Full Judgment Text
REPORTABLE
2026 INSC 489
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 2537 OF 2026
(Arising out of SLP (Crl.) No. 19305 OF 2025)
ALKA AGRAWAL AND OTHERS …APPELLANTS
VERSUS
STATE OF MAHARASHTRA
AND OTHERS …RESPONDENTS
J U D G M E N T
N.V. ANJARIA, J.
Leave granted.
2. The present appeal is directed against judgment and
order dated 14.08.2025 passed by the High Court of
1
Judicature at Bombay, Nagpur Bench, Nagpur , dismissing
Criminal Revision Application No.64 of 2024 filed by the
appellants with cost of Rs.5,00,000/-.
2.1 The crux of the controversy is whether the amounts
given by the appellants to respondent Nos.2 to 6 are covered
Signature Not Verified
Digitally signed by
MINI
Date: 2026.05.15
15:07:54 IST
Reason:
1
Hereinafter, “High Court”.
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within the ambit of concept of “deposit” as defined under
Section 2(c) of the Maharashtra Protection of Interest of
2
Depositors (in Financial Establishments) Act, 1999 .
3.
The facts in the backdrop may be outlined. Appellant
Nos.1 to 5 are the members of a family whereas appellant
Nos.6 and 7 are two Companies. As stated by the appellants,
somewhere in the year 2016, respondent No.2 approached
them through one Mr. Vedant Prakash Agrawal and induced
them to invest amounts for setting up a resort at Tadoba,
Maharashtra, promising that, in return, the appellants
would get interest at the rate of 24% per annum payable
quarterly in advance. Guided by the representations and
assurances, the appellants invested total amount of Rs.2.51
crore by paying such amount through cheques or bank
transfer in favour of respondent Nos.2 to 6.
3.1 The details of the amount paid by the appellants are
as follows (i) Appellant Nos. 6 and 7 paid Rs.25,00,000/-
each in favour of respondent Nos.5 and 6 (ii) Appellant No.1
advanced Rs.95,00,000/-, Rs.45,00,000/- and
2
Hereinafter, “MPID Act”.
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Rs.30,00,000/- to respondent Nos.2, 4 and 3 respectively
(iii) Appellant No.2 paid Rs.10,00,000/- in favour of
respondent No.4 (iv) Appellant No.5 paid Rs.4,25,000/- in
favour of respondent No.3 (v) Appellant No.4 paid
Rs.6,75,000/- in favour of respondent No.3 and (vi)
Appellant No.3 paid Rs.10,00,000/- in favour of respondent
No.3. The amounts, according to the appellants, were to be
repaid by 31.12.2019. Respondent Nos.2 to 6 not only did
not pay the interest but also failed to pay the principal
amount to the appellants.
3.2 As respondent Nos.2 to 6 did not pay the interest nor
did they repay the principal amount, the appellants took
legal action against them on several fronts. The appellants
sent legal notice dated 08.05.2021 to respondent Nos.2 to 6
demanding the principal sum of Rs.2.51 crore along with
unpaid interest and then filed a complaint before the
Commissioner of Police, Nagpur on 13.05.2021. In reply
dated 22.05.2021 to the said legal notice of the appellants,
respondent Nos.2 to 6 admitted that they had received the
said amount but stated that as soon as the financial crisis
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caused by COVID-19 was over, they would pay the said
amounts to the appellants. However, respondent Nos.2 to 6
denied that they were liable to repay the amount by a
particular date or that they were bound to pay any interest.
3.3 It appears that the cheque bearing No.000521 dated
01.10.2021 drawn in favour of the appellants by respondent
No.4 stood dishonoured for the reason “payment stopped by
drawer”, which led appellant No.1 to issue a notice under
3
Section 138 of the Negotiable Instruments Act, 1881 .
Respondent No.4 admitted, in his response dated
17.11.2021, that she has accepted Rs.45,00,000/- from
appellant No.1, however, again denied that interest was
payable.
3.4 It further transpires that the appellants individually
instituted various summary suits against respondent Nos.2
to 6 before the competent civil courts seeking recovery of the
amounts given. However, request of the appellants to
4
register the First Information Report against respondent
3
Hereinafter, “NI Act”.
4
Hereinafter, “FIR”.
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Nos.2 to 6 was not accepted by the police. Therefore, the
appellants filed Criminal Miscellaneous Application No.369
of 2022 praying for directions to the police station concerned
for registration of the FIR against respondent Nos.2 to 6
under Sections 420, 409 and 405 read with Section 34,
5
Indian Penal Code, 1860 .
3.5 The Chief Judicial Magistrate, Nagpur, by order
dated 28.01.2022, directed the Deputy Commissioner of
Police, Economic Offence Wing, Civil Lines, Nagpur to
register the offence, which order, however, came to be
challenged by respondent Nos.2 to 6 by filing Criminal
Revision Application No.35 of 2022. The said Criminal
Revision Application No.35 of 2022 was allowed by learned
Additional Sessions Judge, Nagpur by order dated
04.03.2022 taking a view that no cognizable offence was
disclosed from the allegations.
3.6 Aggrieved, the appellants filed Criminal Application
(APL) No.404 of 2022 before the High Court, however, the
High Court dismissed the same as per order dated
5
Hereinafter, “IPC”.
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05.04.2022, reasoning that payment of interest at the rate
of 24% per annum on quarterly basis was indicative that the
transaction was a “loan transaction”, and was of civil nature.
3.7
The appellants, having exhausted themselves in all
the aforementioned litigation, finally filed a complaint on
20.10.2022 before the District Collector, Nagpur and the
Principal Secretary Special (Home Department),
Government of Maharashtra under the MPID Act against
respondent Nos.2 to 6. On 09.03.2023, the Economic
Offence Wing submitted a report expressing that no
cognizable offence was made out against respondent Nos.2
to 6.
3.8 Thereafter on 03.04.2023, the appellants proceeded
to file Criminal Miscellaneous Application No.158 of 2023
before learned Sessions Judge, Nagpur, under Section
6
156(3) of the Code of Criminal Procedure, 1973 praying for
registration of an FIR against respondents under Section 3
of the MPID Act. The said Criminal Miscellaneous
6
Hereinafter, “CrPC”.
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Application came to be dismissed by order dated
22.11.2023.
3.9 The aforesaid order of learned Additional Sessions
Judge was subjected to challenge by the appellants before
the High Court by filing Criminal Revision Application No.64
of 2024, which stood dismissed as per the impugned
judgment. The High Court, while dismissing the Criminal
Revision Application, proceeded with three-dimensional
reasoning. First was that the amounts received by
respondent Nos.2 to 6 from the appellants between
30.09.2016 and 14.04.2019 were a “loan transaction” and
that it would not fall within the purview of “deposit” under
Section 2(c) of the MPID Act, and further that the dispute
was of civil nature. Secondly, it was the view of the High
Court that respondent Nos.2 to 6 did not come within the
purview of “financial establishment” under Section 2(d) of
the MPID Act. The third aspect which guided the High Court
was that the instant application was identical to the earlier
Criminal Application (Apl.) No. 404 of 2022 in which the
applicants had invoked the offences under IPC against
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respondent Nos.2 to 6 and the High Court found that the
ingredients of the said offences were not made out.
4. Learned counsel for the appellants Mr. Naveen
Hegde assisted by other advocates submitted that the
amounts given to respondent Nos.2 to 6 stands covered
under the wide definition of “deposit” under Section 2(c) of
the Act. The definition of “financial establishment” under
Section 2(d) of the Act was also highlighted to submit that
respondent Nos.2 to 6 would come within the purview of
“financial establishment”. It was next submitted on behalf of
the appellants that respondent Nos.2 to 6 have not disputed
the receipt of amounts advanced to them by the appellants
to be repaid with interest. Respondent Nos.2 to 6 defaulted
in repaying the amounts and conducted themselves
fraudulently, it was submitted.
4.1 Section 3 of the MPID Act was referred to, to submit
that it prescribes that a “financial establishment” is liable
where it has fraudulently defaulted in repayment of a
“deposit” along with any other promised benefit. It was
submitted that the expression “fraudulent default”
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contemplated a default with an intention of causing
wrongful gain to one person or wrongful loss to another
person.
4.1.1
Assailing the reasoning supplied in the impugned
judgment by the High Court, it was submitted on behalf of
the appellants that the other proceedings taken out by the
appellants under Section 156(3), Cr.PC for the offences
under Sections 420, 409 and 405 read with Section 34, IPC
were different proceedings and cannot operate adverse to the
claim of the appellants under the MPID Act.
4.2 On the other hand, learned counsel Mr. Samrat
Krishnarao Shinde assisted by advocate on record Mr.
Rameshwar Prasad Goyal for the respondents raised the
following submissions:
(i) The appellants have indulged in abuse of process of
law inasmuch as the dispute is purely a civil dispute
relating to repayment of loan given by appellant
No.2, which was a transaction rooted on friendly
terms with respondent No.2. A dispute regarding
repayment of money given as loan is of civil nature.
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(ii) The dispute of such a nature could not have been
subjected to criminal proceedings just to exert
pressure or to settle the score. The decisions in
Indian Oil Corpn. vs. NEPC India Ltd. and
7
Others , G. Sagar Suri and Another vs. State of
8
U.P. and Others , Shailesh Kumar Singh alias
Shailesh R. Singh vs. State of Uttar Pradesh and
9
Others and Anukul Singh vs. State of Uttar
10
Pradesh and Another were sought to be pressed
into service in support of the proposition that a
dispute which is essentially of civil nature cannot be
given a cloak of criminal offence and criminal action
could not have been employed to enforce recovery of
the amount.
(iii) The appellants already resorted to other remedies.
They filed application under Section 156(3), Cr.PC
for direction to the police authority to register FIR in
respect of offences under the IPC in which the
7
(2006) 6 SCC 736
8
(2000) 2 SCC 636
9
2025 SCC OnLine SC 1462
10
2025 SCC OnLine SC 2060
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appellants have remained unsuccessful up to the
High Court and it was found that no cognizable
offence was disclosed.
(iv) In those proceedings also, the fact was suppressed
by the appellants that respondent Nos.2 to 6 have
repaid Rs.1,81,06,259/- to them.
(v) The transaction was “loan transaction” and the
appellants were to receive interest at 24% per
annum on quarterly basis.
(vi) The offences under Sections 420, 409 and 405 read
with Section 34, IPC as asserted against the
respondents, having not been made out in the
proceedings under Section 156(3), Cr.PC, it is now
not open to the appellants to fall back upon the
provisions of the MPID Act.
(vii) The provisions of the MPID Act would not attract in
the facts of the present case as it has been the
consistent case of the appellants that appellant No.2
is a “reputed businessman” and that he was on
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friendly terms with respondent No.2 who had
requested appellant No.2 to lend money pursuant to
which the loan was arranged by appellant No.1.
(viii) There is no “fraudulent default” by a “financial
establishment” to attract Section 3 of the MPID Act.
(ix) Respondent Nos.2 to 6 did not make any
impracticable or commercially unviable promises
while accepting the loan, else they would not have
repaid the part sum of loan.
(x) The amounts were not obtained by respondent
Nos.2 to 6 under any scheme or by floating any
scheme nor they had invited deposits from the
public at large, in which circumstance, only the
provisions of the MPID Act could apply.
5. The MPID Act, which received the assent of the
th
President on 20 January 2000 and published in the
st
Maharashtra Government Gazette, Part IV, dated 21
January 2000, was enacted with a view to protect the
interests of depositors in the financial establishments and
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the matters relating thereto. At the time of introduction of
the Bill in the Legislature, the Statement of Objects and
Reasons mentioned that the Statute was designed to protect
the public from the increasing menace of Financial
Establishments which, very often, grab money from the
public in the form of deposits.
5.1 Noticing at the outset the purpose and spread of the
MPID Act, following was stated in the Statement of Objects
and Reasons,
“There is a mushroom growth of Financial
Establishments in the State of Maharashtra in the
recent past. The sole object of these establishments
is of grabbing money received as deposits from
public, mostly middle class and poor on the
promises of unprecedented high attractive interest
rates of interest or rewards and without any
obligation to refund the deposit to the investors on
maturity or without any provision for ensuring
rendering of the services in kind in return, as
assured. Many of these Financial Establishments
have defaulted to return the deposits to public. As
such deposits run into crores of rupees, it has
resulted in great public resentment and uproar,
creating law and order problem in the State of
Maharashtra, especially in the city like Mumbai
which is treated as the financial capital of India. It
is, therefore, expedient to a make a suitable
legislation in the public interest to curb the
unscrupulous activities of such Financial
Establishments in the State of Maharashtra.”
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5.1.1 A brief visit to the provisions of the Act would be
relevant. Section 2(a) of the MPID Act defines “Competent
Authority” to mean the authority appointed under Section 5
of the Act. “Designated Court” is one constituted under
Section 6 of the Act. Section 2(c) defines “deposit”, whereas
Section 2(d) contains the definition of “Financial
Establishment”, which are reproduced hereinafter. Section
3 is about fraudulent default by Financial Establishments.
Section 4 contemplates attachment of the properties on
default of return of deposit over which the control is
exercised by the Competent Authority appointed under
Section 5 of the MPID Act.
5.1.2 Section 6 of the MPID Act is about constitution of
“Designated Court” and Section 7 envisages the power of
“Designated Court” regarding attachment. Section 8 is
regarding attachment of properties of mala fide transferees.
Section 9 provides for security in lieu of attachment, and
Section 10 is regarding the administration of property
attached. Appeal is provided under Section 11 of the Act.
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5.1.3 Thus, the MPID Act is served by elaborate provisions
both regulatory and penal in nature enacted to protect the
depositors' interest. The Act could be said to be providing a
quasi-criminal remedy, as Section 3 makes the offence of
fraudulent default by the Financial Establishment to be an
offence punishable with imprisonment for a term which may
extend to six years with fine to extend to one lakh rupees on
conviction. Criminal action for the said offence would lie
against the defaulter and FIR could be lodged under the said
Section 3 of the MPID Act.
5.1.4 The MPID Act is a self-contained Code, which creates
an independent machinery and mechanism to provide
remedial measures to the victim depositors and to check and
punish Financial Establishments, which will include any
person accepting deposit has fraudulently committed
default duping the investors.
5.2 As the dispute in the present case, in its ultimate
analysis, revolves around as to whether the payment made
or amounts given by the appellants fall within the ambit of
“deposit” as defined under the MPID Act, the relevant
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definition becomes pivotal to be considered. Section 2(c) of
the MPID Act defines “deposit”.
5.2.1 The definition is extracted hereinbelow:
“ 2. Definitions.— In this Act, unless the context
otherwise requires,—
…………..
(c) “deposit” includes and shall be deemed always
to have included any receipt of money or
acceptance of any valuable commodity by any
Financial Establishment to be returned after a
specified period or otherwise, either in cash or in
kind or in the form of a specified service with or
without any benefit in the form of interest, bonus,
profit or in any other form, but does not include—
(i) amount raised by way of share capital
or by way of debenture, bond or any
other instrument covered under the
guidelines given, and regulations made,
by the SEBI, established under the
Securities and Exchange Board of India
Act, 1992 (15 of 1992);
(ii) amounts contributed as capital by
partners of a firm;
(iii) amounts received from a scheduled
bank or a co-operative bank or any
other banking company as defined in
clause (c) of section 5 of the Banking
Regulation Act, 1949 (10 of 1949);
(iv) any amount received from,—
(a) the Industrial Development
Bank of India,
(b) a State Financial Corporation,
(c) any financial institution
specified in or under section 6A of
the Industrial Development Bank
of India Act, 1964 (18 of 1964), or
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(d) any other institution that may
be specified by the Government in
this behalf;
(v) amounts received in the ordinary
course of business by way of,—
(a) Security deposit,
(b) dealership deposit,
(c) earnest money, (d) advance
against order for goods or
services;
(vi) any amount received from an
individual or a firm or an association of
individuals not being a body corporate,
registered under any enactment relating
to money lending which is for the time
being in force in the State; and
(vii) any amount received by way of
subscriptions in respect of a Chit.
Explanation I.— “Chit” has the meaning as
assigned to it in clause (b) of section 2 of the Chit
Funds Act, 1982 (40 of 1982);
Explanation II.— Any credit given by a seller to a
buyer on the sale of an property (whether movable
or immovable) shall not be deemed to be deposit for
the purposes of this clause;”
5.2.2 The above definition inter-alia includes any receipt of
money or acceptance of any valuable commodity by a
Financial Establishment. The term “Financial
Establishment” is defined in Section 2(d) of the MPID Act,
which is as under,
“ 2. Definitions.— In this Act, unless the context
otherwise requires,—
…………..
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(d) “Financial Establishment” means any person
accepting deposit under any scheme or
arrangement or in any other manner but does not
include a corporation or a co-operative society
owned or controlled by any State Government or
the Central Government or a banking company as
defined under clause (c) of section 5 of the Banking
Regulation Act, 1949;”
5.2.3 “Financial Establishment” as defined in Section 2(d)
means “any person” accepting deposit either under any
scheme or arrangement or “in any other manner”. The
definition takes out from its purview a corporation or
cooperative society controlled or owned either by the State
or the Central Government. It also excludes a banking
company as defined under Section 5(c) of the Banking
Regulation Act, 1949.
5.2.4 The definition of “financial establishment” in Section
2(d) of the MPID Act has also a wide coverage to mean “any
person accepting deposit under any arrangement or in any
other manner”. The expanse of Section 2(d) of the MPID Act
undoubtedly covers “any person accepting deposit”.
5.3 As stated, Section 3 of the MPID Act is in respect of
fraudulent default committed by Financial Establishments.
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The section provides for punishment upon conviction of
every person including the promoter, partner, director,
manager or employee found responsible for the management
or in conducting the business or affairs of the Financial
Establishment which has fraudulently defaulted in the
repayment of deposits.
5.3.1 Section 3 is extracted hereunder,
“3. Fraudulent default by Financial
Establishment.— Any Financial Establishment,
which fraudulently defaults any repayment of
deposit on maturity alongwith any benefit in the
form of interest, bonus, profit or in any other form
as promised or fraudulently fails to render service
as assured against the deposit, every person
including the promoter partner, director, manager
or any other person or an employee responsible for
the management of or conducting of the business
or affairs of such Financial Establishment shall, on
conviction, be punished with imprisonment for a
term which may extend to six years and with fine
which may extend to one lac of rupees and such
Financial Establishment also shall be liable for a
fine which may extend to one lac of rupees.
Explanation.— For the purpose of this section, a
Financial Establishment, which commits default in
repayment of such deposit with such benefits in the
form of interest, bonus, profit or in any other form
as promised or fails to render any specified service
promised against such deposit, or fails to render
any specific service agreed against the deposit with
an intention of causing wrongful gain to one person
or wrongful loss to another person or commits such
default due to its inability arising out of
impracticable or commercially not viable promises
made while accepting such deposit or arising out of
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deployment of money or assets acquired out of the
deposit in such manner as it involves inherent risk
in recovering the same when needed shall, be
deemed to have committed a default or failed to
render the specific service, fraudulently.”
5.4 While extensively discussing the scheme of the MPID
Act, this Court in State of Maharashtra vs. 63 Moons
11
Technologies Ltd. adverted to discuss the scope of the
expression “deposit” in Section 2(c) of the MPID Act and
observed that the definition has these ingredients, “(i) Any
receipt of money or the acceptance of a valuable commodity
by a financial establishment (ii) Such acceptance ought to
be subject to the money or commodity being required to be
returned after a specified period or otherwise, and (iii) The
return of the money or commodity may be in cash, kind or
in the form of a specified service, with or without any benefit
in the form of interest, bonus, profit or in any other form.”
5.4.1 It was observed that specific exclusions are provided
in clauses (i) to (vii) of Section 2(c) of the MPID Act. The Court
highlighted that when the legislature mentioned in the
definition in Section 2(c) the word “means”, the definition
11
(2022) 9 SCC 457
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becomes exhaustive. It was pinpointed that Section 2(c) uses
the phrase “includes and shall be deemed to have always
included”. The Court further stated that the import of the
same creates a legal fiction and the use of the words
“includes” and “deemed to have always included” make the
term “deposit” inclusive and not restrictive.
5.4.2 Following was observed in 63 Moons Technologies
Ltd. (supra) regarding the expression “deposit”,
“The expression “deposit” is conspicuously broad in
its width and ambit for it includes, not only any
receipt of money but also the acceptance of any
valuable commodity by a financial establishment
under any scheme or arrangement. As a matter of
interest, we may note at this stage that the
expression “any” is used in the substantive part of
the definition of the expression “deposit” on five
occasions, namely:( i ) Any receipt of money; ( ii ) Any
valuable commodities; ( iii ) By any financial
establishment; ( iv ) With or without any benefit; and
( v ) In any other form.”
(Para 50)
5.4.3 In the same way, the Court in the very decision,
stated that the definition of “Financial Establishment” was
indicated to be referring to the acceptance of deposits under
any scheme or arrangement or “in any other manner”. The
repeated use of the expression “any” by the statute while
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defining both the above expressions namely “deposit” in
Section 2(c) and “Financial Establishment” in Section 2(d) is
a clear reflection of legislative intent to cast the net of the
regulatory provisions of the law in a broad and
comprehensive manner.
5.4.4 It was further observed that “unlike many other
State enactments which govern the field, clause (c) of
Section 2 of the MPID Act comprehends within the meaning
of “deposit” not only the receipt of money but any valuable
commodity as well”. The Court juxtaposed the definition in
Section 2(c) of the MPID Act with the definition of “deposit”
in the similar laws by the State of Tamil Nadu, State of
Orissa, State of Kerala, State of Himachal Pradesh, State of
Goa, State of Telangana, State of Andhra Pradesh and State
of Sikkim, which define the term “deposit” only in terms of
acceptance of money and not the acceptance of
commodities.
5.4.5 What is to be underlined is that the import of
“deposit” under Section 2(c) of the MPID Act is wide enough
so as to include the acceptance of money in any manner,
whatever may be the nomenclature. Similarly, the definition
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of “Financial Establishment” in Section 2(d) uses the group
of words “any person accepting deposit” and “in any other
manner” to spread its net or coverage.
6.
Reverting back to the facts of the instant case,
admittedly, the amount of Rs.2.51 crore was advanced by
the appellants to respondent Nos.2 to 6 with the promise for
repayment of the same with quarterly interest. The factum
of the transaction and the receipt of the amounts are not
disputed by respondent Nos.2 to 6. As could be easily
noticed from the definition of the term “deposit” in Section
2(c) of the MPID Act, reproduced above, the “deposit” is a
term with a wide amplitude. It encompasses “any receipt of
money to be returned after a specified period or otherwise
with or without benefit of interest”.
6.1 The definition of “deposit” has three facets in the
nature of ingredients. First is that there should be any
receipt of money or acceptance of a valuable commodity by
a financial establishment. On the second, the acceptance
contemplated should be returnable after a specified period
and thirdly, the return of such money or commodity could
be in cash, kind, with or without any benefit of interest. All
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the above necessary ingredients to constitute “deposit”
within the meaning of Section 2(c) of the MPID Act stands
satisfied in respect of the transaction between the appellants
and respondent Nos. 2 to 6.
6.2 Such “deposit” should be accepted by a “financial
establishment”. Looking to the wide import of the definition
of Section 2(d) of the Act, since it includes any person
accepting deposits, a private respondent like respondent
Nos.2 to 6 who accepted the money which was deposited
stand covered within the concept of “Financial
Establishment”. The individual persons like respondents
herein accepting the deposit and fraudulently defaulting
become a “Financial Establishment” within the definition of
Section 2(d) of the Act, and could be subjected to legal action
under the provisions of the MPID Act.
6.3 The contention that giving of amounts to respondent
Nos.2 to 6 was a transaction of “loan”, is a convenient
suggestion. Even if the transaction is named as “loan”, it
would not take it out of the scope of the term “deposit” as
defined. Nomenclature of the transaction is not relevant. It
is not the nomenclature but the ingredients or the basic
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attributes with which the transaction is informed and
characterised that would make and mould the transaction
to become “deposit” under Section 2(c) of the MPID Act.
Therefore, even if lending of money by the appellants to
respondent Nos.2 to 6 was to be treated and termed as
“loan”, it would remain a “deposit” in the nature of money
received by respondent Nos.2 to 6 who have the robes of
“financial establishment” as contemplated under Section
2(d) of the MPID Act.
6.4 It is true that the appellants filed proceedings before
the Court of learned Chief Judicial Magistrate, Nagpur
seeking registration of FIR against respondent Nos. 2 to 6
alleging the offences under Sections 420, 409 and 405 read
with Section 34, IPC, and that the appellants could not
succeed inasmuch as the courts held that no offence under
the IPC as alleged was made out. But then, the merits of the
aspect as to whether the lending of amount is “deposit”
within the meaning of MPID Act and whether the machinery
under Section 3 of the MPID Act could be set into motion
cannot take colour from the consideration that the criminal
offences under the IPC could not be made out.
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6.5 While the criminal proceedings in respect of the
offences under the IPC in their outcome operate in their own
sphere, the machinery under the MPID Act has a different
field to operate. Both are the different statutory regimes.
Merely because the offences under the IPC were not
established before the criminal court, it would not imply that
it becomes a kind of embargo against putting into motion
the provisions of the MPID Act or that the invocation of
provisions of the MPID Act is barred thereby.
6.6 It is not possible to take a view that the two areas of
remedies namely under the criminal law and by invoking the
provisions of the MPID Act, have the common aspects and
ingredients to follow, for, both operate in a distinct field and
in different ways. Non-making out of offences under the IPC
cannot be equated with non-applicability of the provisions
of MPID Act. The concepts thereunder have distinct and
separate legal connotations and a complaint under Section
3 of the MPID Act is an independent recourse under the
specific law.
6.7 The contention is therefore entirely misconceived
that having failed to establish the offences under the IPC,
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the complaint under Section 3 of the MPID Act could not be
maintained. In the same way, the plea that the dispute is of
civil nature bear no relevance, once it is found that the
transaction between the appellants and respondent Nos.2 to
6 satisfies the essentials of the definition under Section 2(c)
read with Section 2(d) of the MPID Act to become “deposit”,
accepted by “Financial Establishment” entitling the
appellants to file a complaint under Section 3 of the MPID
Act.
6.8 In light of the foregoing discussion and reasons,
there is no escape from the conclusion that the amounts lent
by the appellants to respondent Nos.2 to 6 were “deposit”
within the scope and ambit of the definition in Section 2(c)
of the Maharashtra Protection of Interest of Depositors (in
Financial Establishments) Act, 1999. Respondent Nos.2 to
6 as recipients of the amounts assume the character of a
“Financial Establishment” as defined in Section 2(d) of the
MPID Act.
7. The view taken by the High Court in dismissing
Criminal Revision Application No.64 of 2024 filed by the
appellants is wholly erroneous in law.
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8. The judgment and order dated 14.08.2025 passed in
the said Criminal Revision Application No.64 of 2024 and
the reasons supplied therein for rejecting the case of the
appellants are set aside.
9. The appellants are entitled to invoke Section 3 and
proceed under the MPID Act, to be further entitled to have
the remedies under the MPID Act for ventilation of their
grievance.
10. The appeal is accordingly allowed.
Any interlocutory application, as may be pending,
shall not survive in view of disposal of the main appeal.
……………………..,J.
[MANOJ MISRA]
……………………..,J.
[N.V. ANJARIA]
NEW DELHI;
MAY 15, 2026.
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