https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=760858 https://www.taxtmi.com/caselaws?id=760858 Attachment of the properties on default of return of deposits - Prayer for quashing and setting aside the auction process in respect of sale of the subject property - challenge to auction in which the Petitioner itself is declared as successful auction purchaser - alleged suppression of material facts in contravention of section 55 (1) (a) of the Transfer Of Property Act, 1882 - HELD THAT:- The attachment of the properties on default of return of deposits u/s. 4 of the MPID Act starts with a non-obstante clause and it provides that when the Government is satisfied that any Financial Establishment has failed to return the deposit after maturity or on demand by the depositor, or to pay interest or other assured benefit, or to provide the service promised against such deposit, or where the Government has reason to believe that any Financial Establishment is acting in a calculated manner detrimental to the interest of the depositors with an intention to defraud them and if the Government is further satisfied that such financial Establishment is not likely to return the deposits or pay the interest or other benefits assured, the Government may in order to protect the interest of the depositors, issue an order in the Official Gazette attaching the money or other property believed to have been acquired by such Financial Establishment either in its own name or in the name of any other person from out of the deposits collected by such Financial Establishment. In the present case, Respondent No. 3 is duly constituted Competent Authority and it has exercised power u/s. 5(3) by applying to the designated Court and subject property was attached. The Designated Court u/s. 6 of the MPID Act has passed an order after investigation, to release the subject property from attachment u/s. 7(6) of the MPID Act - It is therefore clear that the subject property was first vested in the Competent Authority by operation of law and thereafter sold through the auction under process of law and the attachment of ED has been lifted by the Designated Court u/s. 7(6) of the MPID Act. It is therefore clear that the enforcement of right of the secured creditor flows from an agreement / instrument / document and secured asset means property on which security interest is created. Security interest means right, title or interest of any kind upon the property created in favour of the secured creditor including mortgage, charge, hypothecation, assignment or any right, title or interest of any kind on tangible asset retained by the secured creditor etc. The very basis of the Petitioner s case seeking refund of the purchase price paid, is that the subject property cannot be utilized by the Petitioner. This argument is based on the alleged non-availability of the title deeds. Once the subject property vested in the Competent Authority and is sold to the Petitioner under due process of law and once the attachment of ED is lifted by the order of designated MPID Court, nothing more is required, for the Petitioner to enjoy the subject property. Having held that the Petitioner is not entitled to refund of the principal amount (purchase price paid), it is not necessary to labour any further about grant of interest as claimed by the Petitioner or otherwise. For the same reason, even the Petitioner s prayer for damages / compensation is only stated to be rejected. There are no merits in the Petition and the same is accordingly dismissed. Case-Laws Indian Laws Fri, 25 Oct 2024 00:00:00 +0530