HC upholds use of MPID Act in case against builder

The Bombay high court (HC) has upheld application of provisions of the Maharashtra Protection of Interest of Depositors (MPID) (In Financial Establishments) Act,

The Bombay high court (HC) has upheld application of provisions of the Maharashtra Protection of Interest of Depositors (MPID) (In Financial Establishments) Act, 1999, against an Amravati-based developer who failed to handover flats to buyers and did not repay the money received from them.

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A division bench of justice Sunil Shukre and justice Madhav Jamdar said the MPID Act is enacted to protect the interest of depositors and the term ‘deposit’ as defined by section 2(c) includes any receipt of money by any financial establishment and is to be returned after a specified period either in cash, kind or form of specified service.

The bench therefore upheld the application of provisions of the MPID Act to a case of cheating registered against Rana Landmarks Private Limited and attached his properties for recovery dues owed to flat buyers.

Police said the developer had allegedly duped 514 flat buyers to the tune of ₹13.88 crore as the company had failed to hand over flats.

The owners of the land, where the project was being developed, had approached HC after the special MPID court on September 21, 2018, attached the plot admeasuring over 5 hectares, for recovery of dues meant for flat buyers. The HC rejected the land owners’ plea. “It is clear that the purchase of flats... is covered under the definition of the term ‘deposit’ under the MPID Act,” the bench said.