STATE OF MAHARASHTRA versus AVINASH
[2017] 8 S.C.R. 896, Supreme Court of India, 2017
Outcome: Appeal(s) allowed (Granted)
Segment: Facts
[2017] 8 S.C.R. 896 
A 
STATE OF MAHARASHTRA 
v. 
AVINASH 
(Criminal Appeal No. 1580 of2017) 
B 
SEPTEMBER 07, 2017 
[N. V. RAMANA AND DR. D.Y. CHANDRACHUD, JJ.J 
Administration of justice - Abuse of process of law - FIR 
alleging that the complainant had been fraudulently induced to part 
C with Rs 2. 74 crores by way of investment - Pursuant thereto, 
offences registered under various provisions of /PC and uls. 3, MPID 
Act, 1999 - Respondent arrested but granted bail in terms of the 
undertaking filed by him - His bank accounts attached uls.102, 
CrPC - Application by respondent before Division Bench in High 
Court praying for quashing of FIR and de-freezing his bank 
D accounts, subsequently withdrawn - Application by respondent 
before Single Judge in High Court for de-freezing his bank accounts 
- Single Judge directed lifting of the restraint on the operation of 
bank accounts of the respondent - Plea of appellant-State that as 
the respondent withdrew his application before the Division Bench, 
E it was an abuse of process to seek and obtain similar relief before 
Single Judge - Held: On facts, the filing of application before Single 
Judge for quashing the FJR and for de-freezing the bank accounts 
constituted a manifest abuse of process - Single Judge was not 
apprised of the fact that the earlier application seeking virtually 
the same relief had not been pressed before the Division Bench and 
F had been withdrawn -
Order of Single Judge set aside -
Maharashtra
Protection of Interest of Depositors (In Financial 
Establishments) Act, 1999- ss.3, 4, 5, 7 and 14 - Code of Criminal 
Procedure, 1973 - ss.102, 482 - Penal Code, 1860 - ss. 406, 420, 
506 and 120B. 
G 
Maharashtra Protection of Interest of Depositors (Jn 
H 
Financial Establishments) Act, 1999 - ss. 4, 5, 7 and 14 - Overriding 
power - Effect of - FIR alleging that respondent fraudulently 
induced the complainant to part with Rs 2.74 crores by way of an 
investment - Pursuant thereto, offences registered under various 
provisions of /PC and uls. 3, MPID Act, 1999 - Bank accounts of 
896
STATE OF MAHARASHTRA v. AVINASH 
897 
respondent attached uls.102, CrPC - Whether bank accounts of A 
the respondent could have been frozen by taking recourse to the 
provisions of Cr PC notwithstanding the special provisions contained 
in the MPJD Act - Held: Jn terms of the view taken in the present 
case, it is not necessary to address the said question of law - Code 
of Criminal Procedure, 1973 - s.102. 
Allowing the appeal, the Court 
HELD: The High Court was moved in an application under 
Section 482 of the CrPC, with a specific prayer for de-freezing 
B 
his bank accounts. This prayer, together with the other reliefs 
.(including that for quashing the FIR) was not pressed and the c 
application was disposed of as withdrawn on 29 June 2016 by the 
Division Bench. In this background, the filing of another 
application before the Single Judge on 1 July 2016 for quashing 
the FIR and for de-freezing the bank accounts constituted a 
manifest abuse of process. The Single Judge was evidently not 
apprised of the fact that the earlier application seeking virtually D 
the same relief had not been pressed before the division bench 
and had been withdrawn. Consequently, there is merit in the 
submission urged on behalf of the State. The Single Judge ought 
not to have entertained the application under Section 482 in 
respect of the same relief which had been given up earlier before 
E 
the Division Bench of the High Court on 29 June 2016. In terms 
of the view taken in the
present case, it is not necessary to address 
the question of law adverted to by the High Court. [Paras 12 and 
13) [902-F-H; 903-A-B) 
CRIMINAL APPELLATE ruRISDICTION : Criminal Appeal 
F 
No.1580of2017. 
· 
From the final Judgment and Order dated 18.08.2016 passed by 
the High Court of Judicature at Bombay, Nagpur Bench, Nagpur in 
Criminal Application (APL) No.459of2016. 
Ms. Deepa Kulkarni, Nishant Ramakantrao Katneshwarkar, Advs. 
G 
for the Appellant. 
Arjun Vinod Bobde, Ms. Richa Rahlan, Ms. Praneeta Sharma, 
Amarendra Kumar Singh, Anand Mishra, Advs. for the Respondent. 
H
898 
SUPREME COURT REPORTS 
[2017] 8 S.C.R. 
A 
The Judgment of the Court was delivered by 
DR. D.Y. CHANDRACHUD, J. 1. Leave granted. 
2. This appeal arises from a judgment of a Single Judge of the 
Bombay High Court at its Nagpur Bench dated 18 August 2016 by which 
a criminal application filed by the respondent has been allowed and a 
B direction for the de-freezing of his bank accounts has been issued. 
3. On 9 May 2014, a First Information Report was lodged against 
the Directors of a company by the name of Wasankar Wealth 
Management Ltd alleging that the complainant Vivek Pathak had been 
fraudulently induced to part with an amount of Rs 2. 74 crores by way of 
C an investment.On the basis of the information received, offences were 
registered under Sections 420, 406, 506 and 120 B of the Penal Code 
and Section 3 of the Maharashtra Protection of Interest of Depositors 
(In Financial Establishments) Act, 1999 (' MPID Act'). During the course 
of investigation, the respondent was arrested, together with other 
D accused. The bank accounts of the re~pondent were attached in exercise 
of powers conferred by Section I 02 of the Code of Criminal Procedure, 
1973. 
4. On 11 January 2016, the Special Judge, MPID Act allowed an 
application for bail submitted by the respondent. The respondent 
E submitted an undertaking before the Special Judge in the following terms: 
"Undertaking on behalf of Applicant 
1. The applicant seeks release on bail in crime no. 156/2014. The
applicant undertakes before this Hon'ble Court that out of an 
amount ofRs. 14,26,36,300/. The applicant has already deposited 
F 
, an amount of 2 crores. 
G 
H 
2. Out of the remaining amount of 12,26,36,300/- the applicant 
undertakes to deposit an amount of Rs. 1.5 crores before the 
151h day of each month starting from 15.2.2016. 
3. The applicant undertakes that the last instalment of 
1,76,36,00/- will be paid so as to cover the entire amount of 
Rs.14,26,36,300/-. 
4. The applicant also undertakes to pay the liability of interest till 
the entire amount is deposited in this court.
• 
STATE OF MAHARASHTRA v. AVINASH 
[DR. D.Y. CHANDRACHUD, J.] 
899 
5. The applicant undertakes that if possible and for which every A 
effort will be made, the applicant shall try to find a purchase for 
the attached properties so that the entfre amount is repaid even 
before early. 
6. The applicant undertakes that in any case if any default of the 
aforesaid undertaking is committed by the applicant the B 
prosecution shall be at liberty to forth with make an application 
to this court for cancelling the bail granted to the applicant. 
The applicant undertakes to abide by the present undertaking 
and also abide all such conditions which this Hon 'ble Court impose 
against the applicant which releasing him on bail." 
c 
Consequently and in terms of the undertaking filed by him, the 
respondent was released on bail in the following terms : 
"ApplicantAvinash s/o RameshjiBhute be released on bail on his 
executing P.R. Bond for Rs. 1,00,000/-which one solvent surety D 
in the like amount on following conditions: 
I. He shall deposit Rs. 1.2 crores before 15'h day of each month 
staring from 15.2.2016 as per his undertaking Exh.9. 
2. He shall deposit accumulated interest at the time of last 
instalment. 
E 
3. He shall attend Crime Branch, E.0.W., Nagpur on every 
Wednesday and Thursday for the purpose of interrogation in 
between 11.00 a.m. to 5.00 p.m. until orders and shall cooperate 
the investigating officer in investigation. 
Breach of any of the conditions shall
entail automatic cancellation 
of the bail and the applicant shall have to surrender before this 
Court." 
5. On 9 February 2016, the respondent applied for modification of 
F 
the conditions of bail imposed by the Special Judge in his order dated 11 
G 
January 2016. The respondent prayed that in lieu of the condition requiring 
him to deposit a sum of Rs 1.5 crores each month, he may be permitted 
to offer security of immovable property. The modification which he 
sought was in the following terms : 
H
900 
A 
B 
c 
SUPREME COURT REPORTS 
[2017] 8 S.C.R. 
"It is therefore, prayed that this Hon'ble Court be pleased to relax 
the condition directing the applicant to deposit Rs. 1.5 crores before 
the J Sth day of every month and if this Court finds. It is necessary, 
in lieu of payment of amount in cash, the applicant be permitted to 
offer his immovable property i.e. MIDC Leasehold Plot No. D-
12, D-13 & D-67 situated at Mouza Sonegaon (Seem), Nagpur 
MIDC, Hingana Road, Nagpur as a Secretary by making the same 
free from all encumbrances within a period of90 days by lifting 
restrictions imposed upon the applicant by this Court vide order 
dated 9.10.2015, passed in Misc. Criminal application No. 24721 
2015." 
6. The application for modification of the conditions of bail was 
numbered as Miscellaneous Criminal Application 350of2016. The Special 
Judge rejected the application for modification by an order dated I July 
2016. 
7. The respondent instituted Criminal Application 178 of 2016 
· D before the Nagpur bench of the Bombay High Court under Section 482 
of the Code of Criminal Procedure 1973 in which he sought the following 
reliefs: 
"a) quash the FIR No. 156/2014, registered by Ambazari Police 
Station under Sections 420, 409, 406, 506, 120-B ofIPC and 
E 
Section 3 of RBI Act and Section 24 ( 1) and 27 of SEBI Act 
pursuant to the report lodged by the non applicant no. 2 in so 
far as the applicant is concerned and to; 
b) quash the action of the non applicant no.
I of freezing the bank 
accounts of the applicant and defreeze the same and to; 
F 
c) direct the non applicant no. 1 not to take any further coercive 
steps against the applicant and to stay further proceedings 
against the applicant." 
Besides a prayer for quashing the FIR, the respondent specifically 
sought relief for de-freezing his bank accounts. On 29 June 2016 the 
G Criminal Application was withdrawn on the request of the respondent 
with liberty reserved him to apply for discharge in the event that the 
charge-sheet is filed. The order of the Division Bench reads thus: 
"Learned Senior Counsel appearing for the applicant seeks leave 
to withdraw the petition with liberty to apply for discharge in the 
H 
event the Charge-sheet is filed against the present applicant.
STATE OF MAHARASHTRA v. AVINASH 
[DR. D.Y. CHANDRACHUD, J.] 
901 
The Application is disposed of as withdrawn with liberty as prayed A 
· for." 
8. Criminal Application 459 of 2016 was lodged on 1 July 2016, 
soon after the earlier criminal application was dismissed as withdrawn, 
in order to assail the order of the Special Judge dated 1 July 2016, to 
allow the respondent to offer security of his immovable property in lieu B 
of a cash deposit and for de-freezing his bank accounts. The prayers 
sought before the High Court were as follows : 
"a) quash and set aside the order passed by the Special Court, 
Nagpur in Misc.Criminal Application No.350/2016 on 1/07/ 
2016, and be pleased to relax the condition imposed by the 
C 
Special Court, Nagpur directing the applicant to deposit Rs.1.5 
crores before the l 51h day of every month and to; 
b) In lieu of payment of amount in cash, applicant be permitted to 
offer his immovable property i.e. MIDC Leasehold Plot No.D-
12, D-13 and D-67 situated at Mouza Sonegaon (Seem}, D 
Nagpur MIDC, Hingana Road, Nagpur as a Security by 
making the same free from all encumbrances within a period 
of Three months by lifting restrictions imposed upon the 
applicant by the Special Court, Nagpur vide order dated 
09.10.2015, passed in MiscCriminalApplication No.2472/2015 
and to; 
c) defreeze all the bank accounts of the applicant and he be 
permitted to operate the same and to ; ... " 
E 
9. By a judgment dated 18 August 2016 the Single Judge of
the 
Bombay High Court allowed the Criminal Application and directed that 
F 
the restraint on the operation of the bank accounts of the respondent be 
lifted. The Single Judge held that the MPID Act stipulates a special 
procedure in Sections 4,5 and 7, different from the procedure contained 
in Section 102 of the Cr P C. In view of the overriding effect given to 
the MPID Act by Section 14, it has been held that the procedure envisaged 
G 
·in Section 102 of the Cr P C cannot be availed of. However, while 
allowing the application for de-freezing of accounts, liberty has been 
granted to the Investigating officer to follow the procedure prescribed in 
law for attaching the properties of the respondent. 
H
902 
SUPREME COURT REPORTS 
[2017] 8 S.C.R. 
A 
I 0. The principal submission which has been urged on behalf of 
the State is that there was a manifest abuse of the process by the 
respondent and that in consequence, he was disentitled to any relief. In 
particular, it was urged that the respondent had sought relief specifically 
for the de-freezing of accounts in the earlier criminal application. Once 
B such a prayer was not pressed when the application was withdrawn 
before the Division Bench, it was urged that it was manifestly an abuse 
of process to seek and obtain similar relief before a learned Single Judge 
of the High Court. 
11. On the other hand, learned counsel appearing on behalf of the 
C respondent attempted to support the order passed by the Single Judge 
by submitting that the bank accounts could not have been frozen by 
taking recourse to the provisions of the CrPCin view of the special 
provisions contained in the MPID Act. 
12. The MPID Act is intended to secure the interests of small 
depositors. The respondent initially filed an undertaking before the Special 
D Judge toset out the manner in which he would secure an amount of 
Rs 14,26,36,300/-.Besides an amount of Rs.2 crores which he had 
deposited, therespondent undertookto deposit an amount of Rs l .5 crores 
every month commencing from 15 February 2016. He was released on 
bail by the Special Judge on 11January2016 by requiring him to deposit 
E an amount of Rs 1.5 crores each month, commencing
from 15 February 
2016. The respondent applied for modification of the condition of deposit 
in Miscellaneous Criminal Application No 350 of 2016 which was 
dismissed on I July 2016. The High Court was then moved in an 
application (Criminal Application No 178 of20 l 6)under Section 482 of 
the Cr P C, with a specific prayer for de-freezing his bank accounts. 
F This prayer, together with the other reliefs (including that for quashing 
the FIR) was not pressed and the application was disposed of as 
withdtawn on 29 June 2016 by the Division Bench. In this background, 
the filing of another application before the learned single Judge on 1 July 
2016 for quashing the FIR and for de-freezing the bank accounts 
G constituted a manifest abuse of process. The learned Single Judge was 
evidently not apprised of the fact that the earlier application seeking 
virtually the same relief had not been pressed before the division bench 
and had been withdrawn. Consequently, we find merit in the submission 
urged on behalf of the State of Maharashtra. The learned single Judge 
ought not to have entertained the application under Section 482 in respect 
H
STATE OF MAHARASHTRA v. AVINASH 
[DR. D.Y. CHANDRACHUD, J.] 
903 
of the same relief which had been given up earlier before the Division A 
Bench of the High Court on 29 June 2016. 
13. In the view which we have taken, it has not become necessary 
.to address the question oflaw adverted to by the High Court. We keep 
the question open. 
14. We accordingly allow the appeal and set aside the impugned B 
judgment and order of the learned Single Judge dated 18 August 2016. 
In consequence, criminal application 459 of2016 filed by the respondent 
before the Nagpur bench of the Bombay High Court shall stand dismissed. 
Divya Pandey 
Appeal allowed. 
c