Mumbai, Maharashtra – March 19, 2024 – Manoj Champaklal Shah, a 72-year-old resident of Vile Parle (E), Mumbai, has been granted bail by the Designated Court under the Maharashtra Protection of Interest of Depositors (MPID) Act in connection with an investment fraud case.

Background of the Case:

Shah, a director of M/s. S.V.K. Project LLP Company, was arrested and charged under Sections 406 (criminal breach of trust), 409 (criminal breach of trust by a public servant, banker, merchant or agent), 420 (cheating),¹ 465 (forgery), 467 (forgery of valuable security), 468 (forgery for purpose of cheating), 471 (using as genuine a forged document), and² 34 (acts done by several persons in furtherance of common intention) of³ the Indian Penal Code (IPC), as well as Sections 3, 4, 5, 8, and 13 of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (MOFA Act).

The prosecution alleged that Shah and other accused induced investors to invest in their “Slender” project in Vile Parle, promising flats and showing them government permits and plans. Investors invested Rs. 11,59,81,014/- but the project was left incomplete, and neither flats nor refunds were provided.

Arguments Presented:

Shah, through his advocate Sandesh Kamble, argued that he was a “sleeping partner” and had no active role in the company’s transactions. He presented police papers, including remand reports, indicating that the main accused, Suresh Shroff, had taken full responsibility and stated that Shah had no involvement. Shah also argued that he was an aged person suffering from ailments and had no prior criminal record.

The prosecution, represented by Special Public Prosecutor (SPP) Seema Deshpande, opposed the bail application.

Court’s Decision and Rationale:

Judge Aditee Uday Kadam granted bail to Shah. The court noted that:

• “Sleeping Partner” Status: The court acknowledged Shah’s claim of being a sleeping partner and noted that police records indicated Suresh Shroff had taken responsibility for the transactions.
• Lack of Overt Acts: The court found no prima facie evidence of Shah having committed any overt acts in the alleged fraud.
• Age and Health: The court considered Shah’s age and health ailments.
• No Criminal Antecedents: The court noted that Shah had no prior criminal record.
• Prima Facie Case in Cloud: The court determined that the prima facie case against Shah was “in cloud.”

Bail Conditions Imposed:

The court granted bail to Manoj Champaklal Shah on the following conditions:

• Personal Bond and Surety: He must furnish a personal bond of Rs. 50,000 with one or more sureties of the same amount.
• Provisional Cash Bail: He is permitted to furnish provisional cash bail of Rs. 50,000 for three months.
• Surety Compliance: He must complete surety compliance before the concerned court.
• Passport Surrender: He must surrender his passport to the investigating officer within one week of his release.
• Interrogation Availability: He must be available for interrogation by the investigating officer as and when required, under written intimation.
• No Leaving India: He must not leave India without prior permission from the court.
• No Property Alienation: He must not alienate any movable or immovable property in his or his wife/children’s name without court permission.
• No Tampering with Evidence: He must not tamper with prosecution evidence or pressurize witnesses.
• Contact Information: He must furnish his contact number and residential address to the investigating officer and keep them updated.
• Court Attendance: He must attend the dates of trial regularly.

Significance of the Decision:

This decision highlights the court’s consideration of the accused’s specific role in a company, particularly in cases involving multiple directors. The court’s emphasis on the “sleeping partner” status and the lack of prima facie evidence of overt acts indicates a cautious approach to bail decisions in complex financial fraud cases. The court also took into account the age and health of the accused, as well as the lack of a criminal record. This case also shows the courts willingness to grant bail when the evidence against the accused is weak.