Mumbai, July 23, 2024 (Mumbai Legal Correspondent): The Designated Court under the Maharashtra Protection of Interest of Depositors (MPID) Act, located at the City Civil & Sessions Court in Greater Bombay, has granted bail to Lachmandas Sobhrajmal Sajnani, an 82-year-old semi-retired developer, in connection with a housing fraud case (Crime No. 520/2024) registered at the Bandra Police Station. The order, issued on July 5, 2024, by His Honour Judge Abhijeet A. Nandgaonkar in Court No. 20, came after the applicant and the complainant informed the court about an amicable settlement reached between them.

Sajnani, a resident of Chembur, Mumbai, was accused of offences punishable under Sections 406 (criminal breach of trust), 409 (criminal breach of trust by public servant, banker, merchant or¹ agent), 420 (cheating), and 120(B) (criminal conspiracy) read with 34 (acts done by several persons in furtherance of common intention) of the Indian Penal Code² (IPC), along with Sections 3 and 4 of the MPID Act, and Section 5 read with 13(1) and Section 5 read with 13(2) of The Maharashtra Ownership of Flats Act (MOFA).

The FIR alleged that the complainant, Smt. Meena Tavrani, and her son were looking for a home when they were introduced to Bharat Magnani (deceased), a partner of M/s Suchit Developers. Magnani allegedly made representations about the firm’s goodwill and reputation, leading the complainant to book a three BHK flat in the under-construction Aryan Tower in Bandra (West) after verifying the development rights of M/s Suchit Developers on the land.

The complainant claimed to have paid ₹30,00,000 in December 2005 and another ₹40,00,000 in June 2006 towards the flat. While construction progressed up to the 8th floor by 2009, there was allegedly no further progress. In 2015, the complainant received an email from the applicant’s office demanding ₹92,52,000 as escalation charges, against which she paid ₹15,00,000. As she did not receive possession, she requested the partners to execute the sale agreement and complete construction, but received no response. Facing mental stress, she filed a civil suit in the Bombay High Court, where a Court Receiver was appointed, and the suit remains pending. Subsequently, the FIR was lodged in April 2023, and Sajnani was arrested in June 2024.

Advocate Ashish Chavan, along with other advocates from Vidhii Partners, appeared for the applicant, arguing that the case was a civil dispute given a criminal angle with a malafide intention to use the police for recovery. The defense argued that the rehab building for original residents was ready in 2006, and the applicant, as a partner, was keen on completing the sale building (Aryan Tower) for profit. They claimed the applicant made efforts to revive the project since 2006 and that only the complainant had filed a complaint. The defense also argued against the applicability of Sections 409, 406, and 420 IPC, citing the lack of malafide intention and the applicant not being a public servant for Section 409. They highlighted the applicant’s age (82) and health issues, the 15-year delay in filing the FIR, his reputed family background, full cooperation with the investigation, and willingness to abide by conditions for bail.

Ld. APP Mrs. Chaitrali Panshikar opposed the bail, citing the serious economic nature of the offences under IPC and MPID Act, the involvement of ₹1,63,00,000 from seven investors, the incomplete investigation (including bank details and property), the non-completion of the project since 2005 despite payments, and the complainant being a widow. The prosecution argued a grave chance of tampering with evidence and the applicant absconding if released.

The Investigating Officer echoed these concerns, emphasizing the need to investigate other partners, trace the money trail, and the complainant’s homelessness after selling her property.

Ld. Adv. Mr. Vijay Jha for the intervenor (complainant) detailed the complainant’s plight as a 70-year-old widow who sold her ancestral property to purchase the flat and highlighted the mental stress and financial hardship caused by the delay. He argued for the rejection of the bail application due to the serious nature of the offences and the applicant’s deep involvement.

However, at the end of the hearing on the second day, the applicant and complainant informed the court about an amicable settlement. They stated their intention to file consent terms voluntarily without any coercion or fraud.

The applicant’s advocate informed the court that as Sajnani was in judicial custody, he was instructed to sign the consent terms on his behalf, undertaking that Sajnani would sign them personally within three days of his release. The complainant, who was not present, had already signed the consent terms, and her son, present in court, also signed on her behalf as per her instructions.

Judge Nandgaonkar carefully examined the consent terms and questioned the complainant’s son, who confirmed that he and his mother had thoroughly understood the terms and signed them voluntarily. The applicant’s advocate also affirmed the contents and willingness to abide by them. The consent terms were taken on record as Exhibit 6.

In light of the amicable settlement, Judge Nandgaonkar stated that the question of deciding the bail application on merit did not arise. Consequently, he ordered the release of the applicant on the following conditions:

1. The Bail Application No. 517 of 2024 filed by Lachmandas Sobhrajmal Sajnani is allowed in terms of the consent terms (Exh.6).
2. Sajnani shall be released on bail upon executing a personal bond of ₹50,000 with one or two solvent sureties of the like amount in Crime No. 520/2023 registered at Bandra Police Station.
3. A provisional cash security of ₹50,000 is permitted for one month in lieu of the surety bond.
4. The accused shall attend the Bandra Police Station as and when required by the investigating officer only upon written intimation until the filing of the charge sheet.
5. The accused and the surety shall inform the police and the trial court of any change in their residential address while the accused is on bail.
6. The accused shall not threaten or influence prosecution witnesses or hamper the investigation.
7. The accused shall not leave the territory of India without prior permission of the court.
8. Bail is granted before this court.
9. The applicant/accused is directed to appear before this court within three days after his release from jail to sign the Consent Terms.
10. Bail Application No. 517 of 2024 stands disposed of accordingly.

This order marks a resolution for the long-pending dispute between the complainant and the developer, facilitated by their amicable settlement reached during the bail proceedings. The court prioritized the settlement, leading to the grant of bail to the elderly accused, subject to standard conditions and his personal signing of the consent terms upon release.