Mohd Mansoor Khan, promoter of the I-Monetary Advisory (IMA) group of companies and prime accused in the IMA scam, has moved the Karnataka High Court, questioning a special court’s order to sell one of his apartments to him. The attachment was confirmed.
Justice Alok Aradhe and Justice S. Vishwajit Shetty, before which the appeal came up for hearing, ordered the issue of notice to the state government and the competent authority (CA) appointed for the IMA scam case under Karnataka Protection of Interest. Depositors in Financial Establishments (KPIFFE) Act, 2004.
An apartment located on Bannerghatta Road layout in Tilaknagar, Bengaluru, which was bought by Khan in 2014, was among several other immovable properties and bank accounts, the attachment of which was confirmed by the special court set up for KPIDFE cases in its order . 7 March 2022.
The special court had also directed the CA to sell the immovable properties to recover the money to be paid back to the depositors. Besides this, the special court had also directed the CA to transfer the amount deposited in certain bank accounts and bank deposit accounts of IMA to the account of the CA for disbursing the amount to the depositors.
‘No Deposit’
Among other grounds, it has been argued in the appeal that the Special Court has failed to appreciate the contention of IMA and its promoter that the investments made do not fall under the definition of “deposit” as defined under the KPIDFE Act.
Investments made by way of capital contribution in firms are specifically excluded from the definition of “deposits” under the KPIDFE Act as most of the entities that are part of the IMA Group are Limited Liability Partnership Firms (LLPs) and all investors brought in Were these firms to be ‘invested’ in funds by way of ‘capital contribution’ and the said amount is ‘invested’ in various sectors, the appeal claimed that the KPIDFE Act is not applicable to the IMA Group.
The government has not even made any effort to know the relationship between the investors and the institution in which they have invested. Since the investment was made for capital contribution, there is no application of the provisions of the KPIDFE Act, which is opposed in the appeal.
Challenging the notification of attachment of properties by the State Government, it has been contended in the appeal that the property in Tilaknagar was purchased by Khan out of his personal income and profits earned from his business enterprises in accordance with the law, and ca had failed To show that the property was purchased from the “deposits” of the general public.