Rs.1,79,05,530/- and this investment alongwith the interest on the date of maturity comes to Rs.1,97,00,000/-. Therefore, he submitted that there should not be any objection either by the prosecution or by the investors for lifting attachment of the suit property. He also relied upon the order dated 25th January, 2005 passed by the learned Designated Judge, M.P.I.D. Court in Miscellaneous Application No.259 of 2004. In the above facts, he submitted that the appeal deserves to be allowed by quashing and setting aside the order impugned in the appeal. 11. Mr.Manoj Mohite, learned counsel for the respondent/complainant per contra supported the impugned order. He submitted that the appellant is not a bonafide purchaser. He took me through the checkered history of the matter and submitted that the appellant is not a bonafide purchaser of the suit property. He further submitted that the appellant on the basis of execution of sale agreements coupled with the registered power of attorney of the original owners of the suit :9: property can not be said to have become owner of the suit property and, therefore, application under Section 9 of the M.P.I.D. Act is not maintainable. He also submitted that while passing the order under Section 9 of the M.P.I.D. Act, Special Court or Designated Court obliges to protect the interest of the small investors. He submitted that the suit property was purchased by the accused with an amount collected by them by way of investment in their company. He also submitted that market value of the suit property is much more than the two crores of rupees. He lastly submitted that investors are entitled not only for the amount alongwith interest on the date of maturity but also interest thereafter till today. 12. Mr.Yagnik the learned APP adopted the arguments of Mr.Mohite. 13. The learned Special Judge rejected the appellant’s application under Section 9 of the M.P.I.D. Act for lifting of the attachment of the suit property by the impugned order mainly on two grounds, namely, that the appellant is not a bonafide purchaser so as to maintain application under Section 9 of the M.P.I.D. Act and secondly, he has not acquired ownership rights by virtue of documents in question, namely, agreements, :10: Power of Attorney, etc. In my considered view, both the grounds have no substance. Let us first consider ground regarding bonafide purchaser. Section 9 of the M.P.I.D. Act contemplates an application to the Designated Court either by any financial institution or a person whose property has been or is about to attach under the M.P.I.D. Act. Section further reads that upon giving sufficient security to the satisfaction of the Designated Court by the financial establishment, Court may cancel the order of attachment. Section 9 of the M.P.I.D. Act covers attachment under Section 4 as well as under Section 8 of the M.P.I.D. Act. Section 4 of the M.P.I.D. Act speaks of attachment attaching the property believed to have been acquired by the financial establishment either in its own name or in the name of any other person out of the deposits collected by the financial establishment. Section 8 contemplates attachment by the Court. This section authorises Designated Court not only to attach the property of the financial establishment but also to attach the property which is malafidely transferred to any person by the financial establishment. Thus, in my considered view, application under Section 9 can also be preferred by person whose property is attached under Section 8 as stated above. Since Section 8 covers malafide transfers, it can not be said that the appellant’s application under Section 9 is not maintainable. Findings of the learned Special Judge is, therefore, :11: contrary to law. 14. This takes me to consider another ground on which the appellant’s application is rejected, namely that the appellant has not proved ownership of the property. It is the case of the appellant that the accused transferred the suit property by way of gift deeds to his wife, son and daughter-in-law and these persons in turn entered into development agreement with the appellant for the consideration of an amount of one crore. He submitted that all the owners also executed registered power of attorney in favour of the appellant authorising him to develop the property and transfer the same to third party. In pursuance of development agreement and registered power of attorney, the appellant demolished original structure and after obtaining building permission from the Competent Authority, namely, Delhi Municipal Corporation constructed basement plus three floors and transferred it to Mr.Naresh Agarwal, Smt. Rita Dixit, Mr.Raj Kumar and Mr.Siddharth Sethi for a consideration. He also relied upon the judgment of the Delhi High Court reported in 1999, Rajdhani Law Reporter, 20 in Kuldip 1999, Rajdhani Law Reporter, 20 in Kuldip 1999, Rajdhani Law Reporter, 20 in Kuldip Singh Suri v. Surinder Singh Singh Suri v. Surinder Singh Singh Suri v. Surinder Singh. After going through the documents referred to by Mr.Saraogi and after hearing the submissions of Mr.Mohite the learned counsel for the respondents, it can not be said that the appellant has no right in the suit property. The learned Single Judge :12: of Delhi High Court in Kuldip Singh Suri (Supra) Kuldip Singh Suri (Supra) Kuldip Singh Suri (Supra) observed that Power of Attorney sales in Delhi is the common mode of sale of immovable properties to get over the legislative restriction on transfer of properties. It is further observed that when Power of Attorney is for consideration and bargain is followed by delivery of possession then the transaction is complete. The appellant has parted with one crore to his transferors. He has constructed on the suit property. For that purpose he had invested huge amount. Registered Power of Attorney authorises the appellant to demolish the original property, to reconstruct and to create third party interest in the same. In that view of the matter coupled with the ratio of the Single Judge of Delhi High Court, I am of the view that the learned Special Judge committed error in rejecting the appellant’s application under Section 9 of the M.P.I.D. Act on the ground that he has not proved ownership. 15. Now I will consider whether the cash security of two crores rupees is satisfactory and sufficient to lift the attachment on the suit property. The Investigating Officer, Dilip Bapurao Thorat, Inspector of Police, presently attached to Unit VII, Economic Offences Wing, Crime Branch, CID, Mumbai has filed affidavit dated 28th January, 2009 in this proceeding. In paragraph 3 of the affidavit, he has categorically stated as follows: :13: "3. I say that the total no. of investors that have complained to E.O.W. are 443 and the principal amount invested by them is Rs.1,79,05,530/-. I say that the total outstanding of Rs.1,97,61,623/- on the maturity date i.e. in month of May, 1998 including the interest @ 16% was outstanding. And subsequently the above named applicant, who has approached to the Special Court for MPID & filed application bearing no.259 of 2004." The learned Special Judge in paragraph 20 of the impugned order made following observation: "So the prime duty of this MPID Court is to protect the interests of depositors. In this case total interest of the deposited amount goes to Rs.1,79,05,530/-." . The learned judge of the Designated Court who disposed off the Miscellaneous Application No.259 of 2004 by his order dated 25th January, 2005 also found that total investment in the company of the accused by the large number of investors is to the tune of Rs.1,79,05,530/-. It is further observed in this order that the amount of investment alongwith the interest thereon at the rate of 16 % on the date of maturity comes to Rs.1,97,61,620/-. The appellant has deposited an amount of two crores of rupees towards the cash security in lieu of the attachment. In my considered view, this amount is sufficient to protect the interest of the respondent/complainant and other investors. 16. The above discussion deals with the submissions :14: of Mr.Manoj Mohite regarding bonafide purchaser, ownership of the appellant and the interest of the minor investors. At this stage, it is worth to mention that all the four persons who alleged to have purchased the suit property have filed affidavit in this Court and have given no objection for lifting attachment in favour of the appellant. 17. In the facts and circumstances mentioned above, I find merit in the appeal. In my considered view, the learned Special Judge for the CBI committed error in rejecting the appellant’s application. I, therefore, quash and set aside the impugned order and allow the appellant’s application, at Exhibit 109, in following terms: i. Miscellaneous Application No.109 of 2007 filed by the appellant for lifting of the attachment of the suit property, namely, D-6/10, Vasant Vihar, New Delhi is hereby allowed. ii. Registrar, Sessions Court is directed to invest an amount of two crores of rupees deposited by the appellant in a fixed deposit in the name of Sessions Court in State Bank of India, Fort Branch initially for a period of 5 years and it be renewed thereafter from time to time till further orders. Needless to mention that an amount of two crores of rupees will be subject :15: to the final outcome of the Special Case No.15 of 2001. iii. Mr.Mohite at this stage requests stay to this order for a period of four weeks. Mr.Saraogi the learned counsel for the appellant does not oppose this request seriously. In view of the concession by Mr.Saraogi and in the interest of justice, this order is stayed for a period of four weeks from today. 18. Appeal stands disposed off. 19. As the appeal itself is disposed off, Criminal Application No.362 of 2008 does not survive and stands disposed off accordingly. 20. Criminal Appeal No.738 of 2005 will not survive in view of the disposal of Criminal Appeal No.297 of 2008 and the same is accordingly dismissed. 21. It is further made clear that one Smt. Alda Coelho has taken out Criminal Application No.352 of 2007 for perjury and forgery against the appellant in Criminal Appeal No.738 of 2005. Criminal Appeal No.738 of 2005 is disposed off as it does not survive. Application for forgery and perjury being independent of criminal appeal, the same survives and the same is kept pending. :16: 22. Criminal Appeal No.63 of 2002 is not on board. Mentioned for production. Production allowed. Mr.Saraogi the learned counsel for the appellant seeks leave to withdraw this appeal as the same has become infructuous in view of the disposal of the Criminal Appeal No.297 of 2008. Leave granted. Criminal Appeal No.63 of 2002 stands disposed off. (R.V.MORE, J.) (R.V.MORE, J.) (R.V.MORE, J.)