Bombay High Court
National Spot Exchange Limited vs State Of Maharashtra on 7 October, 2024
Author: Nitin W. Sambre
Bench: Nitin W. Sambre
2024:BHC-AS:40265-DB
(11)Apeal-1095-2023.doc
rajshree
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.1095 OF 2023
M/s.N.K. Proteins Pvt. Ltd. ]
(Formerly known as NK Proteins Ltd.) .. Appellant
vs.
State of Maharashtra & Anr. ] .. Respondents
ALONGWITH
CRIMINAL APPEAL NO.1217 OF 2023
National Spot Exchange Limited ] .. Appellant
vs.
State of Maharashtra ] .. Respondent
Mr.Subodh Desai, Senior Advocate i/b Amit Ghag for the Appellant in
Cr. Appeal No.1095/2023.
Mr.Arvind Lakhawat a/w Nimeet Sharma, Jalpa Shah and Hirani
Narula i/b MZM Legal LLP for the Appellant in Cr. Appeal
No.1217/2023.
Ms.Rebecca Gonsalvez, SPP a/w J.P. Yagnik, APP for the State.
CORAM : NITIN W. SAMBRE &
MANJUSHA DESHPANDE, JJ
DATE : 7th OCTOBER, 2024.
COMMON JUDGMENT (PER NITIN W. SAMBRE, J) :
1 Heard the learned senior counsel Mr. Subodh Desai and the
learned counsel Mr.Arvind Lakhawat, representing the respective
RAJSHREE KISHOR MORE
KISHOR Date:
MORE 2024.10.11
10:17:13
Appellants in both the Appeals.
+0530
(11)Apeal-1095-2023.doc
2 According to us, since the issue involved in both the Appeals is
common, we have decided both the Appeals by this common order.
3 For the convenience, the facts in Criminal Appeal No.1095/2023
are considered, for deciding the issue sought to be canvassed.
4 Criminal Appeal No.1095/2023 under Section 11 of the
Maharashtra Protection of Interest of Depositors (in Financial
Establishments) Act, 1999, (for short "MPID Act"), is preferred to
challenge the order dated 11.08.2023, passed by the designated Court
below Exh.63, and Criminal Appeal No.1217/2023 is preferred to
challenge order below Exh.34 (in Criminal Appeal No.1217/2023),
whereby Applications moved by the Respondent/State, seeking
permission to examine the Forensic Auditor, came to be allowed.
5 The facts necessary for deciding the present AppealS are
as under :
a) The National Spot Exchange Ltd. having defaulted in
repayment to Investors and Depositors, came to be added as accused
in CR No.216/2013 for the offence punishable under Section 3 and 4 of
the MPID Act and under Sections 409, 465, 467, 468, 471, 474, 477A
and 120B of the IPC. Vide Notification dated 02.01.2019 issued under
Section 4 and 5 of the MPID Act, certain properties were attached.
b) Upon investigation in the aforesaid crime, the accused
persons are facing trial in MPID Case No.1 of 2014, arising out of the
aforesaid CR No.216/2013.
c) In the said trial, Miscellaneous Application No.182/2019
came to be moved by the State of Maharashtra through the Competent
Authority, which was marked as Exh.63, wherein prayer made for
(11)Apeal-1095-2023.doc
attachment of the properties was made absolute under Section 7 of the
MPID Act, with further permission to the State through Competent
Authority to proceed with the sale of the properties.
d) An Affidavit in support of the prayer in the aforesaid
proceedings was also submitted by the Competent Authority.
e) The Appellant herein, recorded an objection under Sub-
Section 3 of Section 7 of the MPID Act to the prayer moved in the
aforesaid Application, with a prayer for rejection of the same.
f) In the said proceedings, the Application (Exh.63) came to
be moved in M.A.No.182/2019, which reads thus :
"The Prosecution most respectfully submits that in the above
matter prosecution had filed a closing pursis stating that it does not want
to lead evidence. The prosecution at Exh. 59 had filed an Application for
taking forensic Audit report on record and be read in evidence. However
on 17/2/2023 the matter was slated for taking steps by the Prosecution.
Whereas on 17/2/23 the objectors and Respondents objected the
forensic Audit report to be read in evidence and disputed the same.
Hence prosecution now intends to examine the forensic Auditor in
support of its case in order to prove the Forensic Audit.
Great prejudice will be caused to the case of the prosecution if
the said application is not allowed. Moreover no prejudice will be
caused to the objectors and Respondents as they will be having the
right to cross-examine the forensic Auditor.
It is therefore prayed that said application may please be
allowed in the interest justice."
g) Vide said Application, it is urged that the prosecution has
closed its evidence vide closure pursis, however, an Application Exh.59
came to be moved for taking Forensic Audit Report on record, with
permission to read the same in the evidence. Since the present
Appellant has objected the Forensic Audit report to be read in
(11)Apeal-1095-2023.doc
evidence, the Prosecution has prayed for grant of permission to
examine the Forensic Auditor in support of its case so as to facilitate
proving of Forensic Audit Report.
h) The said Application was duly objected on the ground that
the same was moved by way of an afterthought, so as to fill in the
lacunas as the Forensic Audit Report was very much available and
within the knowledge of the Prosecution since long.
i) Vide the impugned order dated 11.08.2023, the said
Application came to be allowed by the designated Court thereby
permitting the issue to be framed to that effect and also permission is
granted to Respondent to adduce evidence of Auditor to prove
Forensic Audit Report. Consequential permission is granted to the
Appellant to lead further evidence if so required.
6 The learned senior counsel Mr. Subodh Desai, while questioning
the same would urge that the impugned order is not sustainable
particularly when the Respondent/State has closed its evidence and
placed closure pursis. According to him, since long the Forensic Audit
Report dated 22.12.2018 was in possession of the Respondent-
Prosecution. In absence of explanation whatsoever coming forth from
the Respondent/State for belated production and prayer for
examination of witness in support thereof, the designated Court
committed an error in granting the prayer. He would claim that the
order impugned not only goes contrary to the Scheme of Order XXXVII
of CPC which is required to be added, pursuant to provisions of Sub
Section 5 of Section 7 of the MPID Act, but also in contravention to the
provisions of Order XVIII Rule 1 of the CPC.
7 According to the learned counsel for the Appellant, the State, if
(11)Apeal-1095-2023.doc
permitted to continue to adduce the evidence as permitted vide the
impugned order, same is likely to cause substantial prejudice to the
Appellant as the Respondent/State will be permitted to fill the lacunae
that too, at the cost and consequences of the present Appellant. That
being so, it is claimed that the impugned order is liable to be quashed
and set aside.
8 As against above, the learned SPP Ms.Rebecca Gonsalvez
would urge that the order impugned is in tune with not only the
provisions of Code of Civil Procedure and the Indian Evidence Act, but
also much warranted to achieve the object which is sought to be
achieved by the provisions of the MPID Act. It is claimed that the
Respondent/State is duty bound to protect the interest of Depositors.
In such an eventuality, the Forensic Audit Report is a necessary
document to be placed on record, in view of the stand of the Appellant
objecting the said document. It is claimed by the learned SPP that the
said issue goes to the root of the matter and as such in the interest of
justice, the Court below was justified in allowing the Application.
9 We have considered the rival submissions.
10 The fact remains that the main proceedings are in relation to the
prayer of the Respondent No.1 in the matter of confirmation of
attachment and permission to sale the properties of the Appellant,
which was attached in the aforesaid crime. Such step on the part of the
Respondent is objected by the Appellant.
11 So as to establish that the property attached of which permission
is sought from the designated Court to be sold so as to achieve the
(11)Apeal-1095-2023.doc
main object and purpose of the MPID Act, thereby addressing the
grievance of the depositors, it is necessary for the Respondent No.1
to demonstrate that the property was purchased out of the tainted
money by the Appellant.. The said issue rightly so claimed by the
Respondent/State goes to the root of the matter. The fact remains that
pursuant to the provisions of Sub-Section (5) of Section 7 of the MPID
Act, the provisions of Order XXXVII applicable to the Summary Suits,
are applied to the present proceedings.
12 In such an eventuality, having regard to the stand taken by the
Appellant of disputing the Forensic Audit Report, in our opinion,
Respondent No.1 was justified in moving an Application Exh.63 for
proving the Audit Report by examining the Auditor. The said step on
the part of the Respondent is necessary to adjudicate the issue to be
decided and also in the interest of justice the said document is
required to be proved so as to achieve the very object of the statute viz
safeguard the statutory interest of the depositors.
13 The learned designated Court was sensitive to the provisions of
Order XVIII and Order XXXVII of the CPC. The designated Court has
struck a balance while allowing the prayer of the State thereby
permitting the Appellant to lead further evidence if so desired, after the
evidence of the Auditor is concluded. The designated Court, was
sensitive to the fact that the proceedings meant for Summary Suits are
required to be adopted and in such an eventuality issue is required to
be framed in regard to the Forensic Audit Report and as such, granted
permission to examine the Auditor.
14 In our opinion, since the order appears to be in tune with the
(11)Apeal-1095-2023.doc
statutory provisions and object of the Statute viz. MPID Act and
already the interest of the Appellant is safeguarded, no case for
causing interference is made out. Both the Appeals, in our opinion,
does not warrant any interference in exercise of Appellate Jurisdiction.
As such, the Appeals stand dismissed.
(MANJUSHA DESHPANDE, J) (NITIN W. SAMBRE, J)
