Mumbai, Maharashtra – December 9, 2015 – The Designated Court under the Maharashtra Protection of Interests of Depositors (In Financial Establishments) Act, 1999 (MPID Act), presided over by Special Judge D. P. Surana (C.R. No. 36), today granted bail to Uday Suresh Surve, a builder accused in a case involving alleged fraudulent default of investments.
Surve, who was arrested on October 30, 2015, in C.R. No. 251 of 2015 of Khar Police Station, faced charges under Sections 406 (criminal breach of trust), 420 (cheating), and 34 (common intention) of the Indian Penal Code (IPC), along with Section 3 of the MPID Act.
Allegations and Defense’s Stand
The prosecution’s case asserted that Surve, a builder, received investments from nine individuals, including informant Dhanraj Rajpal and his wife, and allegedly duped them of a total of Rs. 3 crores (from the informant and his wife) and Rs. 73 lakhs (from the remaining seven investors).
Advocate Kulkarni, representing Surve, argued that the provisions of the MPID Act were not applicable as the amounts received were in the nature of loans, making the entire transaction civil. He contended that Surve was not disputing his liability but faced business problems preventing repayment. He also highlighted that part of the amount had already been repaid to most creditors, and half of the principal amount received by the informant had been returned. Kulkarni further stated that two of Surve’s construction projects, Jai Maharashtra Nagar Housing Federation Ltd. (MHADA) and Shiv Shakti Enclave, were stalled due to government policies. He mentioned that 14 flats were given to the informant and his wife as collateral security against their loan. Surve, he added, had cooperated with the investigation, and all relevant documents had already been seized by Khar Police, rendering further custody unnecessary.
Prosecution and Informant’s Opposition
Special Public Prosecutor Advocate Malankar and Investigating Officer Senior PI Ganore of Khar Police Station opposed the bail. They argued that a prima facie case of cheating was made out against Surve, who had allegedly duped other flat owners as well, with several cheating cases pending against him. They claimed Surve received investments under the pretext of constructing buildings and paying interest from profits, but neither constructed nor started any project, indicating an intention to cheat from the outset.
Advocate Nagi, representing the informant, supported the opposition, contending that Surve’s conduct showed an initial intent to dupe. He disputed Surve’s claim of paying Rs. 45 lakhs to his wife, asserting that Surve made false representations to receive deposits. Nagi also claimed Surve had not cooperated with the investigation and that his construction projects were commercially unviable. He further alleged that Surve had undisclosed properties, including two pubs in Dubai, and expressed concerns about potential tampering with witnesses and evidence, and the possibility of Surve absconding.
Court’s Observations and Decision
Special Judge D. P. Surana considered all submissions and reviewed the documents, including the IO’s and informant’s replies. The court made several key observations:
- The court distinguished the current case, which involved fraudulent default of 9 investors, from other cheating cases against Surve regarding non-provision of flats.
- It was undisputed by the IO that Surve had paid part of the amount to most investors.
- While the agreement between Surve and the informant’s wife might fall under the definition of a deposit, Surve claimed he provided flats as security, suggesting a loan transaction.
- Documents indicated that Surve’s projects were stalled possibly due to government policy or hopes of increased Floor Space Index (FSI), a common expectation among builders. The court noted that at this stage, the contracts could not be definitively termed commercially unviable.
- None of the alleged offenses carried a punishment of more than seven years.
- The court noted that Surve had been sufficiently interrogated, and no further purpose would be served by keeping him in custody.
- Crucially, the IO admitted that all relevant documents were already in the custody of either Khar Police Station or the Economic Offences Wing (EOW) from other cases. The IO did not allege requiring more documents from Surve for investigation.
Given that the case primarily relied on documentary evidence, which was already seized, and considering the part payments made, the court found Surve entitled to bail, subject to certain conditions to prevent tampering or absconding.
Bail Granted with Conditions:
The court allowed the application and ordered the release of Uday Suresh Surve on bail in C.R. No. 251 of 2015 for the alleged offenses, upon executing a Personal Recognizance (PR) bond of Rs. 5 lakhs with one or more sureties of the like amount.
The bail is subject to the following conditions:
- Surve shall surrender his passport to the investigating agency.
- He shall not leave India without the prior permission of the Designated Court.
- He shall mark his presence with the investigating officer every Monday between 10:00 a.m. to 1:00 p.m. until the filing of the chargesheet.
- He shall not tamper with prosecution witnesses or evidence in any manner.
- He shall not dispose of any of his immovable properties without the prior permission of the Designated Court.