CRLP/10934/2026 of S. Rajani Nanavath, Vs The State of Telangana, on 25 August 2026

ORDER:

This petition is filed under Section 482 of Bharatiya Nagarik Suraksha Sanhita, 2023 (for short, “BNSS”), seeking the relief of anticipatory bail.

2. The petitioners are arrayed as Accused Nos.5, 7 to 9 in FIR No.66 of 2026 on the file of EOW police station, Cyberabad for the offences punishable under Sections 318(4), 316(2), 3(5) of the Bharatiya Nyaya Sanhita, 2023 (for short, “BNS”) and Section 5 of Telangana Protection of Depositors and Financial Establishments Act, 1999 (for short “TSPDFE Act”).

3. Heard Mr. Allam Ramesh, learned counsel for the petitioners, and Mr. Syed Yasar Mamoon, learned Additional Public Prosecutor, appearing for the respondent-State.

4.1. The prosecution case, in brief, is that the complainant lodged a report against the accused persons associated with Shares Bazar Private Limited (SBPL) and Kisan Parivar Limited (KPL), alleging that, by making false representations and promising high monthly returns, they induced the complainant, his family members, and several other investors to part with substantial sums of money. It is alleged that Accused No. 1, the promoter and Managing Director, represented that SBPL was a SEBI-registered entity engaged in algorithm-based stock trading, while KPL was represented as being engaged in organic farming. On the basis of such representations, the complainant and his family members entered into MoUs with the said companies and invested a total sum of Rs. 1.92 crores, against which an amount of Rs. 2.42 crores was allegedly acknowledged as outstanding as on 31.05.2026.

4.2. It is further alleged that several investors, including serving and retired defence personnel, also invested substantial amounts, bringing the total alleged investments made by the complainant, his family members, and other victims to approximately Rs. 4.51 crores. It is alleged that, from September 2025 onwards, Accused No. 1

represented during Zoom meetings that the payments were being withheld on account of the proposed IPO of KPL and the due diligence allegedly being undertaken by the merchant bankers. However, the proposed IPO did not materialise, and, from October 2025, the accused allegedly stopped making the promised monthly payments and failed to return the invested capital even after expiry of the stipulated lock-in period. Consequently, the complainant alleged that the accused had made false representations with dishonest intention, thereby inducing the investors to part with their money, and thereafter misappropriated the funds, thereby committing offences of cheating, criminal breach of trust, and financial fraud. On the basis of the complaint, a crime was registered.

5.1. Learned counsel for the petitioners submits that the petitioners have been falsely implicated and were never involved in the management or day-to-day affairs of the company. The alleged investments were made pursuant to written investment agreements, and dividends/returns were regularly paid to the complainant and other investors until the last quarter of 2025. The subsequent delay in payment, according to the petitioners, resulted from business losses and financial difficulties and, by itself, neither constitutes cheating nor establishes dishonest intention at the inception of the transactions.

5.2. It is further submitted that the allegations of inducement and representations are principally directed against Accused No. 1, with no specific overt act of inducement, cheating, receipt, or diversion of funds attributed to the petitioners. Their implication is allegedly based only on their designation as Directors of the concerned entities or their relationship with Accused No. 1. There is no allegation that the petitioners personally received the invested amounts, operated the relevant bank accounts, diverted funds for personal benefit, or derived any unlawful gain. Mere designation or relationship, absent specific allegations constituting the offences and establishing the requisite criminal intent, cannot fasten criminal liability upon them.

5.3. Learned counsel further submits that the allegations substantially rest on documentary and electronic evidence, including investment agreements, Memoranda of Understanding, bank and company records, and electronic communications, all of which can be secured and examined by the Investigating Agency without custodial interrogation. No recovery is required from the petitioners; hence, their custodial detention is neither necessary nor justified. The dispute is predominantly commercial/business-related, arising from subsequent non-payment or delay in payment of promised returns. The continuation of the investment relationship and regular payment of dividends/returns for a considerable period, it is submitted, negate any dishonest intention at the inception of the transactions.

5.4. Learned counsel also submits that multiple FIRs relating to the alleged investments have been registered in different States concerning the same or connected transactions, giving rise to an apprehension of arrest in the present case. The petitioners are permanent residents, have roots in society, are unlikely to abscond, and undertake to abide by the process of law and cooperate with the investigation. It is further submitted that Petitioner Nos. 1 and 2 are lactating mothers and that their arrest would cause serious hardship. On these grounds, the petitioners seek grant of anticipatory bail.

6.1. Learned Additional Public Prosecutor opposes the petition and submits that the petitioners are involved in a serious financial fraud wherein the complainant and several other investors were allegedly induced to invest substantial amounts on representations regarding the business activities of SBPL and KPL and assurances of high monthly returns. It is submitted that the existence of written investment agreements or payment of returns for a period does not, at the investigation stage, rule out the possibility that such representations formed part of a larger fraudulent scheme. The contention that the principal allegations are against other accused and that no specific overt acts are attributed to the petitioners cannot, according to the prosecution, be accepted at this stage. The petitioners are associated with the concerned companies as Directors/Managers and are connected with the principal accused; their respective roles, including receipt and handling of investor funds, require investigation.

6.2. The prosecution further submits that the operation of the relevant bank accounts and the ultimate utilisation or diversion of funds remain to be investigated. The absence of allegations that the petitioners personally received the entire investment amount or derived personal benefit does not, by itself, exonerate them at this stage. The complainant, his family members and several other investors allegedly invested approximately Rs. 4.51 crores, including serving and retired defence personnel. A comprehensive investigation is therefore necessary to ascertain the full extent of the transactions, financial dealings of SBPL and KPL, flow and utilisation of funds, and individual roles of the accused.

6.3. It is further submitted that the availability of documentary and electronic evidence does not obviate the need for custodial interrogation, particularly at the initial stage, when the petitioners may have to be confronted with relevant records and questioned regarding the movement and utilisation of funds. The plea that the dispute is purely commercial and that non-payment of returns resulted from business losses is stated to be a matter of defence, which cannot be conclusively determined while considering anticipatory bail. The prosecution also relies upon the registration of multiple FIRs in different States concerning the alleged investment schemes as indicative of the wider ramifications of the transactions and the need for thorough investigation. Accordingly, the prosecution submits that mere apprehension of arrest is insufficient for grant of anticipatory bail where custodial interrogation may be necessary to ascertain the complete facts. Having regard to the nature and gravity of the allegations and the substantial amounts involved, the learned Additional Public Prosecutor prays for dismissal of the petition.

7. I have carefully considered the rival submissions of the learned counsel and perused the materialsavailable on record.

8. The complaint and the statements of the complainant and other investors disclose, prima facie, that several persons invested substantial amounts with SBPL and KPL on the basis of representations regarding the nature of their business and assurances of returns ranging from 18% to 48% per annum. The alleged course of conduct involved solicitation and acceptance of substantial investments from multiple investors, payment of returns for a period, followed by cessation of such payments and failure to refund the principal. The allegations, involving multiple investors, substantial amounts and an alleged common course of conduct, cannot, at this stage, be treated as a purely bilateral civil or commercial dispute. They require investigation into the representations made, the manner in which investments were solicited and received, the financial affairs of the entities, the utilisation of funds, and the circumstances leading to cessation of returns and non-refund of principal.

9. At the same time, the defence of the petitioners requires consideration. Their case is that the investments were made under written agreements, returns were paid for a considerable period, and the subsequent default resulted from business losses and financial difficulties. The relevant question is whether there was fraudulent or dishonest intention at the inception of the transaction. Section 318 of the BNS requires deception accompanied by fraudulent or dishonest inducement resulting in delivery of property or the specified harm. The prosecution case, however, is not confined to subsequent non-payment but includes allegations of representations made to multiple investors, assurances of substantial returns, collection of considerable amounts and subsequent cessation of payments. Whether such representations were bona fide commercial representations or formed part of a dishonest scheme from inception requires investigation and cannot be conclusively determined at the stage of anticipatory bail.

10. As regards Section 316(2) of the BNS, the investigation must determine whether the ingredients of criminal breach of trust are made

out, including the nature of entrustment, the contractual or fiduciary arrangement, the manner of receipt and handling of the funds, and any alleged dishonest misappropriation, conversion or utilisation contrary to law or contract. Mere receipt of money pursuant to an investment or commercial transaction does not, without the requisite entrustment and subsequent dishonest conduct, automatically constitute criminal breach of trust.

11. The allegation under Section 5 of the TPDFE Act requires separate consideration. Subject to the applicability of the Act and satisfaction of its statutory requirements, the provision extends liability to persons responsible for the management of the affairs of the financial establishment, including promoters and Managers. Thus, while mere designation as a Director or Manager does not, by itself, establish criminal liability, the Investigating Agency is entitled to ascertain the petitioners' actual responsibilities and their respective roles in the acceptance, management, handling and utilisation of the deposits. The fact that the petitioners may not have personally received the invested amounts or derived a direct personal benefit is not, at this stage, conclusive in their favour; equally, their designation or association with the concerned entities is not, by itself, sufficient to establish their criminal involvement.

12. The fact that the case rests substantially on documentary and electronic evidence, including investment agreements, bank statements, company records and electronic communications, is a relevant consideration. If such material is already available or can be independently secured, the necessity of custodial interrogation requires closer scrutiny. Nevertheless, documentary evidence does not invariably render custodial interrogation unnecessary. The Court must consider whether such interrogation is genuinely required, particularly for tracing the flow of funds, confronting the petitioners with financial records, determining their respective roles, examining the utilisation of funds and ascertaining the larger transaction pattern.

13. In an alleged economic offence involving numerous investors, substantial amounts and complex financial transactions, the magnitude and complexity of the investigation are relevant considerations, but they do not constitute an absolute bar to anticipatory bail. The jurisdiction under Section 438 Cr.P.C. is discretionary and requires a balance between personal liberty and the legitimate requirements of investigation. In Gurbaksh Singh Sibbia v. State of Punjab, (1980) 2 SCC 565, the Constitution Bench cautioned against applying rigid formulas to anticipatory bail and directed consideration of the cumulative circumstances of each case. In Sushila Aggarwal v. State (NCT of Delhi), (2020) 5 SCC 1, the Constitution Bench reaffirmed the protective purpose of anticipatory bail and the need to consider factors including the nature and gravity of the accusation, the specific role attributed to the accused, the possibility of absconding, and the likelihood of interference with the investigation or witnesses. Accordingly, the gravity of an economic offence, though relevant, does not by itself mandate refusal of anticipatory bail; conversely, residence within the jurisdiction, willingness to cooperate, or absence of an allegation of personal appropriation does not, by itself, warrant its grant.

14. Having regard to the material placed on record, this Court finds that the allegations are substantially capable of investigation through documentary and electronic evidence, while the individual roles of the petitioners in the management of the concerned entities and the receipt, handling and utilisation of investor funds require further investigation. At present, however, there is no specific material demonstrating that the petitioners personally received or diverted the invested amounts for their own benefit, or that their custodial detention is indispensable for securing the relevant evidence. The petitioners have expressed their willingness to cooperate with the investigation and to appear before the Investigating Officer as and when required.

15. In these circumstances, this Court is of the considered view that custodial detention of the petitioners is not indispensable at this stage.

The interests of investigation can adequately be safeguarded by directing them to appear before the Investigating Officer as and when required, cooperate fully with the investigation, remain available for interrogation, and comply with appropriate conditions to ensure that they neither influence witnesses nor tamper with evidence or otherwise obstruct the investigation.

16. It is clarified that this conclusion is confined to the necessity of custodial detention at the present stage and shall not be construed as an expression of opinion on the merits of the prosecution, the existence of dishonest intention at inception, the fulfilment of the ingredients of Sections 316 or 318 of the BNS, or the applicability and ultimate liability, if any, under the TPDFE Act. Those issues remain open for investigation and, if necessary, trial in accordance with law.

17. Accordingly, the Criminal Petition is allowed, subject to the following conditions:

a) Petitioner Nos.1 to 4/Accused Nos.5, 7 to 9 shall surrender before the Station House Officer, EOW police station, Cyberabad, on or before 09.09.2026. Upon such surrender, or in the event of their arrest, the Station House Officer shall release them on bail upon each of them executing a personal bond for a sum of Rs.50,000/- (Rupees Fifty Thousand only) each, with two sureties for a like sum each, to the satisfaction of the said officer.

b) The petitioners shall furnish their complete residential addresses and contact details to the Investigating Officer and shall keep the same updated throughout the proceedings before the trial court.

c) The petitioners shall remain available as and when required by the investigating officer during the course of investigation.

d) The petitioners shall neither directly nor indirectly induce, threaten, influence, nor contact any prosecution witness, nor shall they tamper with the prosecution evidence in any manner whatsoever. e) The petitioners shall abide by the conditions in the section 482(2) of BNSS.

f) In the event of breach of any of the aforesaid conditions by the petitioners, the prosecution shall be at liberty to take appropriate steps seeking cancellation of bail.

18. Pending miscellaneous applications, if any, shall stand closed.

_______________ Date: 25.08.2026 N.TUKARAMJI, J

MRKR

THE HON’BLE SRI JUSTICE N. TUKARAMJI

CRIMINAL PETITION No.10934 OF 2026

25.08.2026 MRKR