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2019 (9) TMI 828 - HC - Indian LawsScope of Deposit for the purpose of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 - Whether the definition of ‘deposit’ under section 2(c) of the MPID Act covers in its fold ‘intercorporate deposits’ and can the MPID Act be said to have been enacted to protect the interest of the corporate depositors as well? HELD THAT:- The MPID Act and the enactments passed by the other State Legislatures were with the avowed object of protecting the interest of the depositors. The Legislatures had noticed a pattern of collecting money or deposits from unsuspecting investors after painting a rosy picture of return. The Legislature, thus, provided a special mechanism of attachment of properties and unearthing the money which was swindled so as to ensure that the investors are not left in the lurch by such unscrupulous persons and financial establishments. The legislative prescription, needs to be carefully appreciated in the backdrop of the object of the MPID Act. Indubitably, the MPID Act does not make a distinction between the corporate and ordinary deposit. In fact, the MPID Act only defines ‘deposit’. It does not define ‘depositor’. Albiet, section 4 of the Act provides for issuance of an order of attachment of the properties on default in return of deposits upon complaints received from the depositors or otherwise. The constitutional validity of the MPID Act has been upheld, including the legislative competence of the State legislature to enact MPID Act. We are also conscious of the fact that it is neither permissible, nor do we propose, to delve into the said aspect of the matter. Thus, the intercorporate deposit/loan, i.e., a loan advanced / deposit made by a company with another company registered under the provisions of the Companies Act would not amount to a “deposit“ within the meaning and for the purpose of the MPID Act. It is hereby declared that the intercorporate deposit/loan, i.e., a loan advanced/deposit made by a company with another company registered under the provisions of the Companies Act, 1956/2013 would not amount to a “deposit” within the meaning and for the purpose of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 - petition allowed.
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