TaxTMI 
TaxTMI 
2026 (3) TMI 1573
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....] :- 1) Present Appeal filed under Section 11 of the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 (for short 'MPID Act') seeking to quash and set-aside the Order dated 8th January, 2014 passed by the learned Special Judge, City Civil Court, Gr. Bombay, allowing the MA/107/2013 filed under Section 9 of the MPID Act in C.R. No. 89/2013 registered with EOW, Unit-V Mumbai. 2) Heard Mr. Saxena, learned counsel for Appellant, Mr. Bhanushali, learned counsel for Respondent Nos. 1 to 3, Ms. Patil, learned Special PP appearing for Respondent No. 4, State, Mr. Lakhawat, learned counsel for Respondent No. 5, NSEL and Mr. Anil Yadav, learned counsel for Respondent No.6, ED. 3) Facts giving rise to this Appeal are that, a survey action under Section 133A of the Income Tax Act, 1961 (for short 'I.T. Act') was carried out by the Appellant-Deputy Director of Income Tax, New Delhi on the business premises of Respondent No. 1-M/s. Mohan India Pvt. Ltd and Respondent No.2-M/s. Tavishi Enterprises Pvt. Ltd. on 22nd August 2013. A search action under Section 132 of I.T. Act was carried out in the cases of Respondent Nos. 1, 3-Brinda Commodity Pvt. Lt....
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.... they prayed for the said reliefs. 3.3) Respondent No. 4 filed its reply in said MA/98/2013 and contended that, the Respondent No. 5 had accepted the deposits of Rs.5,660 Crores from 13,000 investors and cheated them. As a result, C.R. No. 89/2013 was registered by Respondent No. 4 under Sections 465, 467, 468, 471, 474, 477(a), 409 read with 120B of the Indian Penal Code (for short 'IPC') and Sections 3 and 4 of the MPID Act. About 25 member companies of NSEL had not repaid any amount to Respondent No. 5 and have misappropriated it. Respondent No. 1 was set up in 2010 and Respondent Nos. 2 and 3 were set up in 2013 to deal in real estate and commodity trading. These companies had received an amount of Rs. 929.40 Crores from Respondent No. 5. The said amount was not invested to purchase sugar but to purchase various properties in Delhi, Gurgaon and Haryana. Therefore, the said settlement was not legal. Accordingly, it had prayed for rejection of the Application. 3.4) Respondent No. 5 also filed its reply and has admitted that, it had entered into the Settlement Agreement dated 30th October, 2013. Thereunder, Respondent Nos. 1 to 3 had undertaken to pay Rs. 771 Crores within 1....
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....he amount of Rs. 59 Crores and credit that amount in the Escrow Account of the Respondent No. 5. Accordingly, the Order dated 2nd December 2013 in MA/98/2013 may be modified. 6) The Appellant contested the Application with its reply contending that, the seized bank deposits are worth Rs. 59.53 Crores. Said deposits have been seized under the provisions of the I.T. Act. The amount is required for recovering any liability likely to arise after completion of assessment under Section 153 A of I.T. Act, as provided by Section 132B of the I.T. Act. The seized cash was not in the name of any of the Respondent Nos. 1 to 3 but in the name of the following concerns/persons:- SRNo. Name of Holder of Bank Account Balance in bank account (Rs.) Seized (Rs.) 1. Worldwin Consultant India Pvt. Ltd., Axis Bank, D-81, Malviya Nagar, New Delhi 5,50,00,000/- 5,50,00,000/- 2. Sh. Jai Shankar Srivastava, Axis Bank, Deepali Enclave, Pitampura, Outer Ring Road, New Delhi 33,93,195/- 33,93,195/- 3. Sh. Jag Mohan, Axis Bank, D Mall, Rohini, New Delhi 16,29,985/- 16,29,985/- 4. Sh. Ram Awadh Sharma Axis Bank, Deepali Enclave, Pitampura, Outer Ring Road,....
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...., Respondent No. 1 was liable to pay Rs. 921.40 Crores to NSEL. That, provisional attachment Order was obtained against certain properties of Respondent Nos. 1 to 3 under Section 5 of PMLA Act. The PMLA Act being later in point of time and in view of Section 71 thereof, it has an overriding effect over all other enactments. Therefore, the Application was liable to be rejected. 8) After hearing the parties and considering the record, the learned Judge of the trial Court observed that Respondent No. 5 has not disputed that the subject matter 'money' belonged to the investors which Respondent Nos. 1 to 3 had received from Respondent No. 5. The statement of accounts filed by the Appellant also indicate the said fact. The MPID Act has received the assent of the President on 21 January 2000 and then it was published in the official gazette. The PMLA Act is later in point of time. In view of Articles 254 of the Constitution of India, Section 4 & 14 of the MPID Act and the decision in case of K.K. Baskaran v. State rep. by its Secretary, Tamil Nadu & Ors., reported in (2011) 3 SCC 793, the MPID Act has overriding effect on the other Acts. The provisions of Section 5 (3), 6 and 7 of the ....
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....No. 5. Pursuant to the settlement, Respondent No. 1 had acknowledged the liability of Rs. 921.40 Crores to Respondent No. 5 and undertaken to pay Rs. 771 Crores within 14 months from the settlement date 30th October, 2013. Therefore, the trial Court has held that the subject matter 'money' was received from the NSEL. This finding of the trial Court is not disputed by the Appellant. 13) As held in case of National Spot Exchange Ltd. v. Union of India reported in 2025 SCC OnLine 1137, merely because the SARFAESI Act and RDB Act which are enacted in respect of the subject matter falling in List-I and having been enacted by Parliament, they could not be permitted to override the MPID Act, which is validly enacted for the subject matter falling in List-II - State List. If such an interpretation is permitted to be made, it would amount to denuding the State of its legislative power to enact and enforce legislation, which is within the exclusive domain of the State and it would offend the very principle of Federal Structure set out in Article 246 of the Constitution of India, held to be a part of the basic structure of Constitution of India. 13.1) Therefore, we are in agreement with....