The Court of City Civil and Sessions at Greater Bombay recently delivered a significant ruling in a high-stakes diamond fraud case, granting bail to the accused, Kunal Bharat Mehta. The order, issued on February 5th, 2024, in Criminal Bail Application No. 280 of 2024, highlights a crucial principle in bail jurisprudence: the material change in circumstances following the initial rejection of bail. Mr. Mehta was facing charges under Sections 409 (Criminal Breach of Trust), 420 (Cheating), and 465 (Forgery) of the Indian Penal Code in connection with C.R. No. 313/2023 registered with Dr. D.B. Marg Police Station.

The Anatomy of the Diamond Fraud

The case detailed a sophisticated scheme involving a “Natural HPHT processed diamond 11.00 carat” valued at ₹90,00,000/-. The complainant, a diamond dealer from Bangalore, intended to sell the stone. He was introduced to the accused, Kunal Mehta, and his associates, Zafar and Dilip, in Mumbai’s Zaveri Market. On September 14th, 2023, the complainant handed the diamond to Kunal Mehta in an office at Pancharatna Building. Mehta allegedly showed the diamond to an elderly person in an adjacent cabin, then placed it in a small plastic box (“dabbi”) and sealed it in an envelope right in front of the complainant.

The key to the fraud was the subsequent substitution of the diamond. When the complainant grew suspicious and immediately returned to the office after discussing price, he found it closed. The accused was evasive, and the office owner later informed the complainant that he had only given the office on rent to the accused two days prior. The complainant soon realized he had been duped, presumably having been given an empty or fake diamond packet while the original stone was swapped or stolen.

The Initial Rejection and The Pivot Point

Kunal Mehta’s initial bail application (Criminal B.A. No. 2691/2023) had been rejected. The three primary reasons for the rejection were:

1. The misappropriated property (the original ₹90 lakh diamond) remained unrecovered.
2. The investigation was still in progress.
3. A likelihood that the accused would pressurize prosecution witnesses if released.

However, the present application argued that the circumstances had fundamentally changed. The defense pointed out that the accused had cooperated with the investigation and that no further recovery was made at his instance. Furthermore, they brought up that the accused himself had previously filed a complaint against others for extortion, suggesting he was also a victim of illegal activities.

The Crucial Change in Circumstances

The Sessions Court, presided over by Additional Sessions Judge N. P. Tribhuwan, found that the prosecution’s own records supported the claim of changed circumstances. The court noted:

• Recovery of Property: Through the custodial interrogation of Kunal Mehta and subsequent arrests of co-accused Rakesh Patel, Vinkal Girish Shaha (@ Mac Shaha), and Sameer Masaliya, the misappropriated diamond (HPHT processed 11.02 carat worth ₹90 lakh) was successfully recovered and seized. This recovery neutralized the primary reason for the initial bail rejection.
• Investigation Complete: The prosecution had officially filed the charge-sheet before the Learned Trial Court, confirming that the investigation was completed and the accused’s continued custody was no longer required for investigative purposes.
• Prolonged Detention: The accused had been in jail since October 14th, 2023 (over three months), and the court acknowledged that due to the complexity of the case, there were no chances to conclude the trial within a short period.

While the prosecution noted the accused’s previous involvement in a similar offense (Crime No. 26/2022), the court felt it was essential to consider the nature of the offense and the changed facts. Concluding that the purpose of pre-trial detention—to aid investigation and secure evidence—was fulfilled, the court deemed it desirable to release the accused on bail.

The Conditions for Liberty

The court, therefore, allowed the application, ordering Kunal Bharat Mehta to be released on bail subject to strict conditions:

• Bond: The applicant must execute a Personal Bond for ₹50,000/- with one or more sureties in the like amount.
• Compliance: The applicant is mandated not to tamper with any prosecution witnesses and not to misuse his liberty.
• Address Details: He must furnish his detailed address and mobile number to the Investigation Officer and the concerned court, and immediately notify them of any changes.

This case serves as a vital precedent, demonstrating that even in cases of serious, high-value economic fraud, the completion of investigation and the recovery of stolen property constitute a substantial change in circumstances sufficient to secure an accused person’s constitutional right to liberty.