HC grants bail to VGN Jewellers’ directors arrested in ₹620 cr fraud

Bombay High Court grants bail to elderly couple, aged 80 and 76, in ₹620 crore investment fraud case, citing their age, health, and prolonged incarceration.

MUMBAI: The Bombay high court on Monday granted bail to an elderly couple, aged 80 and 76, arrested in connection with an alleged investment fraud of ₹620 crore. The couple, directors of VGN Jewellers, were incarcerated for over 3 years and got relief from the court primarily in view of their age and medical conditions.

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The court emphasised that their prolonged incarceration, coupled with their advanced age and health conditions, justified bail. While recording the gravity of the charges, it observed that the case largely pertained to cheating rather than criminal breach of trust.

Veerath Gopalan Nair (80) and his wife, Valsala Gopalan Nair (76), were directors of VGN Jewellery Private Limited and VGN Chit and Finance Company Private Limited. They were accused of floating various investment schemes to lure investors by offering them gold jewelleries and cash with high returns. The couple allegedly mortgaged 66 kg gold for ₹25 crore with the Federal Bank, and later, sold it to other jewellers, subsequently diverting huge funds into their personal savings accounts.

Following an FIR, they were arrested on October 5, 2021, and June 7, 2022, respectively, by the Economic Offences Wing (EOW) of the Thane police, under charges of criminal breach of trust, cheating and fraud for running the Ponzi scheme. Initially, 13 people from the Thane district had registered complaints with the Kolsewadi police station in Kalyan, alleging that they had collectively been cheated to the tune of ₹7.99 cr. The EOW had subsequently taken over the probe and arrested the couple.

According to the EOW officials, from 2006 to 2021, the accused lured their customers into investing money in a variety of schemes promising impossibly high returns. They had jewellery stores in Dombivli, Ulhasnagar and Mulund as well as a finance company in Kalyan, which were all allegedly used in the offence. The accused allegedly used the money received from new investors to pay the old ones.

Advocate Abhishek Yende, representing the couple, submitted that despite the FIR, the business provided high returns to the investors, negating any intention to defraud them. He further highlighted their old age and medical conditions, urging the court to grant them bail.

On the other hand, additional public prosecutor Sukanta Karmakar contended that the business, with a total of 32,640 investors, duped several of their hard-earned money. He argued that the couple deliberately misused the funds and siphoned off the investors’ money into their own bank accounts.

A single-judge bench of justice Milind Jadhav observed that the seriousness of the charge vis-a-vis severity of the punishment should be taken into consideration before arriving at a decision. It highlighted that the allegations point towards cheating rather than criminal breach of trust and found no evidence against Valsala.

Moreover, considering that the couple has already undergone imprisonment of three years and 2 years respectively, the court granted bail to them. “There is no possibility of the trial commencing in the near future,” it stated. Highlighting their old age and medical conditions, it found their incarceration unwarranted.