CM Fadnavis Announces MPID Act Changes: 6-Month Absolute Property Rule for Investor Compensation

Maharashtra Chief Minister Devendra Fadnavis on Tuesday announced that the state government has proposed amendments to the Maharashtra Protection of Interest of Depositors (MPID) Act, 1999 to ensure faster recovery of investor funds and provide a more punitive mechanism against defaulters. The changes aim to streamline legal procedures and reduce delays in attaching and auctioning properties linked to financial scams.

Under the proposed amendments, the Designated Court will be required to decide on making a property attachment “absolute” within 180 days of the initial application. The amendment also restricts routine adjournments, allowing only two adjournments unless exceptional circumstances are demonstrated, with heavy costs imposed for frivolous delays. This ensures that justice for depositors is not held up for the convenience of the accused.

CM Fadnavis highlighted that the amendments address a long-standing problem where properties remain “attached on paper” but cannot be auctioned due to ongoing legal proceedings. Once an attachment is made absolute, the state can begin the auction process immediately, and proceeds can be distributed to investors even while the criminal trial continues.

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The announcement comes in response to concerns raised during Question Hour regarding the Srirampur scams, where multi-crore credit society frauds have left thousands of small depositors waiting for years. Minister of State for Home, Yogesh Kadam, noted that these cases will be among the first to benefit from the new six-month absolute property rule. He explained that the amendments will also allow aggressive attachment of “benami” properties transferred to family members or associates of accused directors.

To facilitate fair recoveries, the government plans to dispatch special evaluation teams to Srirampur to re-value seized lands and buildings according to 2026 market rates, maximising refunds for cheated depositors. Minister Kadam emphasised that the amendments would bridge the gap between legal attachment and physical possession, accelerating the auction and recovery process.

The move is intended to strengthen the state’s ability to act decisively in financial fraud cases, providing depositors with timely restitution and discouraging prolonged legal delays that have historically hampered recovery efforts under the MPID Act.

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