Multi-state investment fraud accused denied bail; Madhya Pradesh High Court says he must first comply with ₹95 lakh repayment proposal

The applicant sought regular bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, corresponding to Section 439 of the Code of Criminal Procedure, 1973, in Crime No. 150 of 2025 registered at Crime Branch, Indore, for offences under Sections 420, 409, 34, 120-B and 201 of the IPC and Section 6(1) of the Madhya Pradesh Nikshepakon Ka Sanrakshan Adhiniyam, 2000.

He had been in custody since 12 October 2025, and his first bail application had been rejected on merits on 9 March 2026.

The prosecution alleged that the applicant induced victims to invest in “Sunrise Guru Capital India, Mumbai” by promising high returns.

After initially returning some amounts with profit, he allegedly transferred investors’ funds, amounting to approximately ₹3,45,48,095, into the accounts of his wife, brother-in-law and sister, and acquired movable and immovable properties in their names.

The applicant was arrested, while the co-accused remained untraceable; a charge-sheet was filed against him with further investigation continuing under Section 173(8) CrPC.

The repeat bail application was based on the applicant’s asserted willingness to pay the entire amount to the complainants.

Two victims objected to bail but subsequently consented to the applicant’s proposal to pay ₹95,00,000 in phases after release.

Whether the applicant was entitled to regular bail in the repeat application after the first bail application had been rejected on merits, particularly on the basis of his proposal to pay ₹95,00,000 to two consenting victims?

Whether the applicant’s criminal antecedents, alleged use of incorrect addresses, risk of absconding, and the continued unavailability of co-accused justified refusal of bail despite the victims’ consent to the proposed payment?

Whether the trial should be expedited by recording the statements of the victims and other witnesses at the earliest?

The Court applied Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, read with Section 439 CrPC, governing the High Court’s power to grant regular bail.

The alleged offences under Sections 420, 409, 34, 120-B and 201 IPC and Section 6(1) of the Madhya Pradesh Nikshepakon Ka Sanrakshan Adhiniyam, 2000 were treated as serious economic and investment-related offences.

In considering bail, the Court took into account the seriousness of the allegations, the applicant’s criminal antecedents, the possibility of absconding, and the risk of interference with or frustration of the ongoing investigation.

The objectors relied on P. Chidambaram v. Directorate of Enforcement, (2020) 13 SCC 791, and Y.S. Jagan Mohan Reddy v. CBI, (2013) 7 SCC 439, concerning the cautious approach applicable to bail in serious economic offences.

The Court further held that the consent of only two victims could not, by itself, justify bail where substantial risks arising from the applicant’s conduct and antecedents remained.

The Court found that the applicant was alleged to have diverted approximately ₹3.45 crore to the accounts of close relatives, who remained unavailable to the Investigating Officer.

His alleged involvement in similar offences in Maharashtra, Andhra Pradesh, Karnataka, Uttar Pradesh and Madhya Pradesh, together with allegedly false or unverified addresses and repeated changes of residence, indicated a substantial risk of absconding.

The fact that the applicant’s relatives and co-accused were still untraceable reinforced the concern that release could impede the course of justice or frustrate recovery of the alleged proceeds.

Although two victims consented to the proposed phased payment of ₹95,00,000, the Court held that such consent did not neutralise the seriousness of the allegations, the criminal antecedents, or the flight risk.

It therefore considered it appropriate that the applicant first comply with the payment proposal and thereafter seek regular bail, rather than granting bail merely on the basis of the victims’ concurrence.

It declined to grant regular bail solely because two victims had consented to the applicant’s proposal for phased payment of ₹95,00,000, in view of the applicant’s alleged criminal antecedents, questionable addresses, absconding risk, and the continued unavailability of the co-accused.

The trial court was directed to proceed on priority and record the statements of the victims and witnesses.

Crime Branch, Indore, was directed to produce the victims and/or adduce the relevant evidence before the trial court.