Gujarat High Court: In an anticipatory bail application filed by businessman Bhupendrasinh Parbatsinh Zala under Section 4821 of the Bharatiya Nyaya Sanhita, 2023, a Single Judge Bench of M.R. Mengdey, J., denied the application holding that according to the investigation done so far, it appeared that a large-scale scam was committed by Bhupendrasinh wherein a large number of people had been duped by him.
Background
The Home Department, Gujarat had received an anonymous application against Bhupendrasinh for committing financial fraud. Based on this application, a preliminary inquiry was carried out by the Criminal Investigation Department (‘CID’), wherein Bhupendrasinh was summoned but he did not present himself.
Subsequently, a raid was conducted at a place belonging to Bhupendrasinh by the CID. In this raid, it was discovered that Bhupendrasinh had created several firms, out of which only two entities were registered companies, rest were non-registered organizations. Additionally, several bank accounts were opened in the names of these entities. The record indicated that a license for money lending was issued by the authority concerned to Bhupendrasinh.
Thereafter an FIR under Sections 316(5)2, 318(4)3, and 61(2)4 of Bharatiya Nyaya Sanhita, 2023, Section 3 of the Gujarat Protection of Interest of Depositors (In Financial Establishments) Act, 2003 (‘the GPID Act’), and Sections 21 and 23 of the Banning of Unregulated Deposit Scheme Act, 2019 (‘the 2019 Act’).
Analysis
The Court noted that on the basis of the money lending license, Bhupendrasinh approached various depositors stating that he had been authorized by the State Government to receive deposits from the public and promised them returns at 18 percent per annum.
The Court further noted that so far, Bhupendrasinh had received approximately Rs 360 Crore. After receipt of such amounts, he continued to repay till 2022 when he started defaulting on payments. Noting this the Court rejected the contention that no defaults were committed by Bhupendrasinh till registration of the FIR and the offences under the GPID Act were not made out against him.
Regarding the contention that no depositors had come forward to lodge any FIR against Bhupendrasinh, the Court stated that the fact remained that he had defaulted in repayment of deposit amounts since 2022.
The Court highlighted that the record indicated that the deposit amount had been used by Bhupendrasinh for personal use and purchase of movable as well as immovable property. As per the record, he was running an educational institution named Grow More Foundation Trust, which received Rs 81 Lakhs as a grant from the State Exchequer. Out of the 81 lakhs, 75 lakhs were transferred to the account of BZ Profit Plus Advisors (‘BZPPA’), one of the non-registered entities owned by Bhupendrasinh, and thereafter, utilised for personal use.
Further, the Court acknowledged that Bhupendrasinh had also obtained a loan of Rs.10 Crore from the Unity Small Bank for renovation work of the educational institution. The majority of this loan amount was transferred to BZPPA. The Court also noted that the record indicated that Bhupendrasinh issued cheques worth Rs 62 Lakhs in the name of his driver.
The Court stated that the investigation carried out so far indicated that there was a large-scale scam committed by Bhupendrasinh wherein it appeared that a large number of people had been duped by him.
Noting the aforesaid, the Court held that no case was made out for the grant of bail and dismissed the application.
[Bhupendrasinh Parbatsinh Zala v. State of Gujarat, 2024 SCC OnLine Guj 4301, decided on 23-12-2024]
Advocates who appeared in this case:
For the applicant: Bhadrish Raju and Tatsat A Bhatt
For the respondent: Public Prosecutor Hardik Dave
1. Section 438 of the Code of Criminal Procedure, 1973
2. Section 409 of the Penal Code, 1860
3. Section 420 of the Penal Code, 1860
4. Section 120B of the Penal Code, 1860
