HC refuses pre-arrest bail to city builders in ₹481.65-crore loan case

The Bombay High Court denied anticipatory bail to three directors of Ecstasy Realty, facing investigation for failing to repay ₹481.65 crore in loans.

MUMBAI: The Bombay High Court last week refused anticipatory bail to three directors of city-based construction firm Ecstasy Realty Private Limited (ERPL), who are being investigated by the Economic Offences Wing (EOW) of the Mumbai police for allegedly failing to repay debenture loans worth ₹481.65 crore.

HC refuses pre-arrest bail to city builders in ₹481.65-crore loan case

Justice N R Borkar rejected the pre-arrest bail pleas filed by Shobhit Ranjan and his co-directors Pulin Bole and Shivani Verma, observing that custodial interrogation was necessary to investigate the alleged diversion of funds.

“Considering the facts and circumstances of the case, I am of the view that custodial interrogation of the applicants is necessary for the purpose of investigating the substantial diversion of funds,” the court said.

However, the court extended the interim protection from arrest granted to the trio in July 2025 to allow them time to approach the Supreme Court seeking pre-arrest bail in the case.

The FIR, registered at the Juhu police station in June 2025, was based on a complaint filed by Edelweiss Asset Reconstruction Company Limited (Edelweiss ARC).

According to the complaint, in 2018 ERPL had approached ECL Finance Ltd to raise funds through debentures for the development of a residential project in Andheri West comprising two phases- Parthenon and Raiaskaran.

As part of the arrangement, ERPL issued 600 non-convertible debentures (NCDs) of face value ₹1 crore each. Of these, 450 debentures were subscribed to by Edelweiss Group companies, while the remainder were taken up by individual investors.

Edelweiss ARC alleged that although ERPL repaid ₹142.65 crore to debenture holders in March 2022, no further payments were made either towards the principal or interest. Despite repeated reminders, the outstanding amount of ₹481.65 crore remains unpaid, the complaint stated.

Seeking anticipatory bail, Ranjan and the other directors argued that the dispute was essentially civil in nature, arising out of alleged violations of contractual provisions under the Debenture Trust Deed.

They further contended that Edelweiss ARC had acquired the debentures from third parties and therefore had no direct contractual relationship with ERPL, making the FIR unsustainable.

The directors also submitted that Edelweiss ARC had acquired the NCDs in two tranches in 2023 after conducting due diligence and had not raised any concerns about misutilisation of funds at the time.

Bole and Verma, in their submissions, stated that they were non-executive directors and had neither been accused of siphoning funds nor received any money in their personal bank accounts.

Opposing the anticipatory bail pleas, the public prosecutor and counsel for Edelweiss ARC argued that the loan funds had been diverted to group entities and used for purposes unrelated to the project, including investment in a fisheries business and repayment of loans of a sister concern and those allegedly taken by Ranjan.

After examining the material on record, the court found merit in the prosecution’s arguments.

“Prima facie, it appears that a substantial amount from the said funds was diverted to the applicants’ personal accounts, shell company accounts incorporated by the applicants for layering siphoned funds, as well as utilised for repaying undisclosed third-party borrowings,” the court observed while refusing relief to the three directors.