The Bombay High Court recently rejected an anticipatory bail application by practicing advocates accused in an investor fraud case, holding that promises of abnormally high profits in share trading (10-15% per month) indicate a prima facie dishonest intention from the very outset. Justice Amit Borkar observed that such guarantees, being unrealistic in any genuine or lawful business, cannot be treated as mere puffery but reveal criminal liability.

Facts:

The case arises from a complaint by one advocate who invested ₹30 lakh in intra-day share trading, induced by assurances of monthly profits of 10-15%. The accused had initially paid ₹4 lakh as profit, and had also issued a security cheque for ₹25 lakh; but later failed to return the remaining sums as promised.

The Applicants asserted that the dispute was essentially civil in character, stemming from professional rivalry in the law firm they had co-founded with the complainant, and further contended that they had already repaid an amount exceeding the alleged investment. They maintained that the complainant had invested with full knowledge of the trading risks involved and that no dishonest intention could be attributed to them.

The court rejected the anticipatory bail plea, finding that the material before the Court disclosed elements of criminal offence beyond a mere breach of contract. The Court emphasized that inducements promising such high and guaranteed returns are inherently impossible to fulfill and manifest dishonest intention at inception.

The bench further noted that the way money was collected by the accused, the conduct in failing to return investments, the assurance of profit, and the subsequent attempt to avoid repayment together disclosed fraud at its inception. Such “assurances that no genuine business can guarantee” made out prima facie criminal liability under the relevant provisions (cheating) rather than only a civil wrong.

“The law recognises that every breach of contract does not amount to cheating. However, when dishonest intention exists at the inception and inducement is made with false promises that cannot be realistically fulfilled, the offence of cheating is attracted.” the bench stated.

Furthermore, the Bench took serious note of the fact that both parties were, in essence, practicing advocates. The record further revealed that Applicant No. 2 had admittedly issued a notice to the informant, acknowledging payment of Rs. 26.32 lakhs towards “liaisoning work” at the office of the Revenue Commissioner and before the Revenue Minister. The Court observed that engaging in such “liaisoning work” with authorities not only violates the provisions of the Advocates Act, 1961 but also amounts to professional misconduct and thus aggravates the seriousness of the matter.

Additionally, the investigation paper also revealed that apart from the present informant, four other persons have made similar allegations against the applicants, involving substantial amounts, thus making this part of a larger scheme.

Ultimately, considering the magnitude of the amounts involved, the number of victims, and the necessity of ascertaining utilization of funds, custodial interrogation of the applicants is necessary and thereby the anticipatory bail application was rejected.

Case Title: Rupali Bapurao Jadhav & Anr. v. State of Maharashtra., ABA/2042/2025

Advocates for Applicants: Mr. Shailesh Kharat with Mr. Bharat Shinde, Mr. Sumitkumar Nimbalkar, Mr. Parthraj Ware, Ms. Neha Rathod i/by Mr. Govind Mundhe

Advocates for Respondent: Mrs. Mahalakshmi Ganapathy, APP

Intervenor: Mr. Chaitanya Pendse i/by Mr. Rohan Hogle