[Cites 13, Cited by 0]
Bombay High Court
The State Of Maharashtra, Thr. ... vs Sanjeev S/O Shankarrao Khade And ... on 3 February, 2026
Author: Anil L. Pansare
Bench: Anil L. Pansare
2026:BHC-NAG:1708
1 jg.cri.appeal 70.2021.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, AT NAGPUR.
Criminal Appeal No. 70 of 2021
The State of Maharashtra,
Through Sub-Divisional Officer,
(Competent Authority, appointed
under MPID Act) ... Appellant
- Versus -
(1) Sanjeev s/o Shankarrao Khade, (died)
Aged about 49 years,
R/o Plot No. 101, Jayant Mansion-6
Near Kachore lawn, Manish Nagar,
Wardha Road, Nagpur
(2) Mrs. Nanda w/o Sanjeev Khade,
Aged about 45 years,
R/o Plot No. 101, Jayant Mansion-6
Near Kachore lawn, Manish Nagar,
Wardha Road, Nagpur
Added (3) Ayush Sanjeev Khade,
respondent Aged about 25 years,
no. 3 as per R/o Jayanti Mansion-6, Flat No. 101,
Court order Wing-A, Besa Road,
dtd. 3.11.2025
Near Kachore lawns, Vivekanand Nagar,
Manish Nagar, Nagpur. ... Respondents
-----------------------------------------------------
Mr. S. S. Hulke, APP for the State/appellant
Mr. Ajay Khanna with Mr. R. N. Ghuge, Advocates for respondents
-----------------------------------------------------
CORAM : ANIL L. PANSARE AND
NIVEDITA P. MEHTA, JJ.
Date of reserving judgment : 28-01-2026
Date of pronouncing judgment : 03-02 2026
2 jg.cri.appeal 70.2021.odt
JUDGMENT (Per : ANIL L. PANSARE, J.)
The competent authority appointed under M.P.I.D. Act has
filed present appeal under Section 11 of the Maharashtra Protection of
Interest of Depositors (In Financial Establishment) Act, 1999
(hereinafter referred to as 'MPID Act'). Learned District Judge-2 and
Special Court, MPID, Nagpur in MPID Misc. Civil Application No.
3/2016 refused to make absolute notification in respect of property
shown at serial no. 3 in the said notification and released the same in
favour of respondent no. 2. The property is a Flat bearing No. 101
situated on 1st Floor in A-Wing of the building known as Jayanti
Mansion - VI, Manish Nagar, Nagpur. It is jointly owned by respondent
nos. 1 and 2.
2. The competent authority, vide notification dated 29-3-2016
issued under Section 5(3) of the MPID Act, attached properties of
respondent nos. 1 and 2. The respondent no. 1 (since deceased) was a
director of financial institution, namely, M/s Wetell Concepts Private
Limited. According to prosecution, said company had launched various
schemes and promised lucrative returns and thus, received deposits of
Rupees more than 3 Crores from 161 depositors. They failed to return
the amount of deposits. Accordingly, the report was lodged against
directors of the company including respondent no. 1 vide Crime No.
3 jg.cri.appeal 70.2021.odt
313/2011 for the offences punishable under Sections 420, 406, 120-B of
the Indian Penal Code read with Section 3 of the MPID Act. The
appellant - competent authority was satisfied that the respondents have
acquired said properties out of the deposits collected by them and are
not likely to refund the deposits to the depositors. Accordingly, the
prosecution filed application under sub-section (3) of Section 5 of MPID
Act for making order of attachment absolute as also for directions for
realization of assets in terms of Sections 4 and 7 of MPID Act. The
respondents appeared before the trial Court. The respondent no. 2 is
wife of respondent no. 1. Their case was that they purchased flat on
11-5-2011 out of their own income. The respondent no. 2 entered
witness box to prove that the flat is their self-acquired property.
3. Respondent no. 1 died during pendency of the appeal and
his legal representative, viz. respondent no. 3 is brought on record.
4. We have gone through the record including impugned
order. The flat under question was purchased by respondent nos. 1 and
2 for an amount of Rs. 25 Lakhs. The respondent no. 2 in her cross-
examination admitted that in addition to the aforesaid amount, they
paid amount of Rs. 1,95,100/- towards stamp duty, registration fees and
miscellaneous expenses for the purpose of registration.
4 jg.cri.appeal 70.2021.odt
5. According to appellant, respondent no. 1 made following
payments.
Date Amount (Rs.) Cheque/Cash Exhibit No.
893107 drawn on
Axis Bank
032066 drawn on
ICICI Bank
Total Rs. 16,00,000/-
As could be seen, the respondent no. 1 contributed
Rs. 16,00,000/- of which Rs. 11,00,000/- were paid by cash.
Respondent no. 2 paid Rs. 4,01,000/- in following manner.
Date Amount (Rs.) Cheque/Cash Exhibit No.
065842 drawn on
Axis Bank
032058 drawn on
Axis Bank
Total Rs. 4,01,000/-
5 jg.cri.appeal 70.2021.odt
Thus respondent no. 2 had contributed Rs. 4,01,000/- of which
Rs. 51,000/- was paid by cash. Therefore, the total amount paid by
respondent nos. 1 and 2 was Rs. 20,01,000/- whereas total amount of
consideration was Rs. 25,00,000/-. The respondents failed to disclose
the manner in which remaining amount of Rs. 5,00,000/- was paid to
the builder. We also find that the respondents failed to show through
evidence or otherwise, the source of payment made in cash to the
builder.
6. The argument is that payment in cash is a recognized
mode. In our view, it is one thing to say that such mode is a recognized
mode of payment and another to say that without discharging the
source of income, such mode is recognized. One may recognize such
payment provided respondents disclose source of receiving such cash.
The respondents were under obligation to prove the source of receiving
cash. Having not done so, the case of the prosecution that the only
source available to the respondents was the amount deposited by the
depositors, will have to be accepted, though prima facie.
7. At this stage, learned counsel for the respondents submits
that respondent no. 2 in her evidence made a categorical statement that
she was working as Teacher in the school, namely, Saraswati Higher
Secondary School, Kamptee during the period from 1993 to 2007. In
6 jg.cri.appeal 70.2021.odt
this tenure, she had saved considerable money from her salary. She had
also placed on record passbook showing deposit of salary (Exhibit 60)
and payment of provident fund received by her (Exhibit 61). He further
submits that she received sale proceeds of Rs. 3,11,000/- on 16-10-2007
by selling flat at Nagpur owned by her. Further amount of
Rs. 3,85,000/- was received by respondents as sale proceeds by selling
their house at Akola, which was sold on 18-12-2009 (Exhibit 24). This
evidence, according to the respondents counsel, remained unshaken.
8. Even if, the aforesaid evidence is accepted on its face value,
it does not justify the cash component paid to the builder. Learned
counsel for the respondents failed to show us from the passbook or
otherwise that the cash was withdrawn at the relevant time or the
respondents had in their accounts credit balance to justify the payments.
The respondents have made payment during the period from 4-1-2009
till 14-7-2009. The credit balance in respondent no. 2's account for the
period between 4-2-2009 till 14-7-2009 was Rs. 80,329/-. The said
balance is not sufficient to justify the payment or Rs. 11,51,000/- in
cash. Thus, this evidence is of no help to the respondents. So far as
sale proceeds of property at Akola is concerned, it will be also of no
relevance, in as much as the last payment was made on 14-7-2009,
whereas property was sold in December, 2009.
7 jg.cri.appeal 70.2021.odt
9. The respondents intend to take advantage of the date of
sale deed, which admittedly is 11-5-2011. The respondents, however,
were called upon to show the manner in which payment was made. As
noted earlier, the payment was made during the period from 4-1-2009
till 14-7-2009. The respondents failed to show that during this
period, they had sufficient balance to justify cash payment. In the
circumstances, merely because sale deed was executed on 11-5-2011
will not be of any help to the respondents to argue that sale proceeds of
immovable property received in December, 2009 were also utilized for
payment to builder. That apart, respondents led no evidence to show as
to how the remaining amount of Rs. 5,00,000/- was paid to builder nor
is there any evidence as regards payment of Rs. 1,95,100/- made by the
respondents towards stamp duty, registration charges and miscellaneous
expenses.
10. Another limb or argument is that respondent no. 1 became
Director of the company in May, 2010, therefore, he had no occasion
to lay hands to the depositors fund and divert the same for purchasing
property. This argument has been rightly countered by the learned
Additional Public Prosecutor contending that though he was shown to
have become director of the company in May, 2010, he was well
attached to the company in the capacity of the employee having
8 jg.cri.appeal 70.2021.odt
dominance over the deposited amount. He submits that respondent
no. 1 joined the company in the year 2008. He became Additional
Director of the company in September, 2009 and in May, 2010, he
became the Director of the company. He submits that the fact that an
employee becomes Director of the company speaks volumes about his
role. We find substance in the arguments and thus accept the same.
11. The respondent no. 2 also claimed that respondent no. 1
was working as LIC Agent and accumulated savings during three years
commencing from 11-3-2006. His saving account, Exhibit 62, however,
indicates that there is not a single entry of Rupees more than 3,000/-
per month. The balance in his account during the period from 1-1-2009
to 4-7-2009 was not more than Rs. 80,329/-, which includes
commission received from LIC company. Thus, respondents could not
place on record any evidence to show source of huge payment made in
cash. The trial Court has completely ignored this vital aspect and
rendered perverse finding.
12. Learned counsel for the respondents has relied upon
judgment in the case of Georgekutty Chacko Vs. M. N. Saji [2025 SCC
OnLine SC 2204] wherein the Supreme Court held that in money
transactions, the absence of formal documentary proof, such as receipts
9 jg.cri.appeal 70.2021.odt
or bank transfer records, does not automatically negate the existence of
payment, particularly when there is a clear assertion by the payer
regarding cash payments and the promissory note has been accepted by
both parties and upheld by the Courts. The Supreme Court emphasized
that the initial presumption of a legally enforceable debt arises from the
promissory note.
This finding was renderred by the Supreme Court in context with
the dispute involving recovery of amount based on promissory note.
The Supreme Court emphasized that the initial presumption of a legally
enforceable debt arises from the promissory note read with the
provisions of the Negotiable Instruments Act and it is the burden of the
respondent to prove that no such amount was paid. Considering the
legal presumption, the Supreme Court clarified that lack of official proof
for cash payments alone does not justify reducing or dismissing the
claim.
In our view, this judgment will be of no help to the respondents.
The recovery was based on a promissory note and in that context, the
Supreme Court held that formal documentary proof of monetary
transaction will not automatically negate the existence of payment.
Thus, the Supreme Court has not held that the cash transactions are
recognized without disclosing source of the receipts of such payment.
10 jg.cri.appeal 70.2021.odt
13. Another judgment referred to by the respondents is
Chandrashekhar Vaman Patwardhan Vs. State of Maharashtra and
others [2024 SCC OnLine Bom 4137] wherein the High Court held that
attachment under the MPID Act is intended to protect depositors by
attaching property believed to have been acquired from deposits, with a
caution that the Court must ensure that the basis for attachment is
consistent with the statute and the facts. The High Court also held that
where the notified property is shown to have been acquired not from
deposits but from prior legitimate sources, attaching that property
under Section 4 notification is illegitimate.
In the present case, the respondents have not shown that the
aforesaid flat was acquired out of legitimate source. In fact part of
payment made to the builder i.e. amount of Rs. 5,00,000/- is not even
disclosed through evidence either oral or documentary.
14. The third judgment referred to is Muddasani Venkata
Narsaiah (dead) through legal representatives Vs. Muddasani Sarojana
[(2016) 12 SCC 288]. The case revolve around a dispute over the
ownership and possession of a property following death of original
owner, wherein the Supreme Court, in context with the facts before it,
clarified that passing of consideration cannot be questioned by a third
party, who had no authority to challenge the sale deed on this ground.
11 jg.cri.appeal 70.2021.odt
The question, in the present case, is not about challenging the
sale deed but about the disclosure of source to purchase the property
which respondents failed to show.
15. Learned counsel for the respondents then referred to
another case of the Supreme Court in Dr. N. G. Dastane Vs. Mrs. S.
Dastane [(1975) 2 SCC 326]. The case involved matrimonial dispute.
This case is cited by the respondents to contend that in civil
proceedings, the standard of proof is preponderance of probabilities,
meaning that a fact is taken to be proved if it appears more likely than
not on a holistic appreciation of the evidence.
This judgment will be of no assistance to the respondents. The
standard of proof in the present case i.e. payment of sale consideration
is extremely weak. The respondents failed to show the source of cash
paid to the builder even on preponderance of probability.
16. Lastly, the respondents relied on the judgment of Lala
Sukhdarshan Dayal and others Vs. Kasturi Devi and others [(1953) 1
SCC 608] to contend that where a witness gives a clear and categorical
evidence regarding execution of a receipt and payment thereunder, and
such evidence is not challenged in cross-examination, the Court is
bound to accept it as true.
12 jg.cri.appeal 70.2021.odt
17. In our view, the evidence in each case is appreciated,
depending on facts of the case. In the present case, we have noted that
the respondents failed to disclose the source. The question here is not
about receipt of payment by the builder but is about the source of
payment so made by the respondents. The huge amount of cash paid
to the builder is not justified by the respondents. That apart, the
respondents have failed to adduce any evidence in support of payment
of remaining Rs. 5,00,000/-. The findings of the trial Court are based
on the evidence, which is of presumptive nature, in the sense, the trial
Court considered respondent no. 2's version that she was working as
teacher and, therefore, must have to her credit the requisite amount to
be sufficient to hold that she had funds available to her credit to justify
her contribution. The trial Court, however, ignored the entries in the
passbook to justify such payment. Her evidence that respondent no. 1
was working as LIC agent and she was working as teacher will be not
sufficient to infer that she and her husband were having to their credit
an amount of Rs. 16,00,000/- or more.
18. Thus the trial Court failed to appreciate that source of
amount paid to the builder was not disclosed by the respondents. The
impugned order is, therefore, unsustainable. Resultantly, appeal is
allowed. The impugned order dated 13-8-2019 refusing to confirm
13 jg.cri.appeal 70.2021.odt
attachment in respect of Flat No. 101, First Floor, A Wing, Jayanti
Mansion VI, Manish Nagar, Nagpur is quashed and set aside.
19. The attachment of immovable property by Government
Notification bearing No. EOF-0114/CR No. 37/POL-13 dated 29-3-2016
is confirmed in respect of Flat No. 101, First Floor, A Wing, Jayanti
Mansion VI, Manish Nagar, Nagpur.
20. The appeal is disposed of in terms of above.
(NIVEDITA P. MEHTA, J.) (Anil L. Pansare, J.)
wasnik
Signed by: Mr. A. Y. Wasnik
Designation: PS To Honourable Judge
Date: 03/02/2026 14:28:20
