Alka Agrawal vs State Of Maharashtra

2026 INSC 489 REPORTABLE

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

JUDGMENT

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

Judicature at Bombay, Nagpur Bench, Nagpur1, 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

Signature Not Verified given by the appellants to respondent Nos.2 to 6 are covered Digitally signed by MINI Date: 2026.05.15 15:07:54 IST Reason: 1 Hereinafter, “High Court”.

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 1 of 28 within the ambit of concept of “deposit” as defined under

Section 2(c) of the Maharashtra Protection of Interest of

Depositors (in Financial Establishments) Act, 19992.

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”.

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 2 of 28 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

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 3 of 28 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

Section 138 of the Negotiable Instruments Act, 18813.

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

register the First Information Report4 against respondent

3 Hereinafter, “NI Act”.

4 Hereinafter, “FIR”.

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 4 of 28 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,

Indian Penal Code, 18605.

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”.

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 5 of 28 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

156(3) of the Code of Criminal Procedure, 19736 praying for

registration of an FIR against respondents under Section 3

of the MPID Act. The said Criminal Miscellaneous

6 Hereinafter, “CrPC”.

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 6 of 28 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

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 7 of 28 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”

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 8 of 28 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.

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 9 of 28 (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

Others7, G. Sagar Suri and Another vs. State of

U.P. and Others8, Shailesh Kumar Singh alias

Shailesh R. Singh vs. State of Uttar Pradesh and

Others9 and Anukul Singh vs. State of Uttar

Pradesh and Another10 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

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 10 of 28 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

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 11 of 28 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

President on 20th January 2000 and published in the

Maharashtra Government Gazette, Part IV, dated 21st

January 2000, was enacted with a view to protect the

interests of depositors in the financial establishments and

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 12 of 28 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.”

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 13 of 28 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.

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 14 of 28 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

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 15 of 28 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

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 16 of 28

(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,— …………..

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 17 of 28

(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.

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 18 of 28 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

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 19 of 28 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

Technologies Ltd.11 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

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 20 of 28 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

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 21 of 28 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

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 22 of 28 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

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 23 of 28 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

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 24 of 28 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.

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 25 of 28 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,

Criminal Appeal @ SLP (Crl.) No. 19305 of 2025 Page 26 of 28 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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