SACHIN VASANT SHELAR vs. THE STATE OF MAHARASHTRA

Cri.Appln-391 and 223-2019.odt


IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
BAIL APPLICATION NO.391 OF 2019

Mr. Akhilesh Dubey with Mr. Bhushan Bankar with Mr.
Uttam Dubey with Mr. Siddhesh Rajput and Mr. Varad
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Ms. Veera Shinde, APP for the Respondent-State.

JUDGMENT :

the Code of Criminal Procedure, 1973 (‘Code’ for short).

Taha Hafi Kaii (‘Kaii’ for short) have been cited as accused
nos.2 and 1 respectively in Crime No.I-116 of 2018
registered at Chitalsar Police Station, Thane for the ofences
punishable under Sections;
(I) 419, 420, 406, 465, 467, 468, 471, 120B,
171 read with Section 34 of the Indian Penal
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Code, 1860;
(ii) Section 4 of the Chit Funds Act, 1982;
(iii) Section 66D of the Information Technology
Act, 2000;
(iv) Section 3 of the Maharashtra Protection of
Interest of Depositors Act (‘MPID’ for short).

and their date of arrest are as under:

supplementary charge-sheet has been fled against accused
no.3.
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Managing Director of Flintstone Group of Companies;
1) Money Trade Coin Club Private Limited.
2) Flintstone Technology Pvt. Ltd.
3) Ray Afordable Flats and Housing Pvt. Ltd.
4) Orbit Buildcon LLP
5) M.T.Pay Services LLP
6) Flintstone Infracon LLP
7) Flintbeats Enterprises LLP

seminars at Delhi, Pune and Nashik explaining benefts of
investment in crypto currency. One of such seminars held

Delhi on the subject crypto currency. It was attended by the
complainant Pravin Agarwal and his friends. In the said
seminar, Amit Lakhanpal introduced himself as a member
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of Finance Ministry and showed his visiting cards with
national emblem on it. He encouraged the complainant and
other persons to invest in money trade coin (MTC). Amit
Lakhanpal explained and assured that if the coins were

August, 2017, the value per coin would be 1.5 $; and if

September, same would be listed in public crypto currency
exchange and the rate of money trade coin (i.e. MTC) would
be 3 $. He represented that to keep the rates stable at 3 $,
Rs.250 Crores would be kept in fxed deposit and Rs.1750
Crores stand by letter of credit was obtained. He
represented that MTC would be connected to e-commerce
service and the rate would go up to 600 $ in future. That to
win the confdence of the investors, he had shown
correspondence with Government of India, Prime Minister
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office, Finance Ministry for making the crypto currency
legal. He had also promised that investors would be given
visa debit card on which MT coins would be loaded and
same could be used in ATM machine and can be used as
currency. Impressed with attractive investment schemes,
Mr. Agarwal, Complainant visited the office of Flintstone
group of Companies at Thane and invested Rs.10 Lakhs in
Money Trade Coin (MTC).

complainant’s account was opened in MT Pay and MT coins
were transferred in the said account for its maturity in
January, 2018. That instead of returning the said amount,
Amit Lakhanpal had foated another scheme, i.e., coin
deposit ratio, which had, locked-in period, of six months
with 15% returns for six months and 20% returns for
twelve months. In the month of December, 2017, Amit
Lakhanpal and co-accused listed MT coins on Nova
Exchange (virtual coin exchange). Complainant purchased
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MT coins from the said exchange . After few days, rate of
MT coins started declining. When the complainant enquired
about decline in value of MTC, Kaii, Accused No.1 told that
said MT coins were not of their company. Furthermore, a
new scheme by name, MTC Banque and new exchange by
name MTCX India were foated. Complainant and others
invested in the coin on assurance that rate of coin would be
increased to 6 $ per coin. Due to this hope was generated
within the complainant and others to make further
investments in another plan with Cypto Zananiya. At this
time, value of MT coins had gone up, substantially but at
the same time service of withdrawal of money or sale of
money trade coin was stopped. Investigation revealed that
Amit Lakhanpal and co-accused consciously manipulated
rate of MT coins. Thus, it is to be stated that accused Amit
Lakhanpal and co-accused lured people into investing
money with false promise of heavy returns. To, say,
investors were neither paid returns nor returned principal
amount nor were permitted to trade in MTC. Thus, by
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gaining trust of the complainant and other investors, they
made them to invest in their money trade coin crypto
currency by foating various schemes, plans called
Cryptoiananiya. It is crypto currency wallet service, where
investors can deal in money trade coin and bitcoin on MTCX
Capital India for their fnancial transactions.

deep routed conspiracy and involving huge loss of
investors’ money. Thus, it appears, Amit Lakhanpal with the
active assistance and in collusion with the applicants, who
are before this Court, collected huge amount of Rs.113
Crores from ffteen thousand investors and siphoned of
from various accounts.

June, 2018. Charge-sheet has been fled against them,
however, further investigation is underway.
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Shelar, would contend that Shelar was working under the
authority of Amit Lakhanpal as his employee and was not
involved in decision making process nor had control over
the day-to-day afairs of the group of companies led by
Amit Lakhanpal. The learned counsel would contend that
the penal provisions of the MPID Act have been incorrectly
invoked, in-as-much as, provisions of Section 2(c)(viii) of the
MPID Act takes away from its purview any amount received
by way of subscription in receipt of chit. He would rely on
provisions of Section 2(d) of the Chit Funds Act, 1982. Mr.
Pradhan would, therefore, submit that if provisions of Chit
Funds Act, 1982 are applied, it excludes, provisions of MPID
Act. His next submission is that there is no evidence at all
to indicate or even to suggest that applicant-Shelar is
benefciary of any amount allegedly siphoned of by Amit
Lakhanpal or other directors of the company. It is submitted
that Shelar is salaried employee and all throughout his acts,
commission and omissions were at the command, of Amit
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Lakhanpal. It is further submitted that the investigation is
over and trial may not commence in near future. However,
presence of the applicant-Shelar can be secured for the trial
by imposing suitable conditions. Learned counsel would
submit that since prosecution’s case is based on
documentary and electronic evidence and since all
electronic devices are seiied, possibility of tampering
evidence stands excluded and ruled out. Mr. Pradhan
would, therefore, urge that the applicant be released on
bail.

and Kaii by fling affidavit of Mr. Nitin Thakre, Senior Police
Inspector attached to Crime Branch Unit-I, Thane. Ms.
Shinde, the learned Additional Public Prosecutor has taken
me through the charge-sheet and pointed out role
attributed to the applicants and their complicity in the
subject crime.
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employee of the group of companies led by Amit Lakhanpal
but he is director in the following six companies:
(1) Flinstone Technology Pvt. Ltd.
(2) MT Pay Services Pvt. Ltd.
(3) Money Trade Coin Pvt. Ltd.
(4) Flinstone Infracon LLP
(5) Orbitcon LLP
(6) Flinstone Enterprises Pvt. Ltd.
Office of the Registrar of Companies has supplied the
aforesaid information, which is also placed on record along
with the affidavit. In view of this fact, the contention of Mr.
Pradhan that accused Shelar was an employee at the
command of Amit Lakhanpal is incorrect. Therefore, at the
frst place, the applicant Shelar has not approached this
Court with clean hands.

registration of the subject ofence, accused Shelar fed to
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Dubai. There is material on record to suggest that the Amit
Lakhanpal and Shelar purchased the air tickets from one
agency and statement of employee of the said agency
fortifes this fact.

the complicity of the applicant Shelar, has relied on the

June, 2018. Mr. Chetan Thakkar Angadia is in the business
of courier serice. His statement reveals that in November,
2017, he was introduced by one Mehul to applicant Shelar
and at the instance of Shelar, Chetan Thakkar had
collected, cash around Rs.4 Crores in between November,
2017 to February, 2018 from diferent cities across the
country and at his instance handed over/delivered the cash
to co-accused Bangera, Tushar Joshi and other persons. Mr.
Thakkar stated at the instance of the applicant Shelar, he
had delivered cash at the office of Flinstone Group at thane.
In support of the statement, Chetan Thakkar has produced
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the register. It is part of affidavit. I have perused it. (Page
269, 286). This register shows, particulars of persons across

wherefrom he had collected cash. I have no reason to
disbelieve and discard the statement of Chetan Thakkar
and the entries in register, maintained regularly in the
course of business, which in clear terms shows complicity of
the applicants in the subject crime. In this regard, further
investigation is on going and Shelar is the only person, who
can explain from whom and for what purpose, huge cash
was collected through Angadia and where the cash is lying

another investor clearly discloses complicity of both the
applicants. In his statement, he has given clear account as
to how he was lured by Amit Lakhanpal to invest
Rs.1,10,000/- in money trade coin, a crypto currency and
other such schemes and wallets foated by the group of
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companies. He would say that as and when he visited
office, the applicants were found present. It may be stated
that this witness was assured defnite returns on
investment in money trade coin and his confdence was
won by showing forged stand by letter of credit issued by
the HSBC Bank against the fxed deposits. This letter of
stand by credit turned out to be a forged document as

Senior Police Inspector by the HSBC Bank. Bank disowned
the said document.

further relied on statement of Amit Kumar Panigrahi to show
complicity of accused Kaii. Though it is contended by the
learned counsel for the accused Kaii that Kaii was an
employee of the group of companies led by Amit Lakhanpal
but the evidence is otherwise.

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August, 2018 stated that in the year 2017, accused Kaii
had appointed him as PHP Developer and instructed him to
develop two web-sites namely MTCX India.com and MTCX
India.in. These web-sites were required by Amit Lakhanpal
for trading in the crypto currency. Accordingly, this witness
developed these two web-sites, through which investors
were investing the money in the schemes foated by Amit
Lakhanpal and the co-accused. This witness stated in detail
how the schemes were operated through these two web-
sites to which accused Mr. Kaii had complete access.
Statement of this witness suggests, technical changes in
the two web-sites were frequently made at the instance of
Kaii and he had complete control over the rate of crypto
currency. This witness said/stated, that Kaii was possessing,
a software through which he was able to infate and defate
rate of crypto currency. Ms. Shinde, the learned Additional
Public Prosecutor has also relied on the statement of one
Akash Solanki, who does the business of advertising. His
services were hired for promoting the business of money
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trade coin and MTCX India company on social media. It is
his statement that in October, 2017, Amit Lakhanpal asked
him to make graphics of ten web-sites, developed by Kaii.

applicant Kaii, was handling technical operations right from
developing web-sites, designing logo and graphics including
online registration of investors. This accused used to open
accounts of investors with MTCX and issue the unique id to
the investors. His close association with Amit Lakhanpal is
also evident from the statement of one Vilas Mohite, who
said his office premises were given to Group of Finstone
Technologies Private Ltd under the registered leave and
licence agreement with accused Kaii. Statement of Akash
Solanki revealed that Kaii had given contract of graphical
design of web-site to him. Besides, the evidence also
suggests, he had designed and created MT Pay mobile
application and two web-sites, which is evident from the
panchanama relating to the downloaded data of the web-
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sites. Thus, to be stated, Kaii was not just, on the pay-roll of
Lakhanpal. A fact cannot be overlooked, that Kaii lent
complete technical support to companies and for trading in
MTC. It is apparent from the statements of witness, that
Kaii had an access to system and was instrumental in
manipulating the rates of MTC crypto currency. Had he been
just an employee of Amit Lakhanpal, defnitely, he would
not have given free hand and access to system, to Kaii.

mobiles, lap-tops of both the accused were seiied and
forwarded for digital forensic audit and the reports are
awaited.

accounts were seiied of which the forensic audit is sought.

2020.
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is concerned, further investigation has revealed that he was
authorised signatory to operate the bank accounts of the
Finstone Technologies Private Ltd, Money Trade Coin Club
Private Ltd.

Prosecutor has relied on the account opening forms, which
show, accused Shelar was signatory no.3 so far as Finstone
Technologies Private Ltd.’s bank account is concerned.

were not sheer employees of the group of companies and
working at the command and under authority of Amit
Lakhanpal but the evidence shows, they were active at all
the stages right from foating schemes, developing web-
sites, monitoring the rate of crypto currency, activating
investors’ accounts, blocking their accounts and collection
of cash from diferent persons across the country and its
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appropriation, as has been disclosed by Mr. Chetan Thakkar.

Report of “eighty bank” accounts is awaited. Once, that
report is received, investigating agency may be able to
trace the trail of money. Today, it cannot be said that
applicants are not benefciaries of the money siphoned of.
In fact, looking at their role in the entire process right from
attending seminars, foating schemes, web-sites, collection
of cash, controlling rate of crypto currency, it is unlikely that
they were not benefciary of the amount siphoned of from
eighty-two bank accounts of companies. Evidence shows

web-sites of the company vii. Mtcxindia.com,
wallet.moneytradecoin.com and MT pay wallet about 15810
investors have invested either through MT Pay/ MTCX or
Banque UK or Cryptoianania schemes and the wallets
foated by group of companies. There are about 45,000
investors and database analyie panchanama shows about
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15,810 investors had invested about Rs.113,10,36,551/-.
Evidence also shows, money, hard discs, mobile phones,
pen-drives, lap-tops, CPUs were seiied from personal
search and from the offices of the companies and digital
forensic report in respect of 104 electronic and support
devices is awaited. Evidence also suggests, money invested
by 15,810 investors around 113,10,36,551/- has been
diverted in the companies established in countries say
Poland, England, Harju County, Dubai-UAE, Switierland.
Therefore, taking cue from the material surfaced in
investigation, investigating agency is in the process of
invoking the provisions of 166A (letters regotary) of the
Code of Criminal Procedure, 1973, for which necessary
correspondence has been made with the Director General
of Police.

facie, material on record shows absconding key accused
Amit Lakhanpal and applicants committed the subject crime
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with minute planning and deliberate design. Herein,
Forensic Audit Report (of eighty-two bank accounts) and
digital forensic report of 104 electronic devices is awaited.
Report in respect of the support devices (like pendrive, hard
disks, etc.) would, provide, further and more inputs-
particulars, including money trail. In addition, investigation
relating to investment in foreign countries, if any, is in
progress. Thus, having regard to role of applicants’ surfaced
in the investigation, if they are released, further
investigation will surely be infuenced. Equally, whereabout
of key accused is not traced. Thus, though investigation
(partly) is over, chances of tampering prosecution evidence
at the hands of applicants cannot be ruled out.

Section 2(d) of the Chit Funds Act and Section 2(c)(vii) of
the MPID Act being mutually exclusive, prosecution could
not have applied or invoked it simultaneously, it may be
stated that in appropriate proceedings and at appropriate
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time, applicants may raise this contention.

above be construed as expression of opinion for the
purpose of bail only and the same shall not in any way
infuence the trial in other proceedings.
(SANDEEP K. SHINDE, J.)
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