Delhi High Court denies bail to accused in ₹30-crore investment fraud involving 159 victims across 56 FIRs

The applicant, Managing Director of the concerned company, sought regular bail in FIR No. 267/2018 registered at P.S. EOW for offences under Sections 406, 420, 120B, 467, 468 and 471 IPC.

The prosecution alleged that the applicant and co-accused operated investment schemes by inducing investors to deposit money on false assurances of high returns and allotment of plots or flats, while falsely representing that their companies were authorised by SEBI and registered as NBFCs with the RBI.

The applicant was allegedly involved in 159 complaints forming part of 56 FIRs across several States, involving more than ₹30 crore.

Pursuant to the Supreme Court’s directions in W.P.(Crl.) 394/2024, the FIRs were merged State-wise, with the earliest FIR in each State treated as the lead FIR and the remaining FIRs treated as statements under Section 161 CrPC.

The applicant had been in custody since 2020; the chargesheet had been filed and the case was listed for consideration of charge on 11 September 2026.

Seven co-accused Directors had been declared proclaimed offenders and remained absconding.

The Court also noted that SEBI had directed the applicant and his company to wind up the collective investment scheme and refund investors, but the direction was not complied with.

The Court applied the statutory framework under Sections 406, 420, 120B, 467, 468 and 471 IPC, involving criminal breach of trust, cheating, criminal conspiracy, and forgery-related offences, some of which are punishable with imprisonment extending to life.

It applied the general judicial discretion governing regular bail, balancing the seriousness and magnitude of the alleged offences, the prima facie circumstances, the stage of the proceedings, and risks arising from the accused’s circumstances.

The Court further recognised that large-scale economic offences causing extensive harm to investors and the wider economy cannot automatically be treated on the same footing as ordinary offences.

The Court also considered the effect of the SEBI direction requiring winding up of the scheme and refund of investors, as well as the Supreme Court’s directions for consolidation of the FIRs.

The Court held that the allegations disclosed a large-scale investment fraud involving 159 victims, 56 FIRs and an amount exceeding ₹30 crore.

The alleged schemes involved assurances of plots, flats or repayment with interest, while investors were allegedly induced to part with their money through false representations regarding regulatory authorisation.

The Court considered the offences particularly serious because they allegedly caused widespread financial harm and were punishable with imprisonment extending to life.

It also relied on the applicant’s failure to comply with SEBI’s 2014 direction to wind up the scheme and refund investors, despite dismissal of the appeal against that direction in 2018.

Although the applicant had been in custody since 2020 and the chargesheet had been filed, the Court found that the matter had reached the stage of consideration of charge and that the continued abscondence of seven co-accused was a relevant circumstance.

The applicant offered no explanation for the operation of the alleged schemes or any concrete proposal for refunding the investors.

The Court clarified that it was not acting as a money-recovery forum, but held that, in the circumstances, release on bail could convey that a person could retain crores obtained from cheated investors after spending a few years in custody.

The application was accordingly dismissed, and a copy of the order was directed to be sent to the concerned Jail Superintendent for immediate communication to the applicant.