Mumbai: In a significant ruling, the Bombay High Court recently said there is no solution for innocent and unsecured depositors to get their money back, once they are defrauded. The HC accordingly held it as the duty of the government to assist such innocent depositors and to protect their interests by taking steps to recover the amount and return it to those who have lost their savings.
The observations were made while dealing with a bunch of petitions filed by accused in a Rs 1,100 crore fraud committed by a bogus credit society.
A bench of Justices Ranjit More and Bharati Dangre was seized with the petitions filed by employees of the Bhaichand Hirachand Raisoni Multi State Credit Society, which floated Ponzi schemes and duped hundreds of persons from Gujarat, Maharashtra and Madhya Pradesh.
The employees and the society were booked in 77 different cases and thus they petitioned the bench, urging the judges to appoint one special court to hear all the 77 cases against them. All the accused have been booked under relevant provisions of the Indian Penal Code (IPC) and the Maharashtra Protection of Interests of Depositors (MPID).
While allowing the plea, the judges referred to the special law — MPID, which primarily deals with bank fraud cases in which investors are duped. In such a reference, the bench said, “The MPID is a special enactment to ameliorate the interest of the depositors and it is enacted to deal with such financial establishments in the state,
who are grabbing money received as deposits from public, mostly from the middle-class and poor strata of the society, on the promise of unprecedented high, attractive interest on maturity and such financial establishments have defaulted and it has caused great public resentment and uproar, creating law and order problem in the state.”
The bench further said, the MPID law intends to help nail such offences committed by a unique class of white-collar, organized criminals. The judges noted, the procedure contemplated under MPID intends to prevent loss for depositors and enable them to recover the amount as early as possible.
“No solution is available to the innocent unsecured depositors in absence of the procedure prescribed in the enactment. In our considered opinion, it is also the duty of the state to assist the innocent depositors and to protect their interests and effectively take steps to recover the amount and return the same to the persons who have lost their savings,” the bench observed.
“The state being the custodian of the welfare of the subjects, cannot be a silent spectator, and once a legislation has been brought in to deal with this malady and protect the interest of the vulnerable sector, it is the duty of the state to render justice to such depositors and this would be in the real sense, amounting to securing of socio-economic justice to its citizens, which is the solemn duty of every state,” the judges held.
