Mumbai, India – In a significant development, a Special Judge constituted under the Prevention of Corruption Act, 1988, for Greater Bombay at Mumbai, has rejected the regular bail application of Anilkumar Babulal Runthala, a 43-year-old businessman from Ahmedabad, Gujarat. Runthala was arrested in connection with a massive Goods and Services Tax (GST) refund fraud amounting to over ₹175.93 crore.
The order, issued by H.H. Special Judge S.B. Joshi (C.R. No.46) on September 3, 2024, states that prima facie material suggests Runthala’s involvement in the economic offense, which reportedly caused a substantial loss of public funds.
The Allegations: A Web of Bogus Companies and Diversion of Funds
Anilkumar Babulal Runthala was arrested on August 6, 2024, and subsequently taken into judicial custody on August 12, 2024, in connection with C.R. No. 07/2024. He faces serious charges under Sections 7, 13(1)(a) read with 13(2) of the Prevention of Corruption Act, 1988, and Sections 120(B), 403, 409, 420, 465, 467, 468, and 471 of the Indian Penal Code, 1860.
The case originated from a report lodged by Sanjay Raosaheb Tekade, Assistant Commissioner, State Tax, Mumbai. The report alleges that an officer from the Ghatkopar Division, during their tenure from 2020-2021, failed to follow Standard Operating Procedures (SOPs) and improperly processed GST refunds for 16 purported “bogus companies,” leading to the fraudulent disbursement of ₹1,75,93,12,622/-.
A four-member Special Investigation Team (SIT) conducted an inquiry and discovered that a co-accused, Amit Lalge, was instrumental in granting GST refunds to these 16 alleged bogus claimants.
Applicant’s Defense: Business Transactions and Cooperation
During the bail hearing, Mr. Mahesh Vinod Rajpopat, counsel for the applicant, argued that Runthala was not named as an accused in the initial First Information Report (FIR). He contended that the arrest was based on allegations in the remand papers, which claimed that ₹34.51 crore was deposited into the bank account of BRR Udyog Pvt. Ltd. and an additional ₹4.60 crore was transferred by one “Siya Trading” to the bank account of Runthala Enterprise Pvt. Ltd. – both companies linked to the applicant. In total, the prosecution alleged that ₹39.11 crore was transferred to Runthala’s bank accounts.
Runthala maintained that these amounts were legitimate transactions related to his gold merchant business, against gold purchased by various companies. He also admitted to the Investigating Authority that he transferred said amounts to three different bank accounts belonging to “hawala traders,” claiming he received commission from these transactions from the main accused.
The applicant’s counsel emphasized that Runthala had fully cooperated with the investigation since May 2024 and had emailed all relevant documents, including the Memorandum of Association (MoA) and Articles of Association (AoA) of his companies, ledgers, tax invoices for gold sales, and GST returns, to the investigating agency. He argued that with most of the investigation against other co-accused completed and a charge-sheet filed against them, there was no longer a need to keep Runthala in custody. He also stated that Runthala had no criminal antecedents and was a resident of Gujarat, assuring his availability for further investigation and compliance with any imposed conditions.
Prosecution’s Opposition: Incomplete Information and Ongoing Investigation
Mr. Lade, the Learned Assistant Public Prosecutor (APP), along with the Investigating Officer (IO), vehemently opposed the bail application. They submitted a joint statement, asserting that the ₹39.11 crore received by the applicant in his company accounts was part of the total fraud amount and had been “diverted.” They argued that Runthala had failed to provide detailed accounts or complete documentation to substantiate his claim that the transactions were legitimate and unrelated to the alleged crime.
The prosecution highlighted that the “end use” of the diverted amount was still under investigation. Furthermore, they pointed out that Runthala had identified “Swami and Sameer Shaikh” as individuals on whose instructions he entered into the transactions but had not provided their full names or whereabouts, hindering the investigation. The prosecution expressed concerns that if released, Runthala could tamper with evidence and influence witnesses.
Court’s Reasoning: Gravity of Offence and Incomplete Investigation
Special Judge S.B. Joshi, after hearing both sides, acknowledged that while the investigation against other arrested co-accused had concluded and a charge-sheet filed against them, the investigation concerning Runthala was still ongoing. The court noted that the documents submitted by the applicant, though voluminous, were deemed “incomplete” by the prosecution and required thorough scrutiny and verification.
The court emphasized the serious nature and gravity of the alleged economic offenses, which involve a substantial loss of public funds and potentially deep-rooted conspiracies. The judge found that at this stage, it could not be conclusively determined that Runthala had no involvement or that the ₹39.11 crore found in his accounts was unrelated to the larger ₹175 crore fraud.
“Since the role of the applicant is under investigation, the position would be cleared only on filing of the charge-sheet against the applicant,” the order stated.
Order: Bail Application Rejected
Based on these considerations, the court concluded that prima facie, Anilkumar Babulal Runthala was not entitled to be released on bail.
The bail application, B.A. No. 626 of 2024, was consequently rejected. The Investigating Officer has been directed to take note of the order.
The ongoing investigation is expected to shed more light on Runthala’s alleged role and the broader network involved in this large-scale GST refund scam.