HC grants bail to four in ₹263-cr TDS fraud case

The court observed that the applicants had spent a considerable amount of time in custody, with no possibility of the trial commencing any time soon

MUMBAI: The Bombay High Court on Tuesday granted bail to Purushottam Chavan, the former husband of an IPS officer, and three others in an alleged ₹263-crore TDS fraud case. The court observed that the applicants had spent a considerable amount of time in custody, with no possibility of the trial commencing any time soon.

Bombay High Court (Anshuman Poyrekar/HT PHOTO)

After the trial court rejected their bail applications on grounds of “serious fraud”, Chavan, along with Bhushan Patil, Tanaji Adhikari and Rajesh Batreja, had approached the high court, seeking bail in connection with an FIR registered against them on January 23, 2022, for criminal conspiracy, breach of trust, forgery, illegal gratification, criminal misconduct, etc.

The Enforcement Directorate (ED) alleged that Adhikari, the then senior tax assistant (later promoted as Inspector of Income Tax), used his senior’s login credentials and RSA token to fraudulently generate 12 TDS orders amounting to ₹263 crore.

Between November 2019 and 2020, proceeds of the crime were credited to the bank account of M/s SB Enterprises, owned by Bhushan Patil. Subsequently, the money was transferred to the personal bank accounts of Patil, Rajesh Shetty, Sarika Shetty, M/s Hotel Velvet Treat Garden and Bar, M/s Raaj Viraaj Global Corporation and other related entities.

During a search operation at Tanaji’s residence in December 2022, it was found that Rajesh Batreja was dealing with Tanaji’s proceeds of crime in India and Dubai, after he was tasked with diverting ₹55.50 crore from Patil’s bank account to various companies.

On the other hand, Purushottam Chavan was also allegedly involved in the illegal dealings between August 2023 and November 2023, and an additional transaction of ₹11 crore.

Counsel for the applicants submitted that they had spent from 18 months to over two years in custody, with no sight of the trial concluding any time soon. They said that Chavan and Batreja are not accused in the scheduled offence, and “their detention in jail for an uncertain period will not serve any purpose”.

On the other hand, special public prosecutor Manisha Jagtap highlighted the magnitude of the offence and submitted that they may try to tamper with the evidence.

Granting bail to the four accused, a single-judge bench of Justice Shyam C Chandak observed that “there is no possibility of the case being heard and disposed of within a year or two”. Quoting that “detention or jail before being pronounced guilty of an offence should not become punishment without trial”, the bench allowed their bail applications after executing a personal bond in the sum of ₹3 lakh each, with one or more sureties of like amount.

The court further directed the four accused to furnish a fresh list of immovable assets owned by them and their family within three weeks, and granted the liberty to the ED to attach all assets in accordance with the law and keep their bank accounts seized.

The court also rejected the ED’s request to stay the bail order to enable the agency to approach the apex court.