Entrustment of investor funds creates a basis for criminal breach of trust allegations; economic offences involving large-scale fraud necessitate close scrutiny and denial of bail.

JUDGMENT :

AMIT BORKAR, J.

1. The present application has been moved by the Applicant/Accused No.2, namely Jayant Sanjeeva Shetty, under Section 4 39 of the Code of Criminal Procedure, 1973, seeking the grant of regular bail. The matter arises out of C.R. No. 2 of 2020 registered with the Economic Offences Wing, Mumbai, which was initially registered as C.R. No. 5 of 2020 with Malad Police Station. The offences alleged against the present Applicant are punishable under Sections 4 06 , 409 and 420 read with Section 120-B of the INDIAN PENAL CODE , 1860 (hereinafter “IPC”) as also under Sections 3 and 4 of the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 (hereinafter “MPID Act”).

2. The prosecution case, in brief, is that agents of M/s. Shree Ramanjaneya Leasing and Finance Pvt. Ltd. (hereinafter “the said Company”) were operating in the area where the complainant resides. Through these agents, popularly referred to as “pigmy agents” the complainant came to know, in the year 2012, about the activities of the said Company.

3. According to the prosecution, the pigmy agents represented to the complainant, one Sunil Nagpal, that the said Company was engaged in the business of financing and mortgaging property. It was further informed that apart from giving loans, the Company also accepted public deposits under various investment schemes, offering attractive and assured rates of interest. The prosecution alleges that the said Company primarily generated income by mortgaging properties and lending against them. For raising the funds required for such lending, the Company accepted deposits of Rs. 1,00,000/- and above from members of the public under investment/deposit schemes. The collected deposits were then used by the Company for advancing loans.

4. It is alleged that one Ganesh Shetty personally approached the complainant and informed him about the investment schemes. He allegedly stated that people from Malad and other areas of Mumbai had invested in these schemes and were receiving guaranteed monthly interest from the Company. Acting on such representations, the complainant invested Rs. 1,00,000/- per month in cash for four consecutive months, totalling Rs. 4,00,000/- with an assurance of monthly interest at the rate of 1.25%. The complainant further alleged that between 2013 and 2017, he was regularly paid the assured monthly interest and, upon maturity, the principal amount. In this period, he claims to have invested a total of Rs. 40,00,000/-. However, from December 2017, the Company allegedly stopped paying interest. When the complainant approached accused Ganesh Shetty, Harish Shetty, and the present Applicant, they are said to have informed him that the Company was facing financial difficulties and requested him to wait.

5. By the year 2018, the complainant’s investments had matured, and he demanded the principal along with the outstanding interest. According to him, the accused assured that they would repay once certain immovable properties and hotel