Sakunjay Vyas
Published on: April 23, 2022 at 08:41 IST
The Three Judge Bench of Justice Dr Dhananjaya Y Chandrachud, Justice Surya Kant and Justice Bela M Trivedi of the Supreme Court, rejected the challenge against the constitutional validity of the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act 1999 and upheld the attachments of properties done by the 63 Moons Technologies.
The Supreme Court recently ruled that the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act is Constitutionally valid.
The Three Judge Bench of Justice Dr Dhananjaya Y Chandrachud, Justice Surya Kant and Justice Bela M Trivedi, rejected the challenge against the constitutional validity of the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act 1999 and upheld the attachments of properties done by the 63 Moons Technologies.
It was stated that in 63 Moons Technologies Inc.’s petition before the Bombay High Court, they contended that Section 4 of the MPID Act is arbitrary and unconstitutional, and that it is overbroad since it is subject to numerous restrictions on the rights of individuals as;
- Under Section 4, Sub-Section(1) mandates attachment of the property of all members, directors, partners, managers, or promoters of a Financial Establishment;
- A property attached to Section 4 is divested without due process of law under subsection (2).
- Additionally, the company asserted that the divestiture of a property by a summary procedure under Section 7 is arbitrary.
It stated that in the appeal filed against the 63 Moons Technologies Ltd, The respondents argued that;
- The Supreme Court decided that the Tamil Nadu Protection of Interests of Depositors Statute 1997 is constitutionally valid in KK Bhaskaran v. State (2011).
- In the present case, the Court was not prohibited from examining the constitutional validity of MPID Act provisions since its provisions were not considered by the Court in the said judgment.
The Apex Court while referring to the judgment in the case of Bhaskaran stated that the enactment of the tamil nadu act was not in violation of any of the Fundamental rights provided under the Constitution Of India.
It stated that the judgment deals with the constitutional validity of the Act and deals with the salutary measure which were long over-due to be dealt with.
And that the acts enacted in both Tamil Nadu and Maharashtra are not very different and validity of one can govern the validity of the other.
“The judgment held that the Tamil Nadu Act is constitutionally valid and constitutes a salutary measure which was long over-due to deal with these matters. Significantly, the above extracts from the decision in Bhaskaran (supra) indicate that the differences between the enactment in Tamil Nadu and Maharashtra ―are minor and the view of the court on the validity of the former will govern the validity of the latter enactment as well.“ the Court said.
The Apex Court further stated that the validity of the enactment in Maharashtra has been dealt with in two decisions in State of Maharashtra v. Vijay C. Puljal (2012) and Sonal Hemant Joshi v. State of Maharashtra (2012) and therefore in light of our earlier decisions on the constitutional validity of state legislation governing financial establishments offering deposit schemes, including the MPID Act.
That accordingly legislative competence and test done against Part III of the Constitution, this Court ruled that the MPID Act is constitutionally valid.
That for the reasons stated above we see no need to reopen the issue.
“Having discussed the judgments of this Court on the constitutional validity of the state legislations governing financial establishments offering deposit schemes, including the MPID Act, there is no reason for us to reopen the question. This Court has held that the MPID Act is constitutionally valid on the grounds of legislative competence and when tested against the provisions of Part III of the Constitution.” the Court said.
As a result, the Apex Court rejected the challenge against the constitutional validity of the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act 1999 and upheld the attachments of properties done by the 63 Moons Technologies..
