The Bombay High Court dismissed a criminal appeal challenging the Special MPID Court’s order refusing release of an attached property in connection with the NSEL-MPID case. The Court held that once auction of attached property is permitted, the MPID Act does not provide for release of such property back to the owner merely because the auction remained unsuccessful.
Court’s Decision
The Division Bench of the Bombay High Court upheld the order of the Special Judge under the MPID Act and dismissed the appeal.
The Court observed:
“It is also not in dispute that the MPID Act has no provision regarding release of property in favour of the owner, after an order is passed permitting auction.”
The Court further held that there was no reason to permit the appellant to secure or reclaim the property merely because it remained unsold despite being put up for auction three times.
Facts
The appellant was arraigned as an accused in the NSEL case arising out of C.R. No. 89 of 2013. The case involved offences under the Indian Penal Code and later also included Sections 3 and 4 of the MPID Act.
During investigation, several properties were attached under the MPID Act and PMLA. The appellant claimed that he had deposited ₹29 lakhs with the competent authority pursuant to an oral proposal made during bail proceedings, without admitting liability.
The appellant further contended that despite this deposit and repeated emails, the goods/property were not released. He therefore sought release of the attached property.
Appellant’s Arguments
The appellant argued that:
- He had deposited ₹29 lakhs with the competent authority.
- The property had been put up for auction three times.
- The reserve price was shown as ₹48 lakhs.
- Despite repeated auctions, no buyer came forward.
- He was willing to deposit the differential amount for release of the property.
- The Special MPID Court wrongly rejected his application.
Respondent’s Arguments
The respondent opposed the appeal and argued that the valuation relied upon by the appellant was incorrect.
It was submitted that the ₹48 lakh valuation was based on the property being treated as agricultural land. However, another valuation report treated the land as commercial and valued it at ₹12,55,56,352.
Therefore, according to the respondent, the appellant could not seek release of the property by securing only ₹48 lakhs.
Court’s Reasoning
The High Court accepted the respondent’s submissions and found no merit in the appellant’s case.
The Court held that:
“We find no reason to permit the Appellant to bid for the said property merely because the said property remained unsold though put up for auction for three times.”
The Court also found no reason to disbelieve the valuation report which valued the property at ₹12.55 crore.
The Court concluded that the Special MPID Court was right in rejecting the application, especially when the appellant sought release of property by securing only ₹48 lakhs while the other valuation report assessed the value at over ₹12.55 crore.
Conclusion
The Bombay High Court dismissed the appeal and upheld the Special MPID Court’s order. The Court made it clear that once auction of attached property is permitted under the MPID proceedings, the owner cannot seek release of the property merely because the auction did not attract buyers.