Mumbai, November 6, 2023 – The Designated Court under the Maharashtra Protection of Interest of Depositors (MPID) Act, at the City Civil & Sessions Court, Mumbai, granted bail to Kamlesh Rajendra Kumar Mehta, a 45-year-old businessman, in connection with C.R. No. 692 of 2021 registered at D. N. Nagar Police Station. Mehta was accused of offenses punishable under Sections 406 (criminal breach of trust), 420 (cheating) r/w Section 34 (acts done by several persons in furtherance of common intention) of the Indian Penal Code (IPC), and Sections 3 and 4 of the MPID Act. The order was passed by His Honour Judge Shri S. B. Joshi (Court Room no. 7) in Bail Application No. 933 of 2023.

The prosecution’s case alleged that Mehta and his wife induced the first informant and other investors to invest in a gold scheme with the promise of high returns (36% interest). The informant claimed to have invested ₹1,19,00,000/- between April and June 2019 but neither received the promised interest nor the principal amount.

Mehta, in his bail application, claimed false implication, stating that he had always returned the money invested. He alleged that the complainant had agreed to provide a housing loan but failed to do so after receiving post-dated cheques and promissory notes, which were supposedly later cancelled. Mehta also pointed out that his wife, a co-accused, had been granted Anticipatory Bail by the Bombay High Court. He argued that the filing of the charge sheet constituted a change in circumstances and that he was entitled to bail on parity and due to the lack of prima facie evidence. He also contended that the provisions of the MPID Act were not applicable and that his bank accounts were frozen and immovable properties attached during the investigation.

The prosecution, represented by Ld. SPP Seema Deshpande, opposed the application, stating that the total fraud amounted to ₹3,09,50,000/- affecting the complainant and other investors. While acknowledging the attachment of Mehta’s properties valued at ₹3,25,80,378/-, the prosecution highlighted outstanding loans of ₹3,98,81,739/- on these properties, with banks initiating possession proceedings under the SARFAESI Act. The prosecution also stated that further investigation under Section 173(8) of the Cr.P.C. was in progress regarding bank accounts, lockers, and other properties.

Ld. Advocate Pankaj D. Jain for the applicant argued that the filing of the charge sheet was a significant change in circumstances, warranting consideration of bail on merits. He relied on Pankaj Bansal Vs. Union of India & Ors. and Ramesh Kumar Vs. The State of NCT of Delhi.

The Ld. SPP countered that the ongoing investigation under Section 173(8) Cr.P.C. and the encumbered nature of the attached properties negated the grounds for bail.

The Ld. Counsel for the Intervenor argued against bail, citing ample evidence in the charge sheet and Mehta’s alleged non-compliance with High Court directions during his anticipatory bail application. He also stated that the wife’s anticipatory bail was not a ground for the present application and that there were insufficient assets to satisfy the victims.

The court, after considering the rival contentions and facts, framed the key point for determination as whether Mehta was entitled to bail under Section 439 Cr.P.C.

Referring to the principles laid down in Sanjay Chandra V/s. CBI, the court emphasized that bail jurisdiction should be exercised based on well-settled principles, considering the nature of accusations, evidence, severity of punishment, the accused’s character, possibility of securing their presence at trial, apprehension of witness tampering, public interest, and other similar considerations. The court noted that “reasonable grounds for believing” in guilt, not proof beyond reasonable doubt, is sufficient at the bail stage.

In the present case, the court acknowledged that the investigation against Mehta was over, and the charge sheet had been filed. While the misappropriated amount was significant, the filing of the charge sheet itself was considered a substantial change in circumstances, necessitating a consideration of bail on merits. The court noted the numerous witnesses against Mehta in the charge sheet but also pointed out the outstanding loans and potential possession of his properties under the SARFAESI Act. The ongoing investigation under Section 173(8) Cr.P.C. was also noted, with the court stating that the prosecution retained the right to proceed against any further properties found.

Crucially, the court observed that the EOW did not allege any attempts by Mehta to tamper with the investigation or witnesses since his judicial custody. There was also no claim of prior convictions for similar offenses. The court also recognized the uncertainty of the trial’s duration.

Quoting extensively from Sanjay Chandra V/s. CBI, the court reiterated that prolonged incarceration after the completion of the investigation and filing of the charge sheet serves no fruitful purpose and that the right to bail should not be denied if there is no serious contention that the accused would interfere with the trial or tamper with evidence.

Applying this ratio, the court found that the peculiar circumstances of the case and the principles laid down by the Apex Court favored granting bail. The objections raised by the prosecution and the intervenor were not accepted as sufficient to outweigh these considerations, especially as the prosecution’s and intervenor’s interests could be protected by imposing conditions. The court explicitly stated that Mehta’s application was decided on merit, not solely on the ground of parity with his wife.

Consequently, the court allowed the bail application with the following conditions:

1. Mehta shall be released on executing a PR Bond of ₹1,00,000/- with one or two solvent sureties of a like amount in connection with C.R. No. 692 of 2021.
2. Mehta is permitted to furnish provisional cash bail of ₹1,00,000/- for three months.
3. Mehta shall complete surety compliance before the concerned Court.
4. Mehta shall not leave Thane City without informing the Investigating Officer.
5. Mehta shall not leave India without prior permission of the Court.
6. Mehta shall attend each and every date of the trial without fail.
7. Mehta shall not tamper or hamper prosecution witnesses and evidence or pressurize any witness.
8. Mehta shall co-operate in the investigation as and when required.
9. Mehta shall submit his proper residential address proof and telephone/cell numbers to the Respondent/I.O.
10. Mehta shall submit his passport to the Respondent/I.O., if available.
11. Mehta shall not indulge in any criminal activity.
12. Mehta shall provide details of all properties owned by him within ten days of release and shall not alienate them without the Special Court’s permission.
13. Breach of any of the above conditions shall enable the Prosecution/I.O. to apply for cancellation of bail.

The Respondent/I.O. was directed to take note of the order, and the Bail Application No. 933 of 2023 was disposed of accordingly.

This order emphasizes the significance of the completion of the investigation and the filing of the charge sheet as a crucial factor in granting bail. The court prioritized the accused’s liberty after the investigation phase while imposing stringent conditions to ensure his presence at trial and prevent any interference with the judicial process. The encumbered status of the attached properties did not deter the court from granting bail, likely because the investigation was complete, and further property could still be pursued under the MPID Act.