Mumbai, September 16, 2023 – The Designated Court under the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 (MPID Act),¹ at the City Civil & Sessions Court, Mumbai, presided over by His Honour Judge Shri S. B. Joshi (Court Room No. 7), has rejected the bail application of Akshay Pradeep Ahuja, a 21-year-old resident of Kandivali. Ahuja sought regular bail under Section 439 of the Code of Criminal Procedure, 1973, in connection with C.R. No. 284 of 2023 registered with the Kandivali Police Station for offences punishable under Sections 406 (Criminal breach of trust), 409 (Criminal breach of trust by public servant, or by banker, merchant or agent), and 420 (Cheating) of the Indian Penal Code,² 1860 (IPC), as well as Section 3 of the MPID Act. The oral order was pronounced on September 15, 2023, and the signed copy was uploaded on September 16, 2023.

Ld. Advocate S. V. Sonawane appeared for the Applicant, Ld. SPP Seema Deshpande represented the State, and Ld. Advocate Vijaya Obhan appeared for the Intervenor (the first informant).

Prosecution’s Case:

As per the FIR dated July 5, 2023, the applicant, Akshay Ahuja, was allegedly engaged in equity trading. The informant, Kavita Hemant Kumar, was informed by the applicant’s deceased mother that share trading yielded good profits and was advised to invest, with the applicant managing the business due to his mother’s illness. The applicant and his mother allegedly offered two investment schemes: a 60% return on a 60% investment within two months, or a daily return leading to 75% of the invested amount plus profit and principal in three months.

Based on this, the informant and her husband handed over ₹7 lakhs in cash to the applicant. A written agreement stated that ₹11,20,000 would be returned by February 10, 2023. Subsequently, the applicant allegedly convinced the informant’s husband to invest ₹11,20,000 more, promising an additional 60% return. A second agreement on April 13, 2023, stipulated a return of ₹17,62,000 by June 13, 2023. The informant claimed her husband transferred ₹13,00,000 to her account on April 13, 2023, and ₹14,00,000 on April 28, 2023, after which her husband allegedly entered into an agreement with the applicant for an ₹88,00,000 return.

The informant stated she received some initial payments before transferring ₹27,50,000 to the applicant’s account on May 2, 2023, with an agreement for a daily return of ₹1,50,000 until the principal was paid. She also allegedly paid ₹6,30,000 in cash. Another agreement dated May 30, 2020 (likely a typographical error for 2023), showed a receipt of ₹79,00,000 with a daily repayment of ₹3,96,480. Upon demanding the ₹79,00,000 back, the applicant allegedly provided cheques as security. Suspecting the applicant would flee, the informant approached the police on July 5, 2023, leading to his arrest for allegedly cheating and misappropriating ₹79,00,000.

Applicant’s Arguments for Bail:

The applicant denied the allegations, stating that the informant’s statement did not show any inducement. He claimed she had obtained money as a friendly loan, evidenced by agreements. He asserted the transactions were civil in nature, wrongly given a criminal color, and that he was falsely implicated. He argued that the alleged offences under IPC were not attracted, the statement lacked support, his arrest was illegal, nothing was to be recovered, all documents were with the investigating authority, the informant gave a false statement, the dispute was civil, investigation was almost over since his arrest on July 5, 2023, and being a Mumbai resident, he would not flee or tamper with witnesses. He offered to abide by any conditions and cooperate with the investigation.

Prosecution’s Opposition:

The investigating authority, through the Ld. SPP, opposed the bail, stating that investigation revealed the applicant had cheated many investors, leading to the addition of the MPID Act offences. Documents related to the offences and transactions with other investors, along with bank statements, were seized during a search of the applicant’s house. Inquiry with the Sub-Registrar indicated the applicant had no landed property in Mumbai. The cheated amount was yet to be recovered. The prosecution argued that if released, the applicant would flee justice, tamper with the ongoing investigation, and influence witnesses.

Applicant’s Rebuttal:

The Ld. Counsel for the Applicant reiterated that IPC and MPID Act offences could not run together and that the prosecution’s story was false. He presented bank account statements showing returns to the informant and a complaint application dated July 3, 2023, filed by the applicant against the informant and others, alleging criminal activities. He also presented copies of friendly loan agreements. The counsel argued that the bank statements showed repayments to the informant, the applicant was not a beneficiary, and the transaction was civil. He cited case laws arguing against the applicability of MPID Act in civil disputes.

Court’s Reasoning for Denying Bail:

The Court noted the applicant’s claims of a civil dispute and friendly loan, along with the produced agreements and bank statements showing some repayments. However, the Court stated that these were subject to scrutiny by the investigating agency. The EOW’s submission of multiple investor statements alleging cheating by the applicant without repayment was given importance. The applicant failed to provide documents showing repayment to these other investors. Thus, the Court found it could not prima facie trust the applicant’s claim of no fault.

The Court addressed the applicant’s argument against the applicability of IPC and MPID Act, stating that the applicant’s dealing in equity trading and prima facie inducement of investors with unviable promises, as per the EOW’s submission and investor statements, indicated mala fide intention. The investigation was ongoing, assets were yet to be traced and secured for repayment of a large amount (in crores), the end use of the misappropriated/cheated money was being investigated, and the charge sheet was not yet filed.

The Court relied on the Supreme Court’s observations in Y. S. Jagan Mohan Reddy Vs. Central Bureau of Investigation and Nimmagadda Prasad Vs. Central Bureau of Investigation, emphasizing that economic offences are a class apart and require a different approach in bail matters due to their potential impact on the country’s financial health. The Court found these precedents squarely applicable as the applicant’s role was still under investigation, and the final position would be clear only after the charge sheet was filed. At this stage, it could not be concluded that IPC and MPID Act accusations could not run together, as this required evidence and a full trial. Therefore, the case laws cited by the applicant were deemed inapplicable to the present facts.

Considering the ongoing investigation, the large amount involved, the allegations of cheating multiple investors, and the prima facie inducement and unviable promises made by the applicant, the Court found this not a fit case for granting bail.

Order of the Court:

His Honour Judge Shri S. B. Joshi passed the following order:

1. The present Bail Application No. 731 of 2023 filed by the Applicant Akshay Pradeep Ahuja in connection with C.R. No.284 of 2023 registered with Kandivali Police Station for the offences punishable under Sections 406, 409 and 420 of the Indian Penal Code, 1860 (hereinafter referred as “IPC”) as well as Section 3 of The Maharashtra Protection of Interest of Depositors Act, 1999, is hereby rejected.
2. Accordingly, Respondent/I.O. to take the note of this order.
3. The present Bail Application No. 731 of 2023 stands disposed of accordingly.

The rejection of bail highlights the Court’s concern over the serious allegations of cheating and misappropriation, the ongoing investigation involving multiple investors, and the large sum of money involved. The Court prioritized the need for a thorough investigation and the potential flight risk and tampering with evidence, outweighing the applicant’s claims of a civil dispute and repayments to the initial informant.