Mumbai, January 19, 2022 – Kapil Surendra Mittal, accused in a multi-crore loan fraud case, has been granted bail by the Designated Court under the Maharashtra Protection of Interest of Depositors (MPID) Act. Judge C.V. Marathe allowed Mittal’s bail application (Bail Application No. 104 of 2022), citing parity with the main accused and the completion of the investigation.

Mittal was arrested in connection with C.R. No. 60 of 2017 (originally C.R. No. 301 of 2017 at Malad Police Station, later transferred to EOW), for offenses punishable under sections 420 (cheating), 465 (forgery), 467 (forgery of valuable security, will, etc.), 468 (forgery for purpose of cheating), 471 (using as genuine a forged document¹ or electronic record), and 120-B (criminal conspiracy) of the Indian Penal Code² (IPC).

Prosecution’s Case:

The prosecution alleged that M/s. Leeway Logistics Ltd. obtained loans of ₹19,97,58,162 from ICICI Bank between August 2012 and February 2016 for purchasing forklifts. The company defaulted on the loan, and it was discovered that the loans were obtained using forged documents. Specifically, loans were obtained in the name of a fictitious company, M/s. Kamal Sales Corporation, with forged invoices. Mittal allegedly prepared the bogus invoices of Kamal Sales.

Defense Arguments:

Mittal’s advocate, Ashok M. Saraogi, argued that the main accused, Sanjay Satishkumar Sinha, had already been granted bail by the Bombay High Court. He also argued that the main accused had repaid a significant portion of the misappropriated amount. He further contended that Mittal, a Chartered Accountant, had no direct role in the commission of the offense and that the investigation against him was complete. He also argued that the sections related to forgery had been amended and no longer covered the type of documents in question.

Prosecution’s Objections:

The Special Public Prosecutor (SPP), Mrs. Tendulkar, opposed the bail, arguing that Mittal had played a vital role in preparing false invoices and had received misappropriated money. She contended that the investigation against him was not yet complete.

Court’s Decision:

Judge Marathe noted that the main accused had been granted bail and had repaid a substantial portion of the misappropriated amount. He also noted that while Mittal was accused of preparing false invoices, the loan money was routed through various entities to the company’s account.

The court acknowledged that Mittal allegedly received financial benefits from the transactions. However, it also noted that the main brain and beneficiary was the main accused, who was already on bail. The court emphasized that Mittal had no prior convictions, his custodial interrogation was over, and he had been in judicial custody since December 31, 2021.

Considering these factors, the court concluded that Mittal was entitled to bail on the ground of parity and due to the completion of the investigation.

Conditions of Bail:

Judge Marathe granted Mittal bail on the following conditions:

• He must furnish a Personal Recognizance (P.R.) Bond of ₹1,00,000 with one or two sureties of the same amount.
• He must deposit his passport with the Investigating Officer (IO).
• He must not leave India without prior permission from the trial court.
• He must furnish his residential address and contact details to the IO and inform of any changes.

Significance of the Order:

This order highlights the court’s consideration of the following factors when granting bail in a financial fraud case:

• Parity with Co-accused: The court granted bail on the principle of parity, as the main accused had already been released.
• Completion of Investigation: The court considered the completion of the investigation and the fact that the accused was in judicial custody.
• Repayment of Misappropriated Amount: The court considered the repayment of a significant portion of the misappropriated amount by the main accused.
• Lack of Prior Convictions: The court considered the absence of prior convictions against the accused.
• Conditions to Ensure Presence: The court imposed stringent conditions to ensure the accused’s presence during the trial and prevent any interference with the investigation.