0
Nagpur High Court

MPID Act applicable to builders: HC

Spread the love

Upholding the applicability of the provisions of the Protection of Interest of Depositors (In Financial Establishments) Act -MPID Act-1999, to the cases against developers/builders, Justice Sunil B Shukre and Justice Madhav J Jamdar at the Nagpur Bench of the Bombay High Court has put an end to legal debate on this aspect for the present and has given a lot of cause to be happy to much-harassed flat-purchasers.

 

Manohar Bhimraoji Mahalle and 4 others filed an appeal against the order passed by the honorable Sessions Court Amravati. Dismissing the application at Exh.56 in respect of the applicability of the provisions of the MPID Act. The High Court observed that on the basis of the agreement of June 14, 2012, flats were sold to about 514 flat -purchasers. Thus, it is clear that the “Financial Establishment” has got rights in the property. Apart from this aspect, both appellants as well as the respondents, that is, “builders/ Developers/ Financial Establishments”- Rana Landmark Pvt Ltd- are under obligation to perform their statutory duties under the MOFA. In fact, Section 8 of the MOFA creates a charge of flat-purchasers on the said property. Thus, it is clear that not only the said property is property of the “Financial Establishment” as set out herein, but there is also a charge of the flat-purchasers on the said property. Therefore, looking from any angle it cannot be said that no right is created by the said agreement of June 14, 2012, and in fact, as the ‘Financial Establishment’ has rights in the said property, Section 4 of the MPID Act is also applicable to the same. Thus, it is very clear that the property which is the subject matter of present appeal comes under the purview of Section 4 of the MPID Act. The court points out that the MPID Act was enacted to protect the interest of depositors in the Financial Establishments and the matters relating thereto. The term ‘deposit’ is defined in Section 2(c) of the MPID Act, which includes any receipt of money by any ‘Financial Establishment’ to be returned after a specified period or otherwise either in cash or in-kind or in the form of specified service with or without any benefit in the form of interest, bonus, profit or in any other form. In this case, about 514 flat-purchasers have paid substantial amounts to the ‘Financial Establishment’, as it had agreed to give possession of the flats to be constructed on the same plots. This makes it amply clear that payment of money to it by these purchasers is covered under the definition of ‘deposit’ in the MPID Act. The court has dismissed the appeal with the cost.

 

Learned Senior Counsel Shri S P Dharmadhikari Appeared for the Appellant Shri T A Mirza A.P.P. for the state, Shri S. S. Das appeared for respondent no. 2 Yogesh Rana. Shri P. S. Wathode appeared for respondent no. 6, Abhay Shribhate

Read Order

Leave a Reply

Your email address will not be published. Required fields are marked *

Need Help? Chat with us