Bombay High Court Rejects Bail for Milind Sawant Over Alleged Large Scale Financial Scam - 2025-09-04

Bombay High Court Rejects Bail for Milind Sawant Over Alleged Large Scale Financial Scam

The High Court of Bombay, presided over by Justice Amit Borkar, has denied a bail application filed by Milind Satish Sawant, who faces serious allegations of orchestrating a large-scale financial fraud. The case, originating from the Bhandup Police Station, involves accusations of cheating and criminal breach of trust, falling under both the Indian Penal Code ( IPC ) and the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 (MPID Act).

The Anatomy of an Alleged Investment Fraud

The prosecution’s case centers on the operations of "Mars Finance" and "Mars Finnmart." The applicant allegedly enticed investors, including the complainant, with promises of monthly returns of 5% to 10% through stock and mutual fund trading. The scheme reportedly involved convincing victims to secure bank loans, with the accused promising to manage the installments and distribute the remaining profit.

According to the complaint, investors provided substantial funds, yet the promised returns failed to materialize. The investigation highlights that approximately 127 investors were allegedly defrauded of over ₹7 crores. When investors sought their dues, the accused had reportedly absconded and locked their establishment.

Legal Contention and Jurisdiction

A primary point of contention raised by the defense was the jurisdiction of the Designated Court under the MPID Act. The applicant’s counsel argued that the Designated Court was limited to trying offences under the MPID Act and lacked the authority to adjudicate general IPC offences. They further suggested that this consolidation of charges would deprive the accused of a valuable appellate forum, raising concerns regarding constitutional rights under Articles 14 and 21.

The State, represented by the learned Assistant Public Prosecutor, maintained that the designation of a Sessions Court under the MPID Act does not diminish its inherent powers under the Code of Criminal Procedure, 1973 .

Key Observations

The Court clarified the legal landscape regarding the powers of the Designated Court, noting:

> "The Court of Session, once designated under the MPID Act, does not lose its original identity as a Court of Session under the Cr.P.C. It continues to remain a Sessions Court, possessing all powers vested in it by the Code, and, in addition, it also acquires the special jurisdiction conferred upon it by the MPID Act."

Regarding the nature of the economic offence, the Court observed:

> "The Supreme Court has consistently held that economic offences involving deep-rooted conspiracies and massive diversion of public money stand on a different footing, since they seriously affect the economy of the nation and corrode the trust of the common man in financial systems."

The Court also addressed the argument regarding the definition of 'deposit':

> "Any money received by a financial establishment under any scheme or arrangement, which promises return in cash or in kind, qualifies as a 'deposit.'"

The Verdict and Its Impact

In its final order, the High Court emphasized that the gravity of the offences and the applicant’s history of similar legal disputes necessitated the denial of bail. The Court ruled that the Designated Court holds full competency to try IPC offences intertwined with MPID Act violations, noting that separating these proceedings would lead to an impractical multiplicity of trials and judicial inefficiency.

By rejecting the bail application, the Court has affirmed the robustness of the judicial process in handling complex financial scams, prioritizing the protection of public interest and the integrity of the financial system over the immediate relief of the accused. The decision reinforces that in instances of organized financial fraud, the individual right to liberty is balanced against the broader necessity of ensuring a fair and comprehensive trial.