Mumbai, Maharashtra – A Mumbai Sessions Court has rejected the regular bail application of Mohammed Mushtaq Ahmed, a 52-year-old businessman from Hyderabad, who is accused in a complex case involving criminal breach of trust, forgery, and cheating amounting to Rs. 45 crore. The order for Criminal Bail Application No. 639 of 2022 was pronounced on April 8, 2022, by Additional Sessions Judge Deepak L. Bhagwat (C.R.60).
Ahmed was seeking bail in C.R. No. 93 of 2021, registered at EOW Unit-V, for offenses punishable under sections 409 (criminal breach of trust), 420 (cheating), 465 (forgery), 467 (forgery of valuable security), 468 (forgery for purpose of cheating), 471 (using as genuine a forged document) read with section 34 of the Indian Penal Code, and sections 4, 8, 13 of the Maharashtra Ownership of Flats Act (MOFA).
Prosecution’s Allegations
The prosecution’s case, presented by Smt. Seema Deshpande, Additional Public Prosecutor, outlines that the informant’s companies had purchased properties in Hyderabad and subsequently entered into a development agreement with FIMA Properties company, where the accused, Mushtaq Ahmed, and co-accused Mohd. Arif, served as directors. Under this agreement, FIMA Properties was responsible for developing the land.
It is alleged that the accused obtained substantial amounts of money from the informant but misappropriated these funds for their personal benefits. A crucial accusation involves the forgery of the informant’s company’s board resolution, which was then used in a supplementary agreement. This, according to the prosecution, constitutes criminal breach of trust, forgery, and led to the informant being cheated out of Rs. 45,00,00,000/-. The prosecution contended that despite the transaction originating in 2007, the forgery was committed later, and the informant only became aware of it in 2021, leading to the delayed filing of the FIR. They also asserted that several other individuals had been defrauded by the accused, and the investigation remains ongoing.
Defense Arguments
Shri. Manan Sanghai, the advocate for the applicant, argued that the disputed project is located in Hyderabad, and 95% of the construction has already been completed, with the accused committed to finishing the project promptly. He cited an observation from Revision Petition No. 235 of 2022, where Sessions Court Room No. 37 noted that further custodial interrogation of the accused was not necessary.
The defense also contended that forging registered documents is challenging. They claimed that the first informant was the actual beneficiary of the supplementary agreement/deed of allotment, which utilized the contested board resolution, as it demarcated the informant’s area. Thus, the defense asserted the dispute was primarily civil in nature and arbitrable. The advocate highlighted the delay in lodging the FIR, noting the matter dates back to 2007 while the FIR was filed in 2021. He stated that all requisite documents, including the board resolutions, had already been obtained by the investigating agency, leaving no possibility of the applicant absconding.
Court’s Observations and Decision
Justice Deepak L. Bhagwat meticulously analyzed the arguments and the available evidence. The court acknowledged that the development project was delayed. However, the core issue revolved around the allegations of forgery of the board resolutions. The informant claimed the board resolutions used in the supplementary agreement/allotment deed were forged due to the absence of genuine signatures.
The court examined the genuine letterheads of the informant’s companies and found that they did not match the letterheads used for the allegedly forged board resolutions. This disparity strongly suggested that the board resolutions had indeed been forged. While the supplementary agreements indicated that excess area was being granted to the informant, the court noted that there was no evidence that these agreements were ever communicated to or brought to the knowledge of the informant. The court inferred that these supplementary agreements might have been created merely as a “paper exercise.”
Justice Bhagwat stated that once forgery is established, there must be a dishonest objective behind it, which would become apparent as the investigation progresses. The court also highlighted that the accused had allegedly sold certain flats, which were part of the informant’s share, to third parties such as ‘Subishi’ and ‘Yeram Vijay’, indicating further acts of cheating.
Addressing the discrepancy in the alleged amounts paid to the accused (Rs. 16,28,53,854/- versus Rs. 18,51,01,000/-), the investigation papers confirmed that Rs. 18,51,01,000/- was indeed paid. The defense’s claim that this amount was for encroachment removal was also challenged, as the survey numbers of the alleged encroachers did not match the informant’s properties.
The court firmly rejected the defense’s argument that the dispute was purely civil. It concluded that the facts clearly revealed the commission of cheating, misappropriation, and forgery by the accused, making it a matter of criminal proceedings unaffected by any pending civil or arbitral disputes.
Regarding the delay in filing the FIR, the court found the prosecution’s explanation credible, accepting that the informant only recently gained knowledge of the forgery.
In its final decision, the court underscored that there was a strong prima facie case against the accused. Given that the investigation was still at a preliminary stage, involving a large sum of money and complex facts, and with other accused yet to be arrested, the court was not inclined to grant bail.
The court considered various judgments cited by the defense, including Sanjay Chandra v. CBI and P. Chidambaram v. Directorate of Enforcement, which emphasize personal liberty and that economic offenses are not entirely exempt from bail guidelines. However, Justice Bhagwat distinguished these cases, stating that in the present matter, the huge amount involved, coupled with the ongoing investigation into cheating, misappropriation, and forgery, warranted a different approach.
Consequently, Criminal Bail Application No. 639 of 2022 was rejected.