1.cri.wp.553.2024.judgment.odt (1) IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH : NAGPUR CRIMINAL WRIT PETITION NO.553 OF 2024 Umesh Shamrao Kumbhare, Aged about 52 Years, Occupation : Business, R/o. Om Sai Nagari, Wadala (Paiku), Chimur, Tahsil Chimur, District Chandrapur. .... PETITIONER // VERSUS // 1. State of Maharashtra, Principal Secretary, Home Ministry, Mumbai – 400 032. 2. District Collector, Chandrapur, District Chandrapur. 3. Sub Registrar, Registrar Office, Chimur, District Chandrapur. 4. State of Maharashtra, Through Economic Offence Wing, District Chandrapur. 5. State of Maharashtra, Through Police Station, Chimur, District Chandrapur. .... RESPONDENTS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Mr. R. Siddharth, Advocate with Mr. V. M. Vishwarupe, Advocate for petitioner. Mr. N. S. Rao, APP for respondent /State. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - CORAM : URMILA JOSHI-PHALKE AND RAJ D. WAKODE, JJ. DATE : 11/09/2026 ORAL JUDGMENT : [Per : URMILA JOSHI-PHALKE, J.] 2026:BHC-NAG:12361-DB 1.cri.wp.553.2024.judgment.odt (2) 1. Heard. 2. Rule. Rule made returnable forthwith. Taken up for final disposal with the consent of learned counsel for the parties. 3. By this petition, the petitioner has challenged the issuance of notification by respondent No.1 on 05.08.2024 in exercise of powers under Section 4 of the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 (hereinafter referred as ‘MPID’). 4. The petitioner was the then Secretary of Rashtrasant Tukdoji Nagari Pat Sanstha Ltd., Chimur and was amenable to the Banking Regulation Act and under the control of the Reserve Bank of India. The respondent No.4, merely on suspicion as per the allegation of the petitioner, while exercising his powers under Section 102 of the Code of Criminal Procedure (for short “Cr.P.C.”) seized the immovable properties of the petitioner and the others. The Investigating Officer further issued a communication cum order dated 24.05.2023 to the respondent No.3 Sub-Registrar, Chimur and directed not to alienate or create third party interest in respect of immovable properties. It is the contention of the petitioner that now, the investigation is completed and chargesheet is filed and the trial has already begun. It is further submitted that he is not an accused, but merely on suspicion, as he was the then Secretary of the 1.cri.wp.553.2024.judgment.odt (3) aforesaid Sanstha, the Investigating Officer seized the immovable properties of the petitioner. He further submitted that the properties which are seized at Serial Nos.1 to 3 are the self acquired properties, whereas the agricultural land at Serial No.4 is the joint property of the petitioner along with four others. Thus, all these immovable properties without having any allegation against the present petitioner of any misappropriation or forgery came to be attached. It is contended that the notification was issued without satisfying themselves by the authority and, therefore, it is bad in law. It is submitted that this Court has already considered this aspect in other two Criminal Writ Petitions bearing No.115/2024 [Mr. Milind s/o Dinkarrao Chimurkar vs. State of Maharashtra, Through Secretary, Ministry of Home Affairs, Mumbai] and Criminal Writ Petition No.609/2023 [Mrs. Asha w/o Dinkarrao Chimurkar vs. State of Maharashtra, Through Secretary, Ministry of Home Affairs, and another] dated 10.09.2026 and quashed and set aside the said notification. In view of that, the present writ petition deserves to be allowed. 5. Heard learned counsel for the petitioner. He reiterated the said contentions and submitted that considering the present petitioner was neither an accused nor there is an allegation of any misappropriation against him, then also by exercise the 1.cri.wp.553.2024.judgment.odt (4) powers under Section 102 of the Cr.P.C. the properties came to be attached without assigning any reason and, therefore, the communication by the Investigating Officer dated 24.05.2023 as well as the notification issued by the Principal Secretary to the Home Department is without recording any satisfaction. 6. Per contra, learned APP strongly opposed the said contention and submitted that on the basis of the complaint of the depositors and crime registered, the State Government was satisfied that the misappropriation of the amount was in the said financial institution and, therefore, to protect the interests of the depositors by recording its satisfaction that there are reasons to believe that the properties specified in the notification have been acquired by the persons from and out of deposits collected by the depositors by exercising the powers conferred by sub-section (1) of Section 4 of the MPID Act. He submitted that considering the fact that the petitioner was the then Secretary of the said financial institution and, therefore, the said properties came to be attached. 7. We have given due consideration to the submissions made by learned counsel for the petitioner as well as learned APP. As far as factual aspect is concerned, it is undisputed that the petitioner is not an accused in the Crime bearing No.319/2022 registered at Chimur Police Station. He submitted 1.cri.wp.553.2024.judgment.odt (5) that entire investigation is completed and the entire chargesheet nowhere discloses any role played by the present petitioner, despite of the said fact, the property of the present petitioner came to be attached without recording any satisfaction. 8. Considering the submissions made by the learned counsel, now the question remains whether notification issued on 05.08.2024 is in view the mandate of Sections 3 and 4 of the MPID Act. 9. Before adverting to the issue involved in the petition, it is necessary to refer Section 3 of the MPID Act which is reproduced as under:- Section 3 - Fraudulent default by Financial Establishment. Any Financial Establishment, which fraudulently defaults any repayment of deposit on maturity along with 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 defaults in repayment of such deposit with such benefits in the form of interest, bonus, profit or any other form as 1.cri.wp.553.2024.judgment.odt (6) 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 deployment of money or assets acquired out of deposits in such a 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. 10. 10. Section 4 of the said Act deals with attachments of properties on default of return of deposits which is also reproduced as under:- “Section 4 - Attachment of properties on default of return of deposits:-(1) Notwithstanding anything contained in any other law for the time being in force- (i) where upon complaints received from the depositors or otherwise, the Government is satisfied that any Financial Establishment has failed,- (a) to return the deposit after maturity or on demand by the depositor; or (b) to pay interest or other assured benefit; or (c) to provide the service promised against such deposit; or (ii) where the Government has reason to believe that any Financial Establishment is acting in the calculated manner detrimental to the interests of the depositors with an intention to defraud them; and if the Government is satisfied that such Financial Establishment is not likely to return the deposits or make payment of interest or other benefits assured 1.cri.wp.553.2024.judgment.odt (7) or to provide the service against which the deposit is received, the Government may, in order to protect the interest or depositors of such Financial Establishment, after recording reasons in writing, issue an order by publishing it in the Official Gazette, attaching the money or the property believed to have been acquired by such Financial Establishment, either in its own name or in the name of any other person from out of deposits, collected by the Financial Establishment, or if it transpires that such money or other property is not available for attachment or not sufficient for repayment of the deposits, such other property or the said Financial Establishment or the promoter, director, partner or manager or member of the said Financial Establishment as the Government may think fit. (2) On the publication of the order under Sub- section (1), all the properties and assets of the Financial Establishment and the persons mentioned therein shall forthwith vest in the Competent Authority appointed by the government, pending further order from the Designated Court. (3) The Collector of a District shall be competent to receive the complaints from his District under sub- section (1) and he shall forward the same together with his report to the Government at the earliest and shall send a copy of the compliant also to the concerned District Police Superintendent or Commissioner of Police, as the case may be, for investigation. 11. On plain reading of Section 4 (1) of the MPID Act, which mandates recording of the reasons in writing regarding the material on the basis of which the authority has believed that the property has acquired so. On perusal of the notification in first paragraph the description of the financial institute is mentioned. 1.cri.wp.553.2024.judgment.odt (8) In second paragraph it is mentioned as “offence has been registered against the said financial establishment and its Chairman, Promoters, Partners, Directors, Managers, Members of Chimur Police Station vide complaint registered No.319/2022 for the offence punishable under Sections 406, 408, 409, 420, 465, 467, 468, 471, 477A, 120B, 201 and read with Section 34 of the Indian Penal Code and Section 3 of the MPID Act (Maharashtra XVI of 2000), and they have collected the deposits and failed to repay the deposits after maturity.” 12. In paragraph No.3 it is only mentioned “the Government of Maharashtra is satisfied that the said Financial Establishment and its Chairman, Promoters, Directors, Managers, Partners, and Members have failed to repay the deposits on demand by the depositors and the said Financial Establishment are not likely to repay the deposits to the depositors.” 13. Now, question arises as to whether there was application of mind and satisfaction of the authorities before issuance of notification under Section 4 of the MPID Act. 14. The scheme of the Act indicates that the competent authority on having satisfied that any property believed to have been acquired by such financial establishment can attach the same under Section 4 of the Act. Here in the present case, 1.cri.wp.553.2024.judgment.odt (9) admittedly, some of the properties are acquired of the petitioner who is not an accused. The entire chargesheet nowhere discloses that the present petitioner is an accused and in any way involved in the commission of the crime and as such, on the face of it, there is no satisfaction recorded why these properties of the petitioner are included in the notification. There is no reason recorded to show that there is any reason to believe that the properties have been acquired by the petitioner or by such financial establishment out of the deposits collected by it. Thus, as far as this aspect is concerned, there is no satisfaction recorded by the competent authority. Section 4 of the MPID Act can be divided in two different parts (i) attaching money or other property on believing that it has been acquired by such financial establishment or if it transpires that such money or other properties is not available for attachment or not sufficient for payment of deposits, such other properties of the financial establishment of promoters, directors etc. may be attached. Thus, Section 4 of the MPID Act permits attachment of properties acquired from or out of deposits, collected by Financial Establishment. So, if there is reason to believe that, properties are acquired from such deposits, therefore, no difficulty to confirm the said attachment. However, in order to apply second part of the provision, it must transpires that such money or property which is acquired from deposits is not available or not 1.cri.wp.553.2024.judgment.odt (10) sufficient and it is only then other properties even Financial Establishment could be attached under the said provision. Thus, every word used by the legislature must be given due weightage as legislature is expected not to use any word without reason. Thus, in case there is need to attach the properties even of financial establishment, which are not acquired from deposits in question, it must transpires that such money or properties from deposits are not available or not sufficient and then the other properties could be attached. Therefore, the satisfaction is required to be recorded. 15. Learned APP placed reliance on the decision of Hon’ble Apex Court in the case of Smt. Shalini Soni and others vs. Union of India and others, even in the said judgment it is observed by the Hon’ble Apex Court that it is an unwritten rule of the law, constitutional and administrative, that whenever a decision making function is entrusted to the subjective satisfaction of a statutory functionary, there is an implicit obligation to apply his mind to pertinent and proximate matters only, eschewing the irrelevant and the remote. Where there is further an express statutory obligation to communicate not merely the decision but the grounds on which the decision is founded, it is a necessary corollary that the grounds communicated, that is, the grounds so made known, should be 1.cri.wp.553.2024.judgment.odt (11) seen to pertinent and proximate matters and should comprise all the constituent facts and materials that went in to make up the mind of the statutory functionary and not merely the inferential conclusions. 16. Even in the case of Amarendra Kumar Pandey vs. Union of India and ors referred supra relied upon by the learned APP wherein also it is held that the doctrine of reasonableness thus may be invoked. Where there are no reasonable grounds for the formation of the authority’s opinion, judicial review in such a case is permissible. It is further held that there is in effect no evidence whatsoever to form or support the opinion. The distinction between insufficiency or inadequacy of evidence and no evidence must of course be borne in mind. 17. Learned counsel for the petitioner rightly submitted that when section requires the satisfaction it means the authority has to record the satisfaction. He submitted that in the case of N.Nagendra Rao and Company vs. State of Andhra Pradesh referred supra wherein the Apex Court specifically observed that when a statute gives a power and requires the authority to exercise it in public interest then the person exercising the power must be vigilant and should take it as a duty to discharge the obligation in such a manner that the object of the enactment is carried into effect. The purpose of sub- 1.cri.wp.553.2024.judgment.odt (12) section (2) is for protecting the goods seized by the Collector whether they are eatables or they are foodstuffs or they are iron and steel, as, if they are spoilt or they deteriorate then it is a loss not only to the owner but to the society. 18. Thus, consistent view is that if the provision requires the satisfaction is to be recorded then it has to be recorded. Then only the purpose of the provision would be satisfied. Now question is what is the subjective satisfaction? What is a meaning of it? As per the Concise Oxford Dictionary subjective means a mental constitution, view or feeling or mode of behaviour peculiar to a person. In the case of Lalit Rajkhowa vs. State of Assam and Ors., reported in MANU/GH/0051/1983, wherein the Gauhati High Court express that “the term "subjective" means pertaining or relating to the subject, namely, the detaining authority. The term satisfaction relates to the "thinking" of the detaining authority. The term has a reference to the mental element of the subject, i.e., the desires or feelings of the detaining authority. In a wider sense the term "satisfaction" may include "pleasure". However, in the context in which the term "satisfaction" has been used indicates that there must be a state of mind which has satisfied or contented occasioned by some facts, events or state of things." 1.cri.wp.553.2024.judgment.odt (13) 19. Bearing in mind the above dictionary meaning of "subjective satisfaction" it means that 'satisfying oneself.’ Accordingly, the subjective satisfaction means in the first instance, the personal satisfaction of the concerned authority himself only and none else and as a necessary corollary thereof, therefore it cannot be tested or set aside on the objective test. It is not expected that the authority necessarily record the detailed reasons but at least it should reflect that he formed the opinion on the basis of the material produced before him and perused and thereafter on the basis of the same, on being subjectively satisfied regarding the same, issued the notification. Thus, it is the mandate of sub-section (1) of Section 4 that the subjective satisfaction is the sine qua non for issuance of such notification. 20. In this backdrop, now admittedly, the respondent No.1 on perusal of the said notification only states that the Government of Maharashtra subjectively satisfied that the said government establishment and its office bearers is not likely to return the deposits to the depositors and hence, the government has to protect the interests of the depositors. But no subjective satisfaction or reason to believe is recorded by the authority. The said notification clearly indicates that it nowhere reflects the material which was considered in order to hold that on satisfying the first part of Section 4 that the financial establishment has failed to 1.cri.wp.553.2024.judgment.odt (14) return the deposits after maturity or on demand by the depositors or failed to pay the interests or other assured benefits or to provide the services promised against such deposits. Thus, there is no satisfaction recorded as far as section 4(1)(i) is concerned. 21. The second part of section 4 of the MPID Act deals with the government has reason to believe that thus, as far as the reason to believe is concerned, the expression reasons to believe is not synonymous with subjective satisfaction. The believe must be held in good faith. The Hon’ble Apex Court in the case of Joti Parsad vs. State of Haryana referred supra explained the term reason to believe in view of Section 26 of IPC which reads as under :- “26. ‘Reason to believe’.- A person is said to have ‘reason to believe’ a thing, if he has sufficient cause to believe that thing but not otherwise.” The Apex Court explains that what it means is that a person must have reason to believe if the circumstances are such that a reasonable man would, by probable reasoning, conclude or infer regarding the nature of the thing concerned. Such circumstances need not necessarily be capable of absolute conviction or inference; but it is sufficient if the circumstances are such creating a cause to believe by chain of probable reasoning leading to the conclusion or inference about the nature of the thing. These two requirements i.e. “knowledge” and “reason to believe” have to be deduced from various circumstances in the case.” 1.cri.wp.553.2024.judgment.odt (15) 22. Thus, it is a trite law that whenever statute provides for “reason to believe” either the reason should appear on the face of the notice or they must be available on the material which had been placed before him. Thus, as discussed above it was not open for any other authority only to say that on subjective satisfaction but the said satisfaction should reflect as far as compliance of Section 4(1)(i) is concerned. Similarly, to comply subclause (ii) of sub-section (1) of Section 4 the requirement of law is that the reason to believe should reflect on the face of the record or it must be deduced from the materials which has been placed before the authority. 23. The impugned notification does not reflect these aspects and more particularly, the satisfaction that there is any evidence on record to show that there are no other properties available for attachment and hence the properties in question would be attached. There is no satisfaction recorded that why the attachment of the properties of the present petitioner, who is not an accused are attached and there is reason to believe that such financial establishment is not likely to return the deposits or make payments of interests or other benefits assured or to provide service against which deposits is received. Thus, the requirement of law that whenever statute provides to record satisfaction or reason to believe which should appear on the face 1.cri.wp.553.2024.judgment.odt (16) of the notice or it must be available on the materials which had placed before him should be reflected from the said notification is absent in the present case and, therefore, the impugned notification deserves to be quashed and set aside. Similarly, the communication which is issued on the basis of the said Notification dated 24.05.2023, is also requires to be quashed and set aside. 24. In view of the above, as the notification is issued without recording a subjective satisfaction under Section 4 which mandates recording of the reasons in writing and, therefore, the said notification deserves to be quashed and set aside. Similarly, the communication dated 24.05.2023, which is merely on the basis of the notification, deserves to be quashed and set aside. In view of that, we proceed to pass following order: ORDER (i) The Writ Petition is allowed. (ii) The Notification dated 05.08.2024 issued by respondent No.1 is hereby quashed and set aside and the communication dated 24.05.2023 is hereby quashed and set aside. (iii) We grant a liberty to the authority to take necessary steps if they desire within eight weeks from today. (iv) We also direct the petitioner not to create any third party interest for eight weeks in respect of the 1.cri.wp.553.2024.judgment.odt (17) properties which are subject matter of the impugned notification. 25. With these observations, the Writ Petitions is disposed of. 26. Rule is made absolute in the above said terms. 27. Pending applications, if any, stand disposed of. (RAJ D. WAKODE, J) (URMILA JOSHI-PHALKE, J) Sarkate. Signed by: Mr. A.R. Sarkate Designation: PA To Honourable Judge Date: 17/09/2026 15:34:56