MPID Act| Any Property Attached & Vested In Competent Authority Is To Be Administered In Best Interest Of Depositors As Far As Practicable: Bombay HC
|The Bombay High Court in a matter has held that as per the provisions of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999, in short, MPID Act, any property attached and vested in the Competent Authority is to be administered as far as may be practicable in the best interest of the depositors.
A Division Bench comprising Justice Revati Mohite Dere and Justice Gauri Godse observed, “In view of the provision of Section 10 of the said MPID Act read with Rule 5 of the Rules of 1999, any property attached and vested in the Competent Authority is to be administered as far as may be practicable in the best interest of the depositors and the financial establishment as deemed fit by the Competent Authority.”
The Bench decided the said matter involving a batch of two appeals filed by Hotel Avion Private Ltd.
Senior Advocate Mihir Desai appeared for the appellant while APP P.P. Shinde and Advocates Subhash Jha with Advocate Dhrutiman Joshi and Meghna Gowalani appeared for the State and respondents.
Factual Background -
The batch of appeals was filed under Section 11 of the MPID Act for challenging the orders passed by the Special Judge of the MPID Court by which the Judge accepted respondent no.3 (M/s. Arya Lusters), as a successful bidder in the year 2018 in the auction proceedings for the sale of Hotel Jal property. The bid of the said respondent was accepted and the same was granted an extension for depositing the balance amount of the sale price.
By order, it was granted an extension of three weeks for making the payment of the balance amount of Rs. 19.25 crores and hence by way of the amendment, the appellant also challenged the said orders by way of an appeal before the court. As per the extensions granted, the last date to deposit the amount was December 3, 2018, but the entire balance amount was deposited by January 18, 2019.
The High Court in view of the above facts noted, “We have held that as per clause 13 of the terms and conditions of the auction notice, the Competent Authority had reserved all the rights to change or make addition to the terms and conditions. There is nothing argued before us that would show that there is any bar under the provisions of the said MPID Act or the said Rules of 1999, to grant an extension of time to deposit the amount towards the sale price.”
The Court held that condition no. 9 for depositing the balance amount towards the sale price within 60 days would stand modified in view of acceptance of the entire amount by the Competent Authority by exercising the right reserved as per clause 13.
“Even otherwise, the appellant has never offered any better price and admittedly, respondent no. 3 is the highest bidder”, also noted the Court.
The Court said that the Competent Authority and the MPID Court have rightly accepted respondent no. 3 as the successful bidder based on the highest price offered by it, and that it has also deposited the entire amount towards the sale price.
“… considering the purpose behind legislating the MPID Act, we find that the Competent Authority has, in its wisdom, acted in the best interest of the depositors. … We find that the learned Special Judge of the MPID Court has properly appreciated the facts and circumstances of the case and, keeping in mind the objects of the MPID Act, has passed appropriate Orders which are in the interest of the depositors”, held the Court.
The Court added that it is important to take into consideration that the amount towards the sale price has also generated a substantial amount towards interest, which can be utilised in the best interest of the depositors.
Accordingly, the High Court refused to interfere in the challenged orders and dismissed the appeals.
Cause Title- Hotel Avion Private Ltd. v. State of Maharashtra & Ors. (Neutral Citation: 2023:BHC-AS:19474-DB)