2017 (9) TMI 1931 - SC - Indian Laws

Attachment of Bank accounts - fraudulent inducement to make investment - principal submission which has been urged on behalf of the State is that there was a manifest abuse of the process by the Respondent and that in consequence, he was disentitled to any relief - HELD THAT - The MPID Act is intended to secure the interests of small depositors. The Respondent initially filed an undertaking before the Special Judge to set out the manner in which he would secure an amount of ₹ 14,26,36,300/-. Besides an amount of ₹ 2 crores which he had deposited, the Respondent undertook to deposit an amount of ₹ 1.5 crores every month commencing from 15 February 2016. He was released on bail by the Special Judge on 11 January 2016 by requiring him to deposit an amount of ₹ 1.5 crores each month, commencing from 15 February 2016. The Respondent applied for modification of the condition of deposit in Miscellaneous Criminal Application No. 350 of 2016 which was dismissed on 1 July 2016. The High Court was then moved in an application (Criminal Application No. 178 of 2016) Under Section 482 of the Code of Criminal Procedure, with a specific prayer for de-freezing his bank accounts. This prayer, together with the other reliefs (including that for quashing the FIR) was not pressed and the application was disposed of as withdrawn on 29 June 2016 by the Division Bench. The learned Single Judge was evidently not apprised of the fact that the earlier application seeking virtually the same relief had not been pressed before the division bench and had been withdrawn - there are merit in the submission urged on behalf of the State of Maharashtra. The learned single Judge ought not to have entertained the application Under Section 482 - appeal allowed.

Summary

Issues:
1. De-freezing of bank accounts under MPID Act and Code of Criminal Procedure.
2. Abuse of process in seeking similar relief in different applications.

Analysis:
1. The appeal before the Supreme Court arose from a judgment of the Bombay High Court allowing a criminal application filed by the Respondent, directing the de-freezing of his bank accounts. The Respondent, arrested in a fraud case, had filed an undertaking for bail, including depositing specific amounts monthly. When he sought to modify the condition by offering immovable property as security, the Special Judge rejected it. Subsequently, the Respondent filed an application before the High Court seeking de-freezing of his bank accounts, which was allowed by the Single Judge, citing the MPID Act's special procedure overriding the Code of Criminal Procedure. The State argued abuse of process as the same relief was sought earlier and withdrawn before the Division Bench, making the subsequent application an abuse of process.

2. The Supreme Court found merit in the State's argument, ruling that the Respondent's filing of a new application for the same relief after withdrawing a similar one constituted an abuse of process. The Court noted that the Single Judge was not informed about the withdrawal of the previous application seeking the same relief. Consequently, the Court set aside the High Court's judgment, dismissing the criminal application filed by the Respondent. The Court did not delve into the legal question raised by the High Court, keeping it open for future consideration.