- In the State of Maharashtra vs. 63 Moons Technologies Ltd (2022), Justices DY Chandrachud, Surya Kant, and Bela M Trivedi upheld the attachment of 63 Moons Technologies' properties while dismissing a contest to the constitutionality of the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act 1999.
- In this case, a petition was filed claiming that the divestment of a property's title through a summary procedure under Section 7 is arbitrary. Furthermore, it was argued that Section 4 of the MPID Act is arbitrary and unconstitutional and is overly extensive in nature because:
- Subsection (1) of Section demands the attachment of property of the 'promoter, director, partner, manager, or member of the said Financial Establishment.
- Subsection (2) of Section divests the title of the attached properties without due process of law.
- The Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 is an act of the Maharashtra state legislature that protects the interests of Maharashtra state depositors in financial establishments and things related to it.
- Section 4 of the MPID Act states that the government should have first attached and liquidated the assets obtained from the deposits, and only after doing so if there was a budget deficit in repaying the alleged investors, the assets of any other person, including the petitioner, should have been attached.
- In KK Bhaskaran v. State (2011) 3 SCC 793, the SC ruled that the Tamil Nadu Protection of Depositors' Interests (in Financial Establishments) Act 199724 is legally valid.
- In another relevant case, State of Maharashtra v. Vijay C. Puljal (2012) 10 SCC 599, the legitimacy of the MPID Act was particularly addressed. Furthermore, in light of the prior judgment in Bhaskaran, the Court maintained the constitutional validity of the MPID Act (supra). Sonal Hemant Joshi v. the State of Maharashtra, (2012) 10 SCC 601, held the same.
- In another notable case, Soma Suresh Kumar v. Government of Andhra Pradesh 41, the Court affirmed the terms of the Andhra Pradesh Protection of Depositors of Financial Establishments Act 1999 following the earlier decisions in Bhaskaran (supra) and New Horizons Sugar Mills Limited (supra).
- After hearing the parties' contentions and referring to the aforementioned cases, the Hon'ble SC held that the Tamil Nadu enactment did not violate the requirements of Articles 14, 19(1)(g) or 21 of the Constitution. Furthermore, it was noted that the constitutional validity of state legislation governing financial establishments offering deposit schemes, including the MPID Act, had already been addressed in State of Maharashtra v. Vijay C. Puljal and Sonal Hemant Joshi v. the State of Maharashtra, so there was no reason for the Court to review the same.
- Therefore, while overturning the Bombay High Court's judgment releasing 63 Moons Technologies' assets, the Hon'ble SC found that the MPID Act is legally legitimate based on legislative competence and when examined against the requirements of Part III of the Constitution.
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