March 19, 2024 – Mumbai: The City Civil and Sessions Court of Mumbai has rejected the bail application of businessman Kinner Kanu Nayak, accused of orchestrating a large-scale investment fraud involving over Rs. 30 crore. The decision was handed down by Hon’ble Judge Aditee Uday Kadam in response to Bail Application No. 105 of 2024 filed under Section 439 of the Code of Criminal Procedure.
The Case Against Nayak
Nayak, 54, a resident of Poonam Heights, JVPD, Vile Parle, Mumbai, is accused of defrauding investors by promising substantial returns on real estate investments. The case against him, C.R. No. 157 of 2022, registered with the Economic Offences Wing (EOW), Mumbai (earlier C.R. No. 1260 of 2022 at Santacruz Police Station), alleges that he collected Rs. 30,35,22,667 from the late Amjad Ahmed Shaikh, father of informant Arif Shaikh, under the pretense of investing in the Gowardhangiri CHS project.
According to the prosecution, Nayak had assured Amjad Shaikh of 35 flats as returns on his investment. However, neither the promised flats nor the invested amount was returned. Following Shaikh’s demise on August 13, 2016, his sons persistently pursued Nayak for repayment, but he allegedly evaded them, falsely claiming that their father was a partner in the failed project and thus shared the financial losses. The informant maintains that his father was an investor expecting profits, not a business partner.
Legal Arguments and Court Proceedings
Representing Nayak, Advocate Harshad Bhadbhade, along with Advocates Shagufa Patel and Nikita Mandaniyan, argued that their client was an innocent businessman who had genuinely attempted to execute the real estate project. They claimed that due to unforeseen circumstances, the project could not be completed, leading to losses for all involved, including the investors. The defense highlighted the delayed lodging of the complaint, suggesting it was an afterthought prompted by other investors’ legal actions. Nayak has been in custody due to similar cases filed by other investors and flat purchasers.
Special Public Prosecutor (SPP) Seema Deshpande, appearing for the State, strongly opposed the bail plea, asserting that Nayak had deliberately defrauded investors. She emphasized that Nayak, as the Director of the financial entity, collected vast sums without formal agreements, even after Shaikh’s demise. Investigations revealed that he owned 12 immovable properties, which he acquired using funds from investors, yet he failed to return any money. The prosecution insisted that Nayak’s actions demonstrated a clear intent to deceive investors and that he had orchestrated a massive financial scam.
Court’s Observations and Ruling
After reviewing the case, the court determined that Nayak had not provided any documentary evidence proving Shaikh was a business partner in the project. Conversely, the investigation indicated that Nayak had diverted investor funds for personal property acquisitions. The court noted the seriousness of the economic offenses and the impact of financial fraud on public interest.
Judge Kadam cited legal precedent, emphasizing that economic offenses involving deep-rooted conspiracies and substantial financial losses must be treated with gravity. She also pointed out that the case against Nayak was not purely document-based but involved a complex financial investigation, and that the charge sheet had yet to be filed.
Given the gravity of the accusations, the ongoing investigation, and Nayak’s involvement in multiple similar fraud cases, the court denied his bail plea. The order concluded that Nayak’s conduct, modus operandi, and potential risk of further fraudulent activities necessitated his continued detention.
Conclusion
The rejection of Nayak’s bail plea underscores the judiciary’s firm stance against economic offenses that undermine public trust and financial stability. With the investigation still underway, authorities are expected to intensify efforts to recover misappropriated funds and deliver justice to the defrauded investors.
As the case progresses, further developments may shed light on the full extent of Nayak’s financial dealings and their impact on investors. Meanwhile, the court’s decision serves as a stern warning against fraudulent business practices in the real estate sector.