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TMI Blog2024 (6) TMI 487X X X X Extracts X X X X X X X X Extracts X X X X ..... PPLN/1418/2024 : Mr. N.B. Narwade, Advocate. JUDGMENT (PER : MANGESH S. PATIL, J.) : Heard. Rule in all these matters. Rule is made returnable forthwith. 2. This is a writ petition filed under Article 226 of the Constitution of India read with Section 482 of the Code of Criminal Procedure seeking quashment of Crime No. 121/2022 registered with Kotwali Police Station, Ahmednagar and subsequently transferred to the Economic Offences Wing, Ahmednagar, for the offences punishable under Section 409, 420, 467, 468, 471 read with Section 34 of the Indian Penal Code and also under Section 3 of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 (herein after the MPID Act). 3. The substance of the allegations as can be deduced are to the effect that respondent No. 2 is a Cooperative Bank registered under the Maharashtra Cooperative Societies Act, 1960 (herein after the Cooperative Societies Act). The Reserved Bank of India (RBI) issued licence to it for banking business by order dated 10.12.1986. The petitioner was elected as a Director on the Board of Directors for the tenure from November 2014 to November 2019. The RBI appointed an administr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng up any challenge to the offences being invoked against him under the Indian Penal Code under different sections. He submits that he is merely putting up a challenge to the petitioner's prosecution under the provisions of the MPID Act. 10. He would submit that the object for which MPID Act was brought into the statute book was to monitor functioning of the Financial Establishments in the State and to protect the interest of the depositors who are assured of attractive interest but fail to keep the promise resulting in public resentment since they are duped by the unscrupulous activities. 11. He would submit that Section 3 of the MPID Act makes any fraudulent default in repayment of deposit by a financial establishment a crime. Section 2(d) defines "Financial Establishment" and though it expressly excludes a co-operative society owned or controlled by any State or Central Government, his emphasis is on the fact that even this definition of "Financial Establishment" expressly excludes a "Banking Company" as defined under Clause (c) of Section 5 of the Banking Regulation Act, 1949 (the BR Act). He would submit that though respondent No.2 - bank is neither owned and controlled by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the co-operative banks registered under the Co-operative Societies Act. 13. Mr. Thorat would refer to and rely upon the decision in the matter of Pandurang Ganpati Chaugule Vs. Vishwasrao Patil Murgud Sahakari Bank Ltd.; (2020) 9 SCC 215 and particularly the conclusion drawn therein based on the interpretation of the provisions of the BR Act and the amendment effected therein in Section 56(a) which came into being on 01.03.1966. He would precisely advert our attention to the paragraph No.103 of the judgment, wherein, it has been observed that as a consequence of inclusion of Section 56(a) in the BR Act with effect from 01.03.1966, the category of banking companies as defined under Section 5(c) of the BR Act would encompass co-operative banks registered under the State Co-operative Laws and Multi-State Cooperative Banks registered under the Multi-State Co-operative Societies Act, 2002. 14. Per contra, the learned APP, the learned advocate for respondent No.2, the learned advocate for respondent No.3 and that of the intervenors would submit that the very stand of the petitioner that any co-operative bank registered under the Co-operative Societies Act would stand excluded from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ablishments. Section 3 of the MPID Act inter alia provides for punishment for any financial misdeeds as contemplated therein. It uses the word "Financial Establishments" which has been defined under Section 2(d) of the MPID Act and reads thus : "Section 2 (d) : "Financial Establishment" means any person accepting deposit under any scheme or arrangement or in any other manner but does not include a corporation or a cooperative society owned or controlled by any State Government or the Central Government or a banking company as defined under clause (c) of section 5 of the Banking Regulation Act, 1949." 20. As can be seen, the State Legislature in its wisdom has excluded the Co-operative Societies owned and controlled by the State Government, it also excludes the 'banking companies' as defined under Section 5(c) of the BR Act. 21. At the first blush, the erudite submission of the learned advocate Mr. Thorat relying upon Pandurang Ganpati Chaugule (supra) is indeed attractive. However, it overlooks the fact that Pandurang Ganpati Chaugule (supra) is a matter, wherein, the Supreme Court was called upon to decide as to if the provisions of the Securitisation and Reconstruction of Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be understood in the backdrop of these factors, which in our considered view are important. 24. Conversely, merely because a co-operative bank to which the provisions of the BR Act are applicable by virtue of insertion of Section 56(a) with effect from 01.03.1966 or by virtue of amendment coming into effect from 01.04.2021 thereby transforming into a non-obstante clause, cannot be said to have been excluded by implication from the ambit of the MPID Act, in view of the definition of 'Financial Establishment' contained in Section 2(d) of the MPID Act. 25. True it is that any co-operative bank registered under the Central or State legislature to which provisions of BR Act are applicable, would be under supervision of the RBI. However, one cannot lose site of the fact that the BR Act merely seeks to have a control over the functioning of all the banking companies or the co-operative banks, however, it does not contain any specific provision defining any act or provide for any punishment for the offences which are punishable under Section 409, 420, 467, 468 and 471 read with Section 34 of the Indian Penal Code. Only some acts have been made punishable by making the offences cognizable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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