Mumbai, April 14, 2025 (Thane News Bureau): In a significant development in the alleged ₹14 crore investment fraud case involving Raj Entertainment and M/s. Shriraj Winery LLP, the Designated Court under the Maharashtra Protection of Interest of Depositors (MPID) Act, situated at the City Civil & Sessions Court in Mumbai, has granted regular bail to one of the prime accused, Raghavendra D, son of Shri Devendrappa, a resident of Raichur, Karnataka.

The order, passed on February 17, 2024, by Her Honour Judge Aditee Uday Kadam in Court Room No. 7, addressed Bail Application No. 34 of 2024, filed by Raghavendra D, who was implicated as Accused No. 1 in C.R. No. 95 of 2022. This case was initially registered with the Economic Offences Wing (EOW), Unit-VIII, Mumbai, and cross-referenced as C.R. No. 729 of 2022 at the Malad Police Station.

Raghavendra D faced charges under Sections 409 (criminal breach of trust), 420 (cheating) read with Section 34 (acts done by several persons in furtherance of common intention) of the Indian Penal Code,¹ 1860, as well as Sections 3 and 4 of the stringent MPID Act, 1999.

The prosecution vehemently opposed the bail application, filing their response at Exhibit No. 02. Additionally, Ketan Ghanshyamprasad Bhat, the first informant in the case, was allowed to intervene and also resisted the bail plea through his submission at Exhibit No. 05.

Details of the Alleged Scam:

According to the prosecution’s case, the informant and his associates invested a substantial amount of money with Raj Entertainment, the applicant’s company, after being introduced to a partner in December 2019. Raghavendra D and other accused allegedly lured investors with promises of lucrative returns through various schemes. One such scheme involved purchasing 66 beer bottles for ₹10,000 with the assurance of selling each for ₹750, supposedly yielding a profit of ₹49,500 within a single day. Investors were also presented with other investment plans and guaranteed secured repayments.

The informant claimed to have invested in all three schemes offered by Raj Entertainment. However, in March 2020, during the nationwide lockdown, Raghavendra D reportedly informed investors about the closure of his pub and subsequently halted the promised returns.

The narrative further alleged that Raghavendra D, along with co-accused Bhaktanand and Manjunath, then established another entity named M/s. Shriraj Winery LLP. This new company purportedly started refunding some investors of Raj Entertainment and also solicited fresh investments. The informant claimed to have invested in M/s. Shriraj Winery LLP and was provided with login credentials for multiple accounts through which he initially received returns.

The prosecution stated that the accused individuals, including Raghavendra D, Bhaktanand, and Manjunath, allegedly conducted meetings at various 5-star hotels, portraying themselves as authority figures of the company to induce further investments in different schemes. However, since September 15, 2021, the informant allegedly stopped receiving returns on his investments and was met with evasive responses and denials from the accused.

Consequently, the informant approached the police and filed a complaint, alleging that Raghavendra D and other accused had defrauded him of ₹5,09,645. The complaint further claimed that approximately 600 investors were duped in a financial scam amounting to around ₹14 Crores. The FIR against the applicant and other accused was lodged on May 30, 2022.

Arguments Presented by the Applicant:

Advocate Swapnil Telang, representing the applicant, argued that Raghavendra D had been falsely implicated based on insufficient evidence and suppression of crucial facts. He highlighted that the first informant and his wife had already received ₹18,87,535 against their initial investment of ₹5,09,645, suggesting a lack of fraudulent intent.

The defense also contested the ₹14 crore figure, stating that a list of 653 investors reflected an aggregate amount of ₹11,29,28,900. Advocate Telang attributed the financial difficulties to the Covid-19 pandemic and subsequent lockdown, which brought the company’s business to a standstill. He asserted that the applicant and his partners immediately began refunding the full principal amounts to all investors, even before the maturity dates of the schemes. It was claimed that most investors had received their principal along with accumulated interest, resulting in no actual monetary loss for them.

The defense further argued that even if the prosecution’s timeline was considered, the outstanding amount would be a matter of accounts, estimated to be between ₹40 to ₹50 lakhs.

Advocate Telang pointed out that another partner, Manjunath, had provided details of all 653 investors and the amounts due to them until the final maturity date. He also emphasized that the Hon’ble High Court of Judicature at Bombay had granted anticipatory bail to Manjunath. Furthermore, the court was informed that one Vitthal Shinde had withdrawn his complaint against the applicant and others.

The applicant expressed his willingness to settle any legitimate dues owed to the investors. Advocate Telang presented a collection of documents, including account statements, to demonstrate that a substantial amount had already been paid to the investors, indicating no intention to deceive. He argued that a prima facie case was not established against his client and that the co-accused, Manjunath, being released on anticipatory bail warranted similar relief for Raghavendra D on the grounds of parity. The defense also stated that the applicant had cooperated with the investigation, and therefore, his continued physical custody was unnecessary.

Observations and Order of the Court:

Her Honour Judge Aditee Uday Kadam, after hearing the arguments from both sides and perusing the relevant documents, acknowledged the prima facie involvement of the applicant as a Director of Raj Entertainment Company. However, the court also noted the documents and bank statements produced by the applicant, suggesting that an amount exceeding the initial investment had been paid to the first informant.

The court took cognizance of the applicant’s claim that full principal amounts were refunded to investors post-lockdown and the submission of a letter indicating the clearance of dues by one investor who subsequently withdrew his complaint. The affidavit submitted by the co-accused, Manjunath, to the High Court, listing his properties for potential attachment by the Investigating Agency, was also considered. The court observed that these properties belonged to the company and not the individual.

While the prosecution argued the need for further verification of accounts, websites, and other businesses, the court opined that these aspects and the property details provided by the co-accused were already in the possession of the prosecution for due verification. The court found that solely for the purpose of verification, it was not necessary to keep the applicant incarcerated.

Crucially, the court highlighted the Memorandum of Understanding (MoU) with the first informant and other investors regarding the repayment of dues, and the fact that the co-accused, Manjunath, who stood on equal footing with the applicant, had been granted anticipatory bail by the High Court. Based on these considerations, the court found the applicant entitled to bail on the ground of parity.

Furthermore, the court noted that the applicant had no prior criminal record and had expressed his readiness to abide by any conditions imposed by the court.

Considering all these factors, Her Honour Judge Aditee Uday Kadam allowed Bail Application No. 34 of 2024, granting regular bail to Raghavendra D. The operative part of the order stipulated the following conditions:

1. Bail Bond: Raghavendra D. shall be released on furnishing a Personal Recognizance (PR) bond of ₹1,00,000 (Rupees One Lakh only) with one or more solvent sureties of the like amount.
2. Provisional Cash Bail: The applicant is permitted to furnish a provisional cash bail of ₹1,00,000 for a period of two months.
3. Passport Surrender: The applicant shall surrender his passport to the investigating officer within one week of his release.
4. Interrogation Availability: The applicant shall make himself available for interrogation by the Investigating Officer as and when required, under written intimation.
5. No Travel Abroad: The applicant shall not leave India without prior permission from the Designated Court.
6. No Property Alienation: The applicant shall not sell or transfer any movable or immovable property in his name, his wife’s/children’s names, or any other person’s name without the court’s permission.
7. No Tampering with Evidence: The applicant shall not tamper with prosecution evidence or pressure prosecution witnesses in any manner.
8. Contact Information: The applicant shall furnish his contact number and residential address to the Investigating Officer and keep him updated of any changes.
9. Regular Trial Attendance: The applicant shall attend all dates of the trial regularly.

The order was dictated and pronounced in open court on February 17, 2024, in Mumbai.

This bail order marks a significant development in the ongoing investigation of the alleged ₹14 crore investment scam, raising questions about the future course of the case and the potential relief for other accused individuals. The conditions imposed by the court underscore the seriousness of the allegations and the need for the applicant’s continued cooperation with the investigation and the judicial process.