Bill to expedite disposal of attached properties cleared by Maha assembly

MUMBAI: The Maharashtra legislative assembly has passed a bill to amend the Maharashtra Protection of Interest of Depositors (Financial Establishments) Act to expedite the disposal of attached properties to facilitate the recovery of money in financial scams

MUMBAI: The Maharashtra legislative assembly has passed a bill to amend the Maharashtra Protection of Interest of Depositors (Financial Establishments) Act to expedite the disposal of attached properties to facilitate the recovery of money in financial scams. The bill also proposes to bring scams involving cryptocurrency and blockchain-based digital instruments within its framework. It is yet to be tabled in the legislative council.

The bill to amend the MPID Act was passed in the assembly on Wednesday. It proposes that appellants deposit 50% of the fraud amount with the authorities before filing an appeal against the attachment of properties belonging to financial institutions. It also limits the number of adjournments to two, with a third adjournment allowed only under exceptional circumstances, to ensure time-bound disposal of cases.

MPIDA deals with fraud in financial institutions and provides for the auction of properties owned by such institutions and their directors. Currently, more than ₹38,000 crore of investors’ money is stuck due to embezzlement and other types of fraud in credit societies and other financial institutions, the government told the assembly.

Minister of state for home Yogesh Kadam, who tabled the bill, said that when the government initiates the process to attach the assets of institutions to recover defrauded sums through auction, the accused often file appeals.

“The appeals continue for years, in some cases even for a decade, leaving investors in the lurch. The value of the attached assets declines over time, defeating the very purpose of the recovery process. To prevent such delays, we are restricting adjournments. The condition of depositing 50% of the defrauded amount will also discourage appeals in such cases,” he told the House.

Kadam also said the amendment would bring financial frauds, unauthorised deposit schemes and investor deception involving cryptocurrency and blockchain-based digital instruments within the ambit of the act. “Such virtual digital assets are not included in the definition of the term ‘deposit’ under Section 2(c). The amendment brings these virtual digital assets within the purview of the Act,” states the statement of objects and reasons of the bill.

“Once these amendments are implemented, we expect investors to receive their funds that have been stuck in less than a year,” he said. He also said the government would strengthen the financial intelligence units at police stations.