INDUR KARTAR CHHUGANI Vs. THE STATE OF MAHARASHTRA

JUDGEMENT

(1.) This Criminal Appeal (Appeal No. 951 of 2015) challenges the order passed by the designated Court dated 30th July, 2015 exercising powers under the Maharashtra Protection of Interests of Depositors (In Financial Establishments) Act, 1999 (for short the "MPID Act"). The impugned order is passed on a Miscellaneous Application and we would refer to the details thereof.

(2.) The Appellant before us is the original Noticee in MPID Case No. 12 of 2005, which has been filed by Respondent No. 1 State. That case has been filed against one Rajkumar Basantani under various sections of the MPID Act. It would be necessary to refer to that case in some details. One M/s. Soundcraft Industries Limited was granted financial assistance to the extent of Rs.1000 lacs. It was an assistance granted by the Punjab National Bank. M/s. Seema Investments Private Limited, owner of Flat No. 502, 5th floor, Pinky Panorama Co-operative Housing Society Ltd., 6th Road, Khar (West), Mumbai stood as guarantor to the loan extended to M/s. Soundcraft Industries Limited. M/s. Soundcraft Industries Limited was controlled by one Rajkumar Basantani along with his associates. This M/s. Soundcraft Industries Limited also obtained the loan/financial assistance from another bank, namely, Bharat Overseas Bank. In order to secure the financial assistance granted and rendered by these banks, M/s. Seema Investments Private Limited stood as colateral security. It created equitable mortgage in respect of another flat No. 501 situate on the same floor and of the same building. It is alleged these flats are having one entrance. They are joined from inside and treated as one residential unit. Appellant Indur Chhugani, his wife and his son claim to be in actual physical possession of these flats.

(3.) It is the case of the prosecution that Rajkumar Basantani failed to repay the amounts due and payable to these banks. Consequently, proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the "SARFAESI Act") were initiated. Under the said proceedings and reaching the satisfaction that the concerned persons failed to repay the loan, the mortgaged properties were directed to be seized. On 23rd June, 2004, symbolic possession of the flats was taken. Thereafter, under the directions of the Chief Metropolitan Magistrate, Mumbai, the Registrar of the said Court took possession of the flats under a panchanama and handed them over to the two banks. The said Rajkumar Basantani faced proceedings under the MPID Act and as per the provisions thereof, the designated Court passed an order of attachment of these flats. That order was passed on 19th January, 2005. The Investigating Officer attached these flats under the panchanama of 8th February, 2005. On 12th February, 2005, the concerned banks, at whose instance the flats were taken over by the order of the Chief Metropolitan Magistrate, Mumbai under the SARFAESI Act, were served with a copy of the attachment order passed by the MPID designated Court.