Mumbai Court Quashes Attachment of CA’s Flat, Says EOW Failed to Establish Money Trail

The Special Court, Mumbai for Maharashtra Protection of Interest of Depositors Act (MPID) quashed the attachment of a residential flat belonging to a Chartered Accountant and held that the Economic Offence Wing (EOW) failed to establish money trail. The court found that the Economic Offences Wing failed to establish any money trail linking the applicant to the alleged deposit-related offence and categorically noted that the attached flat had been purchased by the applicant’s father decades before the NSEL scam occurred. Holding that ancestral and untainted property cannot be attached in the absence of proof that it was acquired from depositors’ funds, the Special Court ordered release of the flat, bringing an end to the unwarranted proceedings against the applicant. The applicant, a CA by profession, had served only as a non-executive director for a brief period of three months in a company that was a member of the National Spot Exchange, yet was subjected to attachment proceedings causing undue hardship. The applicant contended that the flat stood in the name of his late father since 1989, as confirmed by cooperative society records. He was only an independent director of Aastha Minmet India Pvt. Ltd. for a brief period from 14 March 2013 to 1 July 2013. He was not involved in the management or day-to-day affairs of the company, never attended board meetings, was not an authorised signatory to bank accounts, and received no remuneration or professional fees. There was no money trail linking him or the said flat to the deposits allegedly collected by the company. It was also pointed out that the deceased father had left behind several legal heirs, and therefore the applicant was not the exclusive owner of the property. The State of Maharashtra, represented by the Economic Offences Wing (EOW), opposed the application, arguing that the applicant was a director of the company during the period when the alleged offence took place and that the company’s total liability was stated to be ₹243.07 crore. However, during evidence, the Competent Authority admitted that the flat was purchased by the applicant’s father in 1989. The society had confirmed that the flat continued to stand in the father’s name. No specific inquiry had been conducted to establish the tenure-wise role of the applicant or any direct money trail to him. The principal legal issue before the court was whether a property belonging to a director or his family could be attached under Section 4 of the MPID Act without establishing that it was acquired from, or represented, proceeds of deposits collected by the financial establishment. The court held that attachment under the MPID Act requires a clear nexus or money trail between the deposits collected by the financial establishment and the property sought to be attached. Legitimate, untainted, or ancestral properties cannot be attached merely because the owner is a promoter or director, in the absence of evidence that the property was acquired from depositors’ money or represents its equivalent value. The court noted that there was no iota of evidence showing any transfer of funds from Aastha Minmet India Pvt. Ltd. to the applicant. It further observed that the alleged scam occurred years after the death of the property’s original owner. Allowing the application, the MPID Court held that the Mulund flat had no connection with the NSEL scam. The applicant was not the exclusive owner of the property, as other legal heirs had an interest. The attachment was therefore unsustainable in law. Accordingly, the court ordered that Flat No. B-504, Ambika Apartment, Mulund (East) be released from attachment, and disposed of the application. Case Details Case Title: Mr. Pradip Khetshi Shah Versus State of Maharashtra Case No.: Misc Application No. 1209 of 2023 Date: 15/12/2025 Counsel For Applicant: Ishaan Patkar Counsel For Respondent: Vagish Mishra Click Here To Read Order Read More: Eicher Motors’ Arm VECV Challenges ₹192 Crore GST Demand Over Credit Note Reporting Delay

Mumbai Court Quashes Attachment of CA’s Flat, Says EOW Failed to Establish Money Trail

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Mumbai Court Quashes Attachment of CA’s Flat, Says EOW Failed to Establish Money Trail

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