The Bombay High Court has directed a sessions court to return a sum of Rs 59 crore with interest deposited by Vyomesh Shah, owner of a real estate firm who is accused in a fraud and embezzlement case.
Former NCP MLA Ramesh Kadam is also an accused in the case. Kadam, who is in jail, has been accused of diverting funds from a Maharashtra government body to acquire a realty firm in which Shah had some stake.
In February last year, a city sessions court, while granting bail to the realtor, had ordered him to deposit a sum of Rs 59 crore.
Shah, owner of Hubtown Ltd (previously known as Akruti City Ltd), this year, approached the HC seeking quashing of the condition imposed by the sessions court. In his petition, Shah also sought a direction to defreeze the bank accounts of his firm.
After hearing the petition, a division bench of Justices R V More and P D Naik on November 10 accepted the contentions raised in the plea.
“It appears that arrest of the petitioner was not necessary and the conditions of bail are excessive, which are hereby quashed and set aside.
“We direct the Respondents and Registrar of Sessions Court to return to the petitioners the monies deposited by him along with interest accrued thereon,” the HC said.
“From the record before us it does not appear at this stage that the petitioner had knowledge about the motives or intentions of Ramesh Kadam and his allies.
“The petitioner seems to be only unfortunate victim of the circumstances as it is apparent that they have entered into pure commercial transaction, which is valid and legal in the eyes of law and not benami or illegal transaction as alleged,” the court said in its order.
The bench also noted that in a case of cheating, the sessions court cannot go on to recover the alleged amount while granting bail.
“Courts are expected to put reasonable conditions in exercise of judicial discretion and such conditions should be aimed at securing the presence of the accused at the time of trial and he should not hamper the evidence or prosecution witnesses during pendency of trial.
“The court is not expected to recover the amount in criminal proceedings by putting condition to deposit money while granting bail,” the judges said.
Shah, in his petition, claimed he got acquainted to Kadam only in November 2014 when the latter sought to acquire a company, Comral Realty Pvt Ltd, in which Shah had some control and also an 800 square yards plot of land in Peddar Road, south Mumbai, owned by this firm.
The property at Peddar Road was acquired by Hubtown in 2010. “In the similar fashion it has been transferred to Ramesh Kadam. We see no illegality in the manner of transfer of shares of Comral Realty Pvt Ltd,” the court said.
Shah’s lawyer Aabad Ponda argued that Shah was arrested only to recover the amount allegedly misappropriated by Kadam.
Shah had no role to play in the offence of misappropriation, cheating and forgery committed by Kadam and the petitioner cannot be made to lose the land as well as the money, he told the court.
The HC, after perusing the facts of the case, observed that the petitioner as well as Hubtown were into the business of real estate for many years and there were attempted made in the past to sell the land at Peddar Road.
“We are, therefore, not inclined to believe that the petitioner has hatched a conspiracy with common intention to cheat the Corporation (a government body for Matangs) or to misappropriate its funds,” the court said.
According to the state CID, Shah, arrested in February last year, had created a subsidiary company that allegedly received money routed through three cooperatives set up by Kadam.
Kadam was arrested in August 2015 for allegedly misappropriating funds from the Sahityaratna Lokshahir Annabhau Sathe Development Corporation, the government body set up for welfare of the Matang community. Kadam is a former chairman of the corporation.
According to the CID, the money that Shah received for his subsidiary company was part of the at least Rs 250 crore Kadam allegedly siphoned off from the corporation.