Bombay High Court
Yogesh Hiralal Setwal And Others vs The State Of Maharashtra And Another on 26 September, 2025
2025:BHC-AUG:26731
1 Cri. Appeal 547-2024.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
CRIMINAL APPEAL NO. 547 OF 2024
Sarjerao Naraynarao Kotkar
Age: 73 years, Occu. : Agriculture,
R/o: Kotkar Mala, Kedgaon
Tal. & Dist. Ahmednagar .. Appellant
Versus
1. The State of Maharashtra
Through Police Station Officer,
Kotwali Police Station,
Tq. Dist. Ahmednagar.
2. Shirish Devidas Kulkarni
Age: 58 years, Occu. : Special Auditor,
R/o. 3rd Floor, Ahmednagar District-
Central Cooperative Bank Building,
Station Road Ahmednagar .. Respondents
Mr. Z. H. Farooqui, Advocate h/f Mr. N. V. Gaware Patil, Advocate
for the Appellant.
Smt. Chaitali Choudhari-Kutti, APP for Respondent/State.
WITH
CRIMINAL APPLICATION NO. 637 OF 2025
IN
CRIMINAL APPEAL NO. 547 OF 2024
Surekha Anil Dighe
Age : 47 years, Occu. : Household,
R/o. House No. 1569, Near Dighe Brick Kline,
Ambika Nagar, Kedgaon,
Dist. Ahmednagar. .. Applicant
Versus
1 of 15
2 Cri. Appeal 547-2024.odt
1. The State of Maharashtra
Through Police Station Officer,
Kotwali Police Station,
Tq. & Dist. Ahmednagar.
2. Shirish Devidas Kulkarni
Age: 58 years, Occu. : Special Auditor,
R/o. 3rd Floor, Ahmednagar District-
Central Cooperative Bank Building,
Station Road Ahmednagar.
3. Sarjerao Narayanrao Kotkar
Age : 73 years, Occu. : Agriculture,
R/o. : Kotkar Mala, Kedgaon
Tal. & dist. Ahmednagar. .. Respondents
Mr. S. N. Gaikwad, Advocate for the Applicant.
Smt. Chaitali Choudhari-Kutti, APP for Respondent/State.
WITH
CRIMINAL APPEAL NO. 580 OF 2024
Dnyandev s/o Wamanrao Shinde,
Age : 58 years, Occu. : Businessmen,
R/o: Jagannath Nagar, Kedgaon
Ahmednagar, Tq. & Dist. Ahmednagar .. Appellant
Versus
The State of Maharashtra
Through Police Station Officer,
Kotwali Police Station, Ahmednagar
Tq. & Dist. Ahmednagar. .. Respondent
Mr. D. R.Kale & Mr. A. A. Pawar, Advocates for the Appellant.
Smt. Chaitali Choudhari-Kutti, APP for Respondent/State.
WITH
CRIMINAL APPLICATION NO. 3343 OF 2024
IN
CRIMINAL APPEAL NO. 547 OF 2024
2 of 15
3 Cri. Appeal 547-2024.odt
1. Yogesh s/o Hiralal Setwal
Age : 48 years, Occu. : Service,
R/o. Nandanwan Nagar, Near Bistabag,
Savedi, Ahmednagar.
2. Asha w/o Sanjay Bhadane
Age : 58 years, Occu. : Housewife,
R/o. Shahu Nagar, Kedgaon,
Ahmednagar.
3. Ashok s/o Bhagchand Munot
Age : 54 years, Occu. : Business,
R/o. Balaji Colony, Kedgaon,
Tq. & Dist. Ahmednagar.
4. Ravi s/o Ramesh Bansode
Age : 49 years, Occu. : Business,
R/o. Mahdav Nagar, Kedgaon,
Tq. & Dist. Ahmednagar. .. Applicants
Versus
1. The State of Maharashtra
Though its Principal Secretary,
Home Department, Mantralaya,
Mumbai.
2. Sarjerao s/o Narayanrao Kotkar
Age : 60 years, Occu. : Business,
R/o. : Kedgaon,
Tal. & Dist. Ahmednagar. .. Respondents
Mr. N. B. Narwade, Advocate for the Applicants.
Smt. Chaitali Choudhari-Kutti, APP for Respondent/State.
CORAM : KISHORE C. SANT, J.
Date on which reserved for order : 17th July, 2025.
Date on which order pronounced : 26th September, 2025.
3 of 15
4 Cri. Appeal 547-2024.odt
FINAL ORDER :-
. The present appeals are filed challenging similar orders and
therefore, the appeals are taken up together for final disposal by
consent of the parties.
2. By way of criminal appeals the appellants/original accused
persons are challenging the legality and validity of impugned
order dated 18.05.2024 passed under Section 7 of the
Maharashtra Protection of Interest of Depositors (In Financial
Establishments) Act, 1999 (hereinafter referred to as "M.P.I.D.
Act") by the learned Special Judge (MPID Act), Ahmednagar in
Special Case No. 167/2019. The appellants are the Directors of
one Ambika Gramin Bigar Sheti Sahakari Pat Sanstha Maryadit,
Kedgaon, Tq. & Dist. Ahmednagar. The informant was appointed
as authorized officer to conduct Government Test Audit of the
society for a period from 01.04.2016 till 31.03.2018. After
conducting audit he found some irregularities and
misappropriation of funds of Rs. 2,13,79,947/- (Rs. Two Crore
Thirteen Lakhs Seventy Nine Thousand Nine Hundred Forty Seven
only). On the basis of his information an offence came to be
registered with Kotwali Police Station bearing Crime No.
4 of 15
5 Cri. Appeal 547-2024.odt
393/2018 for the offences punishable under sections 406, 409,
420, 467, 468, 471 r/w section 34 of the Indian Penal Code
(hereinafter referred to as "I.P.C.") and under section 3 of the
M.P.I.D. Act. The offence came to be registered on 03.09.2018.
The appellants are granted protection of anticipatory bail on
deposit of an amount of Rs. 5,00,000/- (Rs. Five Lakhs only).
Now, the charge-sheet is also filed with the learned Special Court.
Pending the trial, the Chief Secretary, Home Department directed
to seize the properties of the society as well as the office bearers
by order dated 30.12.2021. The said order is passed under
section 4(1) and section 5 of the M.P.I.D. Act. For that purpose he
appointed learned Sub Divisional Magistrate as a competent
authority. After seizure of the properties the prosecution filed an
application on 06.05.2024 and prayed to allow to auction the
seized properties. The learned Trial Court allowed the said
application by impugned order dated 18.05.2024. The appellants
are therefore before this Court.
3. It is commonly argued that the present appellants are only
the Directors of the society. In Criminal Appeal No. 547/2024
appellant happens to be a daughter of one of the director. It is her
5 of 15
6 Cri. Appeal 547-2024.odt
case that she also has a right in the property attached. The order
of attachment is passed when she is not an accused or direcotr of
the society. The learned Trial Judge has hastily passed an order.
No such order could have been passed by the learned Trial Court.
There is no question of selling or disbursing of the properties
attached of the Directors. There was no sufficient opportunity
given to the appellants before passing the order. It is argued that,
no proper procedure under section 5 of the M.P.I.D. Act is
followed. The order of attachment came to be passed after two
years . The notification for attachment was passed on 30.12.2021
whereas, the application under section 7 of the M.P.I.D. Act is filed
on 06.05.2024. It was expected of the Court to follow the
procedure under section 7. It is necessary for the Court to record
satisfaction before passing the order. No such satisfaction is
appearing in the order. The properties of the appellants are the
ancestral or self acquired properties and not the properties
acquired from the funds allegedly from the amount of the offence.
The property of the appellants which is attached is not shown in
the gazette. The Court without looking to this fact has passed an
order. It is mainly argued that it was necessary to apply within 30
6 of 15
7 Cri. Appeal 547-2024.odt
days to the Court for auction as per section 5. The impugned
order therefore deserves to be quashed and set aside.
4. The learned A.P.P., on the other hand, vehemently argued
that, sufficient opportunity was given to the appellants, however,
in spite of opportunities they did not even file say to an
application filed by the prosecution seeking permission to
sell/auction the properties. The amount utilized for purchase of
these properties is the amount of deposits kept in the society by
the depositors. She submits that the proper procedure is followed.
Even personal properties of the Directors can be attached. So far
as Criminal Appeal No. 547/2024 is concerned, the learned A.P.P.
relies upon the judgment in the case of Nimish Satish Deopujari
Vs. The State of Maharashtra reported in 2021 (1) ALL MR 501.
She further relies upon the judgment in the case of Balasaheb
Eknath Ambedkar Vs. The State of Maharashtra and others in
Criminal Appeal No. 960/2024 with other connected matters. The
learned A.P.P. further relied upon affidavit in reply filed by the
respondent-authority. She thus prays for rejection of the appeals.
The learned A.P.P. has also filed on record affidavit in reply.
7 of 15
8 Cri. Appeal 547-2024.odt
5. The parties rely upon the following judgments :
(i) Satpal Singh Bachan Singh Nagul & Anr. Vs.
State of Maharashtra & Anr. reported in 2019 ALL
MR (Cri) 4237.
(ii) State of Jharkhand and others Vs. Ambay
Cements and another reported in (2005) 1 SCC
368.
(iii) Sanjay Krushna Katkar Vs. State of
Maharashtra and another with other connected
matters reported in 2023 SCC OnLine Bom 1834
(Full Bench Judgment).
(iv) Chandrashekhar Vaman Patwardhan Vs. The
State of Maharashtra and others in Criminal Appeal
No. 1072/2021.
(v) Ramchandra Keshav Adke (Dead) by Lrs. And
others Vs. Govind Joti Chavare and others reported
in (1973) 1 SCC 559.
6. Thus, it is necessary to see as to whether in the present case
the authorities have followed the procedure under sections 5 and
7 of the M.P.I.D. Act.
7. This Court has gone through the impugned orders. The
8 of 15
9 Cri. Appeal 547-2024.odt
question before this Court, in view of the submissions and the
record is, (i) as to whether the procedure under sections 5 and 7
of the M.P.I.D. Act is properly followed while attaching the
properties and passing the orders and (ii) as to whether case is
made out to allow the criminal appeals.
8. The learned Trial Judge considered that, the Government
notification shows that the Sub Divisional Officer i.e. Sub
Divisional Magistrate is a competent authority to attach and sell
out the properties of the accused persons. An affidavit filed by the
Magistrate is also considered. Further it is observed that, the
persons depositing the amount have deposited their hard earned
money in the society with a hope to get lucrative returns. He
considered the official gazette and granted permission to sell the
properties.
9. In the case of Sanjay Krushna Katkar (supra), it is held that,
when procedure under section 5 of the M.P.I.D. Act is not
followed, further proceeding would stand vitiated. This Court
finds that, even section 7 of the M.P.I.D. Act is not followed.
Sections 5 and 7 of the M.P.I.D. Act reads as under :
9 of 15
10 Cri. Appeal 547-2024.odt
5. Appointment of Competent Authority.-- (1) The
Government may while issuing the order under sub-
section (1) of section 4, appoint any of its officers not
below the rank of the Deputy Collector, as the Competent
Authority, to exercise control over the monies and the
properties attached by the Government under section 4, of
a Financial Establishment.
(2) The Competent Authority shall have such other powers
as may be necessary for carrying out the purposes of this
Act.
(3) The Competent Authority shall, within thirty days from
the date of the publication of the said order, apply to the
Designated Court, accompanied by one or more affidavits
stating the 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.
...........
7. Powers of Designated Court regarding attachment.--
(1) Upon receipt of an application under section 5, the
Designated Court shall issue to the Financial
Establishment or to any other person whose property is
attached and vested in the Competent Authority by the
Government under section 4, a notice accompanied by the
application and affidavits and of the evidence, if any,
recorder, calling upon the said Establishment or the said
person to show cause on a date to be specified in the
notice, why the order of attachment should not be made
absolute.
(2) The Designated Court shall also issue such notice, to
all other persons represented to it as having or being likely
to claim, any interest or title in the property of the
Financial Establishment or the person to whom the notice
is issued under sub-section (1), calling upon all such
10 of 15
11 Cri. Appeal 547-2024.odt
persons to appear on the same date as that specified in the
notice and make objection if they so desire to the
attachment of the property or any portion thereof, on the
ground that they have interest in such property or portion
thereof.
(3) Any person claiming an interest in the property
attached or any portion thereof may, notwithstanding that
no notice has been served upon him under this section,
make an objection as aforesaid to the Designated Court at
any time before an order is passed under sub-section (4)
or sub-section (6).
(4) The Designated Court shall, if no cause is shown and
no objections are made under sub-section (3), on or before
the specified date, forthwith pass an order making the
order of attachment absolute, and issue such direction as
may be necessary for realisation of the assets attached and
for the equitable distribution among the depositors of the
money realised from out of the property attached.
(5) If cause is shown or any objection is made as
aforesaid, the Designated Court shall proceed to
investigate the same and in so doing, as regards the
examination of the parties and in all other respects, the
Designated Court shall, subject to the provisions of this
Act, follow the summary procedure as contemplated under
Order 37 of the Civil Procedure Code, 1908 (5 of 1908)
and exercise all the powers of a court in hearing a suit
under the said Code and any person making an objection
shall be required to adduce evidence to show that on the
date of the attachment he had some interest in the
property attached.
(6) After investigation under sub-section (5), the
Designated Court shall pass an order either making the
order of attachment passed under sub-section (1) of
section 4 absolute or varying it by releasing a portion of
the property from attachment or cancelling the order of
attachment:
Provided that the Designated Court shall not release from
attachment any interest, which it is satisfied that the
11 of 15
12 Cri. Appeal 547-2024.odt
Financial Establishment or the person referred to in sub-
section (1) has in the property, unless it is also satisfied
that there will remain under attachment an amount or
property of value not less than the value that is required
for repayment to the depositors of such Financial
Establishment.
10. The learned Trial Judge has not recorded any satisfaction
showing that the properties attached are the properties acquired
from the funds of the society from deposits of the persons. It was
necessary for the Court to see that proper procedure under
Sections 5 and 7 of the M.P.I.D. is followed and it is only thereafter
the Court could have granted permission to go for auction. The
application was not filed within 30 days as required under section
5 of the Act.
11. So far as judgment in the case of Nimish Satish Deopujari
(supra) is concerned, there is no dispute that even personal
properties of the Directors can be attached, however, it must be
shown to the satisfaction of the Court that the said properties are
properties acquired from the funds collected from deposits of the
depositors. So far as M.P.I.D. Act is concerned, this Court does not
find that it is applicable to the present facts. Though the learned
A.P.P. submits that the proceeding can be made time bound in
12 of 15
13 Cri. Appeal 547-2024.odt
stead of setting aside the order this Court finds that, when
valuable right of the present appellants is involved it is necessary
to deal with the order instead of directing to dispose of the
proceedings within stipulated period.
12. In the case of Balasaheb Eknath Ambedkar (supra), the said
case is of condonation of delay in moving the application beyond
period of 30 days. The said judgment would also not help the
respondents in the present case.
13. In the case of State of Jharkhad and others (supra),
paragraph No. 26 reads as under :
"26. Whenever the statute prescribes that a particular act is
to be done in a particular manner and also lays down that
failure to comply with the said requirement leads to severe
consequences, such requirement would be mandatory. It is
the cardinal rule of the interpretation that where a statute
provides that a particular thing should be done, it should be
done in the manner prescribed and not in any other way. It is
also settled rule of interpretation that where a statute is
penal in character, it must be strictly construed and
followed. Since the requirement, in the instant case, of
obtaining prior permission is mandatory, therefore, non-
compliance of the same must result in canceling the
concession made in favour of the grantee-the respondent
herein."
14. In the case of Satpal Singh Bachan Singh Nagul (supra), in
13 of 15
14 Cri. Appeal 547-2024.odt
the said case the property was symbolically attached and stood in
the name of Government, however, at the same time it was
observed that this was done without following procedure under
section 7 of the M.P.I.D. Act. It was observed that section 8 can be
invoked only when the properties are notified under section 4. In
the present case, no such publication is shown and therefore,
there is no question of invoking section 8.
15. In the case of Chandrashekhar Vaman Patwardhan (supra),
subject matter of the said appeal was not the property included in
the notification. It was not open for attachment. Permitting to
attach and sell the properties would amount to nullifying several
transactions made bonafide. It was further observed that, it was
not the case of the Government that the property was transferred
to avoid the liability.
16. In the case of Ramchandra Keshav Adke (supra), this
judgment is relied upon as regards as to whether how to read the
provision as to whether it is mandatory or directory.
17. This Court is not satisfied with the affidavit in reply that a
case is made out to reject the appeals. Considering above all, this
14 of 15
15 Cri. Appeal 547-2024.odt
Court is convinced that, a case is made out to allow the appeals.
18. Therefore, criminal appeals are allowed in terms of prayer
clause (B). The impugned orders are set aside.
19. In view of disposal of criminal appeals, criminal applications
also stand disposed of.
( KISHORE C. SANT, J. )
P.S.B.
15 of 15
