Nimish And Ors vs State Of Maharashtra

Heard finally at the stage of admission Shri R.R. Vyas, learned counsel for the appellants and Mrs. M.H. Deshmukh, learned Assistant

Government Pleader for the respondent.

This Appeal Against Order impugns the order dated 03.10.2019 passed by the Court of District Judge â€" 12, Nagpur, whereby delay of 25 days

was condoned for filing an application under Section 5(3) of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act,

1999, (hereinafter referred to as M.P.I.D. Act).

The appellants are respondents before the Designated Court, Nagpur, under M.P.I.D. Act. It is stated that a criminal case was registered against

the appellants for the commission of offence punishable under Sections 406, 409, 420 read with Section 34 of the Indian Penal Code; under the

provisions of M.P.I.D. Act; Section 34 of the Maharashtra Prevention of Money Lending Act and under Section 45 of the Reserve Bank Act.

It is stated that during the course of investigation, properties of the appellants were seized. After investigation, a charge sheet came to be filed

against the appellants and criminal case is pending before the Criminal Court at Nagpur.

It is further stated that the respondent herein filed a Miscellaneous Civil Application No. 153 of 2019 seeking condonation of delay in filing an

application under Section 5(3) of the M.P.I.D. Act, before the Designated Court, Nagpur. The learned Designated Court allowed the same by placing

reliance on the judgment of the Madras High Court in the case of N. Vanjimuthu vs. Competent Authority and Commissioner of Land Administrator,

C.M.A. (MD) No. 807 of 2014 and M.P. (MD) Nos. 1 & 3 of 2014 delivered on 15.12.2015.

Shri Vyas, learned counsel for the appellants submitted that the M.P.I.D. Act, being a special statute having overriding effect, the provisions of the

Limitation Act, 1963, would not be applicable. In support of his submissions, the learned counsel placed reliance on the judgment of the Hon’ble

Apex Court in the case of Fairgrowth Investments Ltd. vs. Custodian, reported at (2004) 11 SCC 472.

Mrs. M.H. Deshmukh, learned Assistant Government Pleader, appearing on behalf of the respondent â€" State, on the contrary, supported the

impugned order of the Designated Court.

I have considered the submissions advanced on behalf of both the parties. The following point arose for determination:

“Whether Section 5 of the Limitation Act, 1963, is applicable to the application under Section 5(3) of the M.P.I.D. Act ?â€​

At the outset, there is no bar either express or by necessary implication with regard to applicability of provisions of Limitation Act, in the M.P.I.D.

Act. Section 5(3) of the M.P.I.D. Act, mandates the competent authority to apply to the Designated Court within 30 days from the date of publication

of the order of attachment of properties specifying on affidavit the details with regard to grounds on which the Government has issued the said order

under Section 4 and the amount of money or other property believed to have been acquired out of the deposits and the details, if any, of persons in

whose name such property is believed to have been invested or acquired or any other property attached under section 4, for such further orders as

found necessary.

The main purpose for enactment of M.P.I.D. Act was to protect the interest of the depositors in financial establishments, which fraudulently

default repayment of deposits on maturity as per the promise made.

Section 4 of the M.P.I.D. Act empowers the Government on its satisfaction that the financial establishment has failed to return the deposit after

maturity or on demand and in order to protect the interests of depositors, to issue an order by publishing it in the official gazette, attaching the money

or other property believed to have been acquired by such financial establishment.

Section 5(1) of the M.P.I.D. Act further empowers the Government to appoint competent authority to exercise control over the monies and the

properties attached by the Government under Section 4, of a Financial Establishment. Section 5(3) of the M.P.I.D. Act, empowers the competent

authority to apply to the Designated Court, within 30 days from the date of publication of the aforesaid order, for such further orders as found

necessary.

In the instant case, an application under Section 5(3) of the M.P.I.D. Act for making the attachment absolute of the property notified in the

notification came to be filed before the Designated Court, however beyond 25 days of the period of 30 days as prescribed under the Act, stating the

reasons for delay therein.

Shri Vyas, learned counsel, emphasized on Section 14 of the M.P.I.D. Act, which provides for overriding effect of the provisions of this Act. For

ready reference, Section 14 of the M.P.I.D. Act is reproduced below:

“Save as otherwise provided in this Act, the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in

any other law for the time being in force or any custom or usage or any instrument having effect by virtue of any such law.â€​

While Section 29(2) of the Limitation Act, 1963, provides that where any special or local law prescribes for any suit, appeal or application a period

of limitation different from the period prescribed by the Schedule, the provisions of section 3 shall apply as if such period were the period prescribed

by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law,

the provisions contained in sections 4 to 24 (inclusive) shall apply only insofar as, and to the extent to which, they are not expressly excluded by such

special or local law.

As per Section 29(2) of the Limitation Act, 1963, the following twin conditions must be satisfied for applicability of the section which have been

clearly exhibited by the Hon’ble Apex Court in the case of Mukri Gopalan vs. Chappilat Puthanpurayil Aboobacker, reported at AIR 1995 SC

2272 :

(i) There must be a provision for period of limitation under any special or legal law in connection with any suit, appeal or application;

(ii) The said prescription of period of limitation under such special or local law should be different from the period prescribed by the Schedule to the

Limitation Act.

In Mukri Gopalan vs. Chappilet Puthanpurayil Aboobacker, (supra), the Hon’ble Apex Court held that if the twin requirements are satisfied,

the consequence contemplated by Section 29(2), automatically follows.

In the instant case, for filing an application under Section 5(3) of the M.P.I.D. Act, the prescribed period of limitation is 30 days, which is

apparently different from the period of limitation of three years provided under Article 137 of the Limitation Act, 1963, for filing any other application

for which no period of limitation is provided in the Schedule. Therefore, the twin conditions are satisfied.

With regard to overriding effect of the M.P.I.D. Act, as argued by Shri Vyas, learned counsel for the appellant, there is no provision at all in the

M.P.I.D. Act, empowering the Designated Court to condone delay and, therefore, in the absence of any provision, there is no question of prevailing

provisions of M.P.I.D. Act on the count of being inconsistent. Similarly, there is no bar in the said Act either express or by necessary implication

indicating exclusion of the applicability of Sections 4 to 24 (inclusive) of Limitation Act. Therefore, in my view, these provisions would apply in

determining the prescribed period of limitation. The ‘Prescribed period’ of limitation as per definition in the Limitation Act, means the period of

limitation computed in accordance with the provisions of this Act.

The Madras High Court in the similar facts and situations, in the case of N. Vanjimuthu vs. Competent Authority and Commissioner of Land

Administrator, (supra) took a view that the provisions of Sections 4 to 24 of the Limitation Act are applicable to Section 4(3) and Section 4(4) of the

Tamil Nadu Protection of Interests of Depositors (In Financial Establishments) Act, 1997 (hereinafter referred to as TNPID Act).

The provisions of Section 4(3) and Section 4(4) of the TNPID Act are pari materia with Section 5(3) of the M.P.I.D. Act.

The judgment in the case of Fairgrowth Investments Ltd. vs. Custodian, (supra), relied on by Shri Vyas, learned counsel, the Hon’ble Apex

Court held that Section 4(2) of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 (hereinafter referred to as Act of

1992) prescribing a time limit for filing objection is mandatory and not extendable by Special Court in any inherent jurisdiction of that Court. It is

further held that since power to condone delay is already provided under Section 10(3) of the Act of 1992, the Legislature has consciously excluded

the provisions of the Limitation Act.

With due respect, the aforesaid authority in the case of Fairgrowth Investments Ltd. vs. Custodian, (supra), would not be applicable to the question

arose for determination in this case as there is no provision under the M.P.I.D. Act unlike Section 10(3) of the Act of 1992. No doubt in M.P.I.D.

Act, Section 11 provides a period of Limitation of 60 days in filing appeal, however, there is no provision for empowering the Designated Court to

condone delay unlike Section 10(3) of the Act of 1992.

The Full Bench of this Court in the case of Commissioner of Income-Tax vs. Velingkar Brothers, reported at 2007 (3) Mh. L.J. 241, while

considering the question - “Whether Section 5 of the Limitation Act, 1963, shall apply in case of appeals filed under Section 260-A of the Income

Tax Act, 1961 ?†held that the Legislature used the words ‘shall be filed’ in sub-section (2) means that the limitation for filing the appeal is as

provided therein but that does not make section 29(2) of the Limitation, 1963, inapplicable, unless there is clear indication of its exclusion by

implication.

The Full Bench further held that the use of the word ‘shall’ and the longer period of limitation (120 days) are not indicators of such

exclusion. Nor from the position that Section 260-A of the Income-Tax Act, is silent about applicability of Section 29(2), any justifiable inference can

be drawn for inapplicability of that provision. It is further held that what is obvious need not be stated and, therefore, legislature may have thought fit

that it was not necessary to express specifically about the power of the High Court to condone the delay in view of existence of Section 29(2) of the

Limitation Act. When the statute is silent, the presumption is not drawn automatically about the exclusion of Section 29(2) or for that matter, Section 5

of the Limitation Act.

In the absence of any bar express or by necessary implication for applicability of provision of Section 5 of the Limitation Act, Section 5 of the

Limitation Act would be applicable for filing application under Section 5(3) of the M.P.I.D. Act.

For the reasons aforesaid, Appeal Against Order is devoid of any merit and needs to be dismissed and the same is disposed of accordingly. No

order as to costs.