Appears To Be A Large Scale Scam: Gujarat HC Denies Bail To Businessman Accused Of Duping ₹6,000/- Crore

The Gujarat High Court has denied bail to buisnessman Bhupendrasinh Parbatsinh Zala allegedly involved in a ₹6,000/- scam noting that the scam appears to be large scale.

The Court was considering an anticipatory bail application in connection with the FIR for the offences punishable under Sections 316(5), 318(4) & 61(2) of the Bhartiya Nyaya Sanhita, 2023, Section 3 of the Gujarat Protection of Interest of Depositors (In Financial Establishments) Act, 2003 and Sections 21 and 23 of the Banning of Unregulated Deposit Scheme Act, 2019.

The single-bench of Justice M.R. Mengdey observed, "The investigation carried out so far indicates that the present appears to be a large scale scam committed by the present applicant, wherein the large number of people appear to have been duped by him. Having regard to the same, no case is made out to release the present applicant on bail. Hence, the present application stands dismissed."

The Applicant was represented by Advocate Bhadrish Raju while the Respondent was represented by Public Prosecutor Hardik Dave.

Counsel for the Applicant submitted that there is no averment in the FIR as regard the present applicant having committed any default in payment of any money received towards deposits from the investors till the date of filing of the FIR, and therefore, an offence punishable under the provisions of GPID Act is not made out against the applicant. He submitted that the applicant had received the money from the depositors towards investment and had also promised them of return at the rate of 7% per-annum and accordingly, the applicant herein had continued to repay the amount with the said rate of return to the depositors till the accounts of the present applicant got freezed by the investigating agency and that the applicant has not committed any default in such payments.

He argued that it is the case of prosecution that the present applicant had promised return at the rate of 18% to the depositors, however, the agreement, which had been entered into between the present applicant and the respective depositors, the present applicant had promised return at the rate of 7% per annum and in view of the provision of Section 92 of the Evidence Act, what had been entered into writing between the parties has to be believed and the oral promise made thereafter cannot be made admissible against the present applicant.

He further submitted that the applicant has sufficient arrangement to repay the amount, which has been received by him from various depositors, if the applicant is granted some protection and his accounts are defreezed and is also ready and willing to cooperate with the investigation, if some protection is granted to him.

The Counsel also averred that the present FIR has been lodged against the present applicant by a person, who is a police personnel and none of the victims has come forward to lodge any FIR against the present applicant and that itself is indicative of the fact that the present applicant had not defrauded any of the depositors and had also made repayments of the amounts, which had been received by him towards investment.

On the other hand, the Public Prosecutor opposed the application contending that the present is a case of a systemic fraud played by the present applicant upon various victims as well as upon the State. He submitted that the present applicant had been issued a license for the activity of money lending and on the basis of the said license, the applicant had accepted money from various victims towards deposits and had promised them of returns at the higher rate.

He submitted that the applicant had received total amount of Rs.360 Crores in various bank accounts opened by him in the names of various firms owned and managed by him and the said amounts had thereafter, been transferred to various accounts and ultimately, the said amounts had been withdrawn by the present applicant in cash. He also pointed out that the applicant is not in a position to repay the amount, which had been collected by him from various depositors towards investment.

He contended that the applicant had used the amount, which had been received by him from various persons for his personal use and had purchased the property both the movable and immovable from the said money and urged the court to deny bail stressing that the present is a systemic fraud, which is a tip of the iceberg at present.

The Court agreed with the submissions of the Public Prosecutor and observed that the case appears to be one of a large scale scam.

The Petition was accordingly dismissed.

Cause Title: Bhupendrasinh Parbatsinh Zala vs. State of Gujarat

Appearances:

Petitioner- Advocate Bhadrish Raju, Advocate Tatsat A Bhatt

Respondent- Public Prosecutor Hardik Dave

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