Mumbai, June 10, 2024 – The Designated Court under the Maharashtra Protection of Interest of Depositors (In Financial Establishment) Act, 1999 (MPID Act) at the City Civil & Sessions Court, Greater Bombay, has denied bail to Arun Chandran, the Director of ABB Consultancy Pvt. Ltd., in a multi-crore investment fraud case. The decision, delivered by HHJ Abhijeet A. Nandgaonkar, cited the serious nature of the offense, the ongoing investigation, and concerns about the accused potentially absconding or tampering with evidence.
Chandran was arrested on April 22, 2024, in connection with Crime No. 282/2024 registered with Bangur Nagar Police Station, Goregaon. He faces charges under Sections 406 (criminal breach of trust) and 420 (cheating) of the Indian Penal Code (IPC), along with Sections 3 and 4 of the MPID Act.
Allegations of a Widespread Investment Scheme
The case was initiated based on a complaint filed by Mr. Dhanyeshwar Shankar Bansode, a retired BEST bus conductor. Mr. Bansode alleged that in October 2023, he was enticed by a WhatsApp advertisement forwarded by his friend, Mr. Rajaram Shripati Wagekar, to invest in ABB Consultancy Pvt. Ltd., promising an exorbitant 40% monthly return.
Initially, Mr. Wagekar invested Rs. 2,00,000/- and reportedly received three installments. Subsequently, Mr. Bansode and Mr. Wagekar visited ABB Consultancy’s office in Malad, where they met the accused, Arun Chandran. Impressed by Chandran’s assurances that the company was registered with SEBI and had its head office in Cochin, Kerala, Mr. Bansode invested Rs. 1,50,000/- (Rs. 1,00,000/- online and Rs. 50,000/- in cash). An agreement for a 12-month period was executed.
Mr. Bansode received a single installment of Rs. 60,000/- on February 6, 2024. However, he failed to receive the March 2024 installment, and Chandran’s mobile phone was switched off. Upon visiting the alleged head office in Cochin, Kerala, they discovered no such company existed at the given address. It was then that Mr. Bansode learned that Chandran had allegedly cheated numerous investors and had already been arrested in a similar case registered at Kashigaon, Mira Road.
The prosecution informed the court that Mr. Bansode, his friend, and his brother collectively invested Rs. 24,00,000/- in ABB Consultancy Pvt. Ltd. on the promise of the 40% return.
Defense Arguments
Ld. Adv. Mr. Murtaza Najmi, along with Adv. Ms. Sonia Sunil, representing Arun Chandran, argued that no offense had been committed. They contended that the 12-month agreement period had not yet expired (valid until December 30, 2024), and therefore, no cause of action had accrued for the informant to lodge the FIR. They highlighted that Mr. Bansode had already received his first installment of Rs. 60,000/-, suggesting a bona fide business transaction.
The defense asserted that Chandran was a genuine businessman operating with competent authority’s permission and had even refunded money, including interest, to some investors, indicating no mala fide intention to cheat. They stated that Sections 406 and 420 of the IPC, and Sections 3 and 4 of the MPID Act, were not attracted. They also pointed out that the Investigating Officer had already interrogated Chandran and seized relevant documents, implying that further custodial interrogation was unnecessary. They expressed Chandran’s readiness to abide by any court conditions, including depositing the amount, cooperating with the investigation, and not fleeing from trial. The defense also cited an order from the Telangana High Court (Criminal Petition Nos. 3119 and 3122 of 2024 dated March 22, 2024) which granted anticipatory bail in a similar type of offense.
Prosecution’s Strong Opposition
Ld. APP Mrs. Chaitrali Panshikar, representing the State-EOW, vehemently opposed the bail application. She presented additional information, revealing that the investigation had uncovered 23 investors who were duped of a total of Rs. 65,44,000/- by Chandran’s company under the same false promise of 40% returns. While some initial installments were paid, the full assured amounts were never repaid.
The prosecution emphasized that Mr. Bansode, a retired bus conductor, had invested his “hard-earned amount.” They highlighted that out of total investments of Rs. 91,66,000/-, only Rs. 26,42,000/- had been repaid, with the remaining balance still outstanding.
Crucially, the prosecution revealed that a similar offense (Crime No. 25/2024 under Sections 420 and 406 IPC) had been registered against Chandran at Kashigaon Police Station, where he was initially arrested before being transferred to this case. This indicated a pattern of similar criminal activity.
Ld. APP Panshikar argued that Chandran, being a resident of Kerala, posed a significant flight risk and could abscond, tamper with evidence, or influence prosecution witnesses if released on bail. She stressed the serious nature of the offense, involving a large number of investors and substantial amounts, making repayment as assured impossible.
Court’s Reasoning and Rejection of Bail
After considering all submissions and documents, Judge Nandgaonkar found the defense’s arguments unconvincing. The court noted that while the defense argued the agreement period was not over, the prosecution’s table showed that initial payments were made, with “further installment remains to be paid.”
The court found no evidence to substantiate the existence of ABB Consultancy’s alleged head office in Cochin, Kerala, despite the first informant’s and the Investigating Officer’s efforts to verify it. The Malad office was also found to be closed.
The judge stated that “assurance to the investors are found to be in vain about their return of 40% by the applicant/accused being managing director of his company.” The court explicitly observed that “the modus-operandi to return first installment to attract more investors to invest amount is nothing but with sole intention to cheat the investors.”
The court concluded that a prima facie case under Section 3 and 4 of the MPID Act, along with Sections 420 and 406 of the IPC, was attracted. The judge also dismissed the relevance of the Telangana High Court’s anticipatory bail order, clarifying that the current application sought regular bail.
The court accepted the prosecution’s apprehension that Chandran, being a resident of Kerala, might abscond, tamper with investigation, and influence witnesses. It emphasized that “this is subsequent offence of the same nature which is registered against the applicant/accused. Hence repeating the same crime to dupe the investors is possible if the applicant accused is released on bail.”
Based on these findings, the court deemed Chandran’s release during the ongoing investigation improper, even with stringent conditions.
The bail application was consequently rejected.