Mumbai, Maharashtra – August 1, 2015 – The Designated Court under the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act (MPID Act) at the Bombay City Civil & Sessions Court, presided over by Judge D.P. Surana, today granted bail to Akhtar Jaipuri, one of the key accused in a massive 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 defrauded around 450 investors of approximately Rs. 19 Crores.

Prosecution Alleges Elaborate Ponzi Scheme

The prosecution’s case asserted that Akhtar Jaipuri, along with his son Adil, main accused Shekar Chandrashekar, Leena Paul, Naseer Jaipuri, and General Manager Salman Firoz Rizvi, conspired to launch numerous fraudulent schemes through “Kind Group of India.” These schemes promised extraordinarily high returns, ranging from 10% to 20% monthly and up to 1500% on maturity, through various “bonanza” offers.

The EOW alleged that the establishment had no legitimate business, operating as a classic Ponzi scheme where new investor funds were used to pay earlier ones. The accused purportedly used the defrauded money for their “enjoyment, amusement, and luxury.” Even after maturity dates, they allegedly continued collecting funds by falsely claiming income tax raids and demanding additional deposits. Most of the collected amount was in cash.

Raids on the company’s office and residences of co-accused Shekar and Leena reportedly yielded significant seizures, including Rs. 3.50 Lakhs in cash, jewelry, mobiles, watches, and various branded luxury items. Against Akhtar Jaipuri, specifically, it was alleged that he induced depositors, provided false information about co-accused Shekar Chandrashekar, misrepresented the schemes, and even fabricated false documents, despite being aware that no legitimate business was being run.

Defence Highlights Completed Probe and Ancestral Property Offer

Advocate Sadanand Shetty, representing 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, making further police custody unnecessary. He emphasized that none of the alleged offenses carried a punishment exceeding seven years, and that Jaipuri had no prior criminal record.

A significant point of the defence was the offer of Akhtar Jaipuri’s ancestral property, “Gazal Villa,” located in Juhu, Mumbai, as security. Jaipuri submitted an affidavit and a valuation report indicating the property’s worth at Rs. 21.79 Crores. As he holds a one-half share in the property, valued at approximately Rs. 10 Crores, he undertook that this share could be auctioned or sold to compensate depositors if the main accused, Shekar, failed to repay the entire amount within three months of his release (an undertaking given by Shekar in a separate bail application). Akhtar Jaipuri’s wife, Zara Ali Jaipuri, also affirmed her knowledge and consent to this arrangement before the court.

Adv. Shetty asserted that Jaipuri has a permanent residence in Mumbai, mitigating any flight risk.

Prosecution and Victims Contest Bail, Cite Insufficient Security

SPP Adv. Kanojia, along with I.O. P.I. Khedakar from EOW Unit VII, and Adv. Rathod for the victims, strongly opposed bail. They argued that Akhtar Jaipuri played a major role in inducing depositors and misappropriated funds for his own use. They also contended that he was about to abscond with co-accused and could tamper with or threaten witnesses if released.

The I.O. specifically challenged the property offer, noting that Jaipuri’s 50% share (approx. Rs. 10 Crores) was less than the total Rs. 19 Crores defrauded amount. They doubted Shekar’s ability to repay, alleging he had no business or property, and deemed the property undertaking by Akhtar Jaipuri as a “false” and “ambiguous” attempt to mislead the court.

Court’s Rationale: Limited Role and Bona Fide Offer Prevail

After considering all submissions and reviewing the case documents, Judge D.P. Surana observed that the charge-sheet had already been filed, and most of the investigation was complete, with no further interrogation sought by the I.O. during Jaipuri’s judicial custody.

Crucially, the court found no documentary evidence to show that “a single amount has came to him (Akhtar Jaipuri)” or that he had purchased any valuable assets from the defrauded funds for his personal luxury. The court noted that valuable items were primarily seized from the main accused Shekar and Leena, and “not a single amount was seized by the I.O. from the applicant accused.” The court concluded that Jaipuri’s role, while involving inducement and false information, appeared “limited and lesser to the role played by the main accused Shekar and his partner Leena.” The prosecution also failed to substantiate how Jaipuri directly benefited from the crime proceeds.

Furthermore, the Judge acknowledged Jaipuri’s “bonafide” in offering his ancestral property as security, noting his willingness for it to be attached if depositors were not settled. Considering Jaipuri’s permanent Mumbai residence and the lack of concrete evidence from the prosecution regarding his ability to tamper with evidence or flee, the court decided to grant bail with appropriate conditions.

Bail Conditions Imposed

The court allowed the bail application, ordering Akhtar Jaipuri’s release 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 contingent upon the following conditions:

• The applicant 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.

This ruling underscores the court’s emphasis on the completion of the investigation and the accused’s efforts to provide security, even in cases involving significant financial fraud.