Mumbai, Maharashtra – August 1, 2015 – In a significant development, the Designated Court under the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 (MPID Act) at the Bombay City Civil & Sessions Court, presided over by Judge D.P. Surana, today granted bail to Adil Akhtar Jaipuri, a key accused in a large-scale financial fraud case. Jaipuri was arrested on June 1, 2015, in connection with C.R. No. 33/2015, facing charges under Sections 420 (cheating), 120-B (criminal conspiracy) of the Indian Penal Code, and Section 3 of the MPID Act.

The Economic Offence Wing (EOW) Unit III, Mumbai, had accused Jaipuri of being a partner in the “Kind Group of India,” a financial establishment alleged to have duped over 450 investors of approximately Rs. 19 Crores.

The Prosecution’s Case: A Ponzi Scheme

According to the prosecution, Adil Akhtar Jaipuri, along with his father Akthar, main accused Shekar Chandrashekar, Leena Paul, and Naseer Jaipuri, conspired to float various schemes under “Kind Group of India.” These schemes, including “Weekly New Year Bonanza,” “New Year Bonanza,” and “Christmas Santaclaus,” promised unrealistic returns, ranging from 10% to 20% monthly and an astounding 300% to 1500% on maturity.

The EOW alleged that the financial establishment had no genuine business operations. Instead, it operated as a Ponzi scheme, using fresh deposits from new investors to pay off earlier ones. The accused allegedly diverted the collected funds for their personal “enjoyment, amusement, and luxury,” committing fraudulent defaults. Investigations revealed that most transactions involved cash.

Further allegations stated that even after scheme maturity dates, the accused continued to collect money from depositors under false pretexts, such as claiming income tax raids and demanding an additional 10% deposit before releasing promised returns. During raids, authorities seized various items from the office premises, including Rs. 3.50 Lakhs in cash, jewelry, mobiles, watches, and designer accessories from the residences of co-accused Shekar and Leena.

Against Adil Akhtar Jaipuri specifically, the prosecution alleged that he induced depositors to invest, provided false information about the main accused Shekar Chandrashekar, and misrepresented the schemes, despite knowing the absence of any real business. He was also accused of fabricating false documents to cheat investors.

Applicant’s Defence: Probe Complete, Family’s “Bona Fide” Offer

Advocate Sadanand Shetty, representing Adil Akhtar Jaipuri, argued that his client had been sufficiently interrogated since his arrest on June 1, 2015, and that the charge-sheet had already been filed, negating the need for further custodial detention. He pointed out that none of the offenses carried a punishment exceeding seven years, making the applicant eligible for bail. Adv. Shetty also asserted that Jaipuri had no criminal antecedents.

A significant part of the defence rested on an undertaking given by co-accused Shekar to repay the entire defrauded amount within three months of his release. More critically, Adil’s father, Akthar Jaipuri, offered his ancestral property, “Gazal Villa” in Juhu, Mumbai, as security. While initially valued at Rs. 50 Crores, a valuation report submitted indicated its worth at Rs. 21.79 Crores. Akthar Jaipuri, who holds a 50% share in the property, stated in an affidavit that this share (approximately Rs. 10 Crores) could be used to compensate depositors if Shekar failed to repay the dues. Adil’s mother, Zara Ali Jaipuri, also affirmed her knowledge and consent to this arrangement before the court.

Adv. Shetty emphasized that Jaipuri has a permanent residence in Mumbai, reducing the risk of absconding.

Prosecution and Victims Oppose Bail

SPP Adv. Kanojia for the State, along with I.O. P.I. Khedakar from EOW Unit VII, and Adv. Rathod representing the victims/interveners, vehemently opposed the bail. They contended that Jaipuri played a major role, misappropriated funds for personal luxury, and posed a flight risk, given that he and co-accused were reportedly about to abscond. They also feared tampering with witnesses.

The I.O. specifically highlighted that Akthar Jaipuri’s 50% share in the offered property, roughly Rs. 10 Crores, was insufficient to cover the total defrauded amount of Rs. 19 Crores. They also expressed skepticism about co-accused Shekar’s undertaking, claiming he possessed no business or property for repayment, suggesting the offer was merely a tactic to secure bail.

Court’s Reasoning: Limited Role, Family’s Offer, Completed Probe

Judge D.P. Surana, after reviewing the arguments and documents, noted that the charge-sheet had already been filed, and most of the investigation was complete. Crucially, the court observed that during Jaipuri’s judicial custody, the I.O. had not sought further interrogation.

The court found no document on record to show that a “single amount has came to him (Adil Jaipuri)” or that he had purchased any valuable assets from the collected deposits for his own luxury. The valuable articles seized were primarily from main accused Shekar and Leena. The court concluded that Jaipuri’s role appeared “limited to enticing and giving false information,” and not to direct misappropriation of funds for personal gain.

Furthermore, the Judge acknowledged the “bonafide” displayed by Adil’s family in offering their ancestral property as security. The court noted that Jaipuri himself did not object to this offer, indicating his willingness for the property to be attached if necessary.

Considering Jaipuri’s permanent residence in Mumbai and the difficulty for the prosecution to substantiate how he could tamper with evidence or witnesses, the court deemed it appropriate to grant bail with suitable conditions to ensure his cooperation and presence.

Bail Conditions:

The court allowed the application, ordering Adil Akhtar Jaipuri’s release on bail in C.R. No. 33/2015 upon furnishing a Personal Bond (PB) of Rs. 50,000/- (Rupees Fifty Thousand only) with two sureties of the like amount, one of whom must be a local surety.

The bail is subject to the following stringent conditions:

• Adil Jaipuri shall not tamper with prosecution witnesses.
• He shall mark his presence with the Investigating Officer every Tuesday between 10:00 AM and 1:00 PM until further orders.
• He shall cooperate with the investigating agency.
• He shall not leave Mumbai without the prior permission of the designated court.
• He shall not dispose of any of his immovable properties without the permission of this court.

The decision underscores a judicial balancing act between the severity of the alleged financial crime and the accused’s rights once significant portions of the investigation are concluded and mechanisms for ensuring presence and compliance are in place.