HC denies bail to key accused in ₹214-Cr investment fraud

The EOW’s investigation revealed that the directors of the firm Shree Ramanjaneya Leasing and Finance Pvt Ltd, Ganesh Shetty, Harish Shetty, and Sanjeeva Shetty, defrauded atleast 1,933 investors of ₹214 crore

MUMBAI: The Bombay high court on Tuesday denied bail to the director of a firm, who has been in jail since 2020, for allegedly defrauding 1,933 investors to the tune of ₹214 crore.

(Anshuman Poyrekar/HT PHOTO)

“Such large-scale mobilisation of funds, in contravention of statutory provisions meant to safeguard the public, significantly increases the seriousness of the case. The prolonged incarceration plea advanced on behalf of the applicant does not tilt the balance in his favour at this stage”, said Justice Amit Borkar while rejecting the bail plea.

The case dates back to 2020, when the accused Jayant Sanjeeva Shetty and his two accomplices, the directors of the firm Shree Ramanjaneya Leasing and Finance Pvt Ltd, were arrested for allegedly accepting deposits from the public under various investment schemes by offering attractive and assured rates of interest, and misappropriating the funds.

In 2013, one of the investors, Sunil Nagpal, was approached by one of the accused, Ganesh Shetty, who introduced him to investment schemes. Subsequently, Nagpal invested ₹1 lakh per month for the next four consecutive months, with an assurance of monthly interest of 1.25%. Between 2013 and 2017, the firm paid him the monthly interest regularly but from December 2017, the Company allegedly stopped paying interest, citing financial difficulties, Nagpal claimed.

In 2018, Nagpal’s investments had matured, and he demanded that the firm return the principal that he had paid, along with the outstanding interest. Nagpal said that Shetty then assured him of the repayment once the immovable properties and hotels of the firm were sold.

In October 2019, when numerous other investors were also agitated for not receiving either the interest or the principal amount, Shetty convened a meeting with them, requesting them to wait till the company could sell their property to acquire funds for the repayment. In the meeting, he asked the investors to wait but he could not assure the repayment, Nagpal claimed in his complaint with the Economic Offences Wing (EOW). The investigation later revealed the larger fraud of ₹214 crore. Subsequently, the firm’s directors, Ganesh Shetty, Harish Shetty, and Sanjeeva Shetty, were arrested.

Recently, Sanjeeva Shetty filed a bail petition citing a prolonged incarceration, which was rejected by the court on Tuesday.

The prosecution stated that from 2012 to 2017, the accused cheated several investors, including Nagpal, by accepting deposits under various schemes, promising high interest, which they failed to meet, highlighting that the firm had duped at least 1,933 investors to the tune of ₹214 crore.

After examining the material on record, the single-judge bench of Justice Amit Borkar observed that the company had no legal authority to take public deposits and said that the firm had no legal authority to accept public money. The court also noted that the firm had issued incomplete or vague deposit receipts, not keeping a proper record of the inflow of money from the investors. This, in turn, could make it easier to divert or misuse the funds, the court said.

Rejecting Shetty’s bail plea, the court said, “In offences involving large-scale public investment, the number of victims and the total financial exposure are not mere statistics; they indicate the scale of the alleged breach of trust and the corresponding risk to the economic security of the public. The prolonged incarceration plea advanced on behalf of the applicant does not tilt the balance in his favour at this stage”.