Mumbai, Maharashtra – December 2, 2024 – In a significant ruling, the Designated Court under the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act (MPID Act) at the City Civil & Sessions Court, Greater Bombay, today granted bail to Amar James Pereira, a 35-year-old businessman implicated in an alleged investment fraud totaling over Rs. 76 lakhs.
Additional Sessions Judge N.G. Shukla (Court Room No. 20), while granting bail, observed that prima facie, several serious charges invoked by the police, including those related to organized crime and criminal breach of trust under the new Bharatiya Nyaya Sanhita (BNS), might not apply to the applicant.
Pereira was arrested on October 11, 2024, in connection with CR No. 85/2024 (DCB CID), arising from Malad Police Station’s FIR No. 846/2024. He faces charges under various sections of the BNS, 2023, including 316(2), 316(5), 319(2), 318(4), along with Section 25(c) of the Indian Telegraph Act, 2000, and Section 3 of the MPID Act, 1999. The police had also subsequently added Section 111(2)(b) of BNSS (likely referring to BNS Section 111 related to organized crime).
The Allegations: A Virtual Investment Scam
According to the prosecution, Amar James Pereira and co-accused Bableshkumar Yadav are partners/directors of a “Financial Establishment” named VFX Markets Company. They allegedly floated schemes through the company’s website, inviting various investors to deposit 100 USD. Once deposited, the money was reportedly transferred to a bank account under the name of “Kailash Constructions.”
The prosecution stated that VFX Markets Company initially displayed “virtual profit” to investors, but later showed “virtual loss,” thereby allegedly cheating investors by not returning their money. Furthermore, another company, “Quantik Infotech,” linked to Pereira and Yadav, allegedly received Rs. 76,10,824/- (Rupees Seventy-Six Lakhs Ten Thousand Eight Hundred Twenty-Four only) from investors between March 1, 2021, and March 29, 2023.
Applicant’s Defence and Court’s Observations
Advocate Mr. Rahul Arote, representing Amar James Pereira, argued that his client was arrested on October 11, 2024, and had been in police custody until October 19, 2024, during which he was sufficiently interrogated. Arote contended that there were no previous similar crimes registered or charge-sheets filed against Pereira, which he argued should negate the applicability of the organized crime provisions (Section 111 of BNS).
A crucial point raised by the defence was the presence of a “disclaimer clause” on the company’s website, which reportedly stated the inherent risks of investment and the possibility of losses. Based on this, the defence argued that there was no specific assurance of returns, and therefore, the money invested by the depositors might not strictly fall within the definition of “deposit” under Section 2(c) of the MPID Act. Consequently, the offense under Section 3 of the MPID Act was questioned.
Furthermore, Adv. Arote argued that the allegations, if proven, would not attract offenses of criminal breach of trust (BNS 316(2) and 316(5)). He stated that Pereira was ready to cooperate with the ongoing investigation and that his continued detention was not required.
Court Questions Applicability of Severe Charges
While APP Mrs. Chaitrali Panshikar for the State opposed the bail, citing the large sums involved and the risk of tampering with evidence and influencing witnesses, Judge N.G. Shukla made several critical observations in the bail order:
- Sufficient Interrogation: The court noted that Pereira had been in police custody for over a week, providing sufficient opportunity for interrogation. His bank accounts had also been debit frozen.
- Criminal Breach of Trust (BNS 316): The Judge observed that “prima facie, offence of criminal breach of trust… would not attract against the applicant” as the case appeared to be one of “luring and inducing the investors for investment,” which leans more towards cheating rather than entrustment followed by breach of trust.
- Organized Crime (BNS 111/116): The court highlighted that to attract organized crime provisions, specific conditions under Explanation of Section 111(1) of BNS must be met, including “continuing unlawful activity and more than one charge-sheet has been filed before competent court.” The Judge found “no material showing compliance of these conditions.”
- MPID Act (Section 3): The court found that “in view of disclaimer clause, disclosed on the website of the FE, attracting sec.3 of MPID Act is also questionable.”
Considering these points, the court concluded that “at the most, offence of cheating would attract against the applicant for which punishment of imprisonment upto 7 yrs. is provided.”
Bail Granted with Conditions
Given that further custodial interrogation was deemed unnecessary and the most likely applicable offense carried a maximum imprisonment of seven years, the court decided to grant bail to Amar James Pereira, imposing several conditions to ensure his cooperation and prevent interference with the investigation.
Pereira is to be released on bail upon executing a personal bond of Rs. 1,00,000/- (Rupees One Lakh Only) with one or two solvent sureties of the like amount.
The conditions for his bail include:
- Attending the office of the investigating agency as and when called and cooperating with the remaining investigation.
- Not leaving India without prior permission of the Court.
- Depositing his passport with the Investigating Officer within two weeks of release (or filing an affidavit if he does not possess one).
- Not tampering with evidence or influencing witnesses.
- Submitting proof of his residential address and contact mobile numbers, as well as those of two close relatives, to the Investigating Officer within two weeks of release, and updating them in case of changes.