BA.53.2026.doc Ajay IN IN THE THE HIGH HIGH COURT COURT OF OF JUDICATURE JUDICATURE AT AT BOMBAY BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL APPELLATE JURISDICTION BAIL APPLICATION NO. 53 OF 2026 1) Santosh Ramdas Barbade (Accused No.1) 2) Laxman Ranjish Mule (Accused No.4) 3) Aniket Arjun Hande (Accused No.5) .. Applicants Versus State of Maharashtra and Anr. .. Respondents ....................  Mr. Zaid Anwar Qureshi a/w. Mr. Sunil Lokhande, Ms. Bhagyashi Chavan, Advocates for Applicants.  Mr. Kuldeep Patil a/w. Mr. Anay Joshi i/b. Saili Dhuru, Advocates for First Informant.  Ms. Shilpa G. Talhar, APP for Respondent – State.  PSI – Mr. Janak Wakankar (Economic Offences Wing, Pimpri Chinchwad) ......…........... CORAM : MILIND N. JADHAV, J. DATE : SEPTEMBER 23, 2026. P.C.: 1. Heard Mr. Qureshi learned Advocate for Applicants, Mr. Patil learned Advocate for First Informant and Ms. Talhar, learned APP for Respondent – State. 2. Present Bail Application is filed under Section 483 of Bharatiya Nagarik Suraksha Sanhita, 2023 by Applicants seeking enlargement on bail in connection with FIR being C.R. No.497 of 2025 registered at Chikali Police Station for the offences punishable under Sections 316(2), 316(5), 318(4), 3(5) of Bharatiya Nyaya Sanhita, 2023 and Sections 3, 21, 4, 22, 5 and 23 of Banning of Unregulated Deposit Schemes Act, 2019. 1 of 15 BA.53.2026.doc 3. Briefly stated, it is prosecution’s case Applicants and other accused persons are Directors of M/s. Rajratna Chit Fund Pvt Ltd. and Rajyog Chit Fund Pvt. Ltd. and these companies invite deposits and promise high returns. It is prosecution’s case that First Informant along with several other investors were lured to invest their money in these chit funds and were promised high returns however Applicants never paid the principal investments nor did they pay the interest accrued thereon to the investors. It is alleged that First Informant deposited Rs.8,50,700/- and similar such deposits were made by other investors which totaled to Rs.3,85,75,929/-. 3.1. On 14.08.2025, First Informant registered First Information Report being C.R. No.497 of 2025 with Chikhali Police Station against Applicants and other accused persons under the aforementioned provisions of law and Applicants were arrested on 16.09.2025. Applicants were produced before Magistrate and they were remanded to judicial custody. Applicant No.2 filed Bail Application No.6751 of 2025 before Additional Sessions Judge which came to be rejected by order dated 07.11.2025. Applicant No.3 filed Bail Application No.7666 of 2025 before the Additional Sessions Judge seeking interim bail which was allowed by order dated 30.11.2025. 3.2. On 03.12.2026, Applicants filed Bail Application under Section 187 of BNSS seeking grant of default bail which was rejected 2 of 15 BA.53.2026.doc by order dated 18.12.2025. Hence present Application. 4. Mr. Qureshi, learned Advocate for Applicants would submit that present Applicants are falsely implicated in the offence and that Applicants were not directors but merely employees drawing salary from the aforementioned companies. He would submit that Applicants were arrested on 16.09.2025, produced before Magistrate on 17.09.2025 and all Applicants have cooperated with the investigation. He would submit that Section 316(5) of BNS is the only charge levied against Applicants where prescribed punishment is more than 7 years however the FIR does not disclose the fulfillment of ingredients of Section 316(5) of BNS. He would submit that charges of Section 316(2), 316(5) and 318(4) of BNS are not attracted at all and cannot exist together. He would refer to and rely upon a decision of the Supreme Court in the case of Delhi Race Club (1940) Ltd. and Ors. Vs. State of Uttar Pradesh and Anr.1 in support of this contention. 4.1. He would submit that Section 187(3)(ii) of BNSS prescribes a period of 60 days to file chargesheet for offences which are not punishable by death, life imprisonment and imprisonment for more than 10 years. He would submit that Applicants were arrested on 16.09.2025 and chargesheet was filed on 10.12.2025 after 76 days from the date of arrest therefore Applicants are entitled to default bail. He would submit that since charge-sheet is filed there is no need for 1 Criminal Appeal No. 3114 of 2024 decided on 23.08.2024 3 of 15 BA.53.2026.doc custody of Applicants and therefore they ought to be released on bail. He would submit that Applicants are ready to cooperate with further investigation if any and are willing to abide by all bail conditions imposed by this Court. In light of the aforementioned submissions he would urge this Court to enlarge Applicants on bail. 5. Mr. Patil, learned Advocate for Informant would submit that Section 187(3) of BNSS is confined to determining whether investigation was completed within stipulated 60 days or 90 days as the case may be and this Court, in its bail jurisdiction, is not required to adjudicate upon the correctness or sustainability of the offences i.e. whether Section 316 of BNS was correctly applied or not. He would submit that ingredients of Section 316 of BNS are made out in the chargesheet hence Applicants are charged under this provision. He would submit that while considering grant of bail Court is not required to exercise appeal jurisdiction over the investigation and substitute its opinion on the applicability of a particular penal provision. He would submit that if Court at this stage were to remove Section 316 of BNS then it would affect the merits of the prosecution and amount to an order of discharge without following the procedure of law prescribed for discharge or framing of charge against Applicants. He would submit that Applicants are attempting to enlarge the scope of Section 187(3) of BNSS and convert proceedings for grant of default bail into grant of discharge which is impermissible in law. He would submit that 4 of 15 BA.53.2026.doc Applicants cannot claim for reduction in period to file chargesheet merely by disputing the charge of Section 316 of BNS. 6. Ms. Talhar, learned APP for Respondent – State would submit that Applicant and other accused persons played a large scale fraud by luring unsuspecting investors with high returns. She would submit that investors invested their money in the aforementioned companies but instead of retuning their money, Applicants purchased several property hence Applicants misused the amounts entrusted to them and hence committed the offence of criminal breach of trust. She would submit that from 2010 to 2018, 98 investors invested large sums of money and were duped of Rs.8,75,84,171/- therefore charge under Section 316(5) of BNS is permissible in law. 6.1. She would submit that the distinction between the offences of cheating and criminal breach of trust were considered by the Supreme Court in the case of S.W. Palanitkar And Ors. Vs. State of Bihar and Anr.2 where the Supreme Court held that cheating required dishonest intention at the inception and criminal breach of trust required entrustment of property followed by dishonest misappropriation and these provisions have to be tested against the factual allegations and all the material collected in the present case as well as the role attributed to the accused persons. 2 (2002) 1 SCC 241 5 of 15 BA.53.2026.doc 6.2. She would submit that Applicants claim of default bail cannot be decided merely on the basis of mechanical calculation of date. She would submit that the offences Applicants are charged with are serious in nature and that the chronology of events must be examined to determine whether such right of default bail accrued and exercised before filing of chargesheet. 6.3. She would submit that Applicants are charged with Section 316(5) of BNS and since its prescribed punishment is upto 10 years, time period for filing of chargesheet is 90 days and since charge-sheet was filed within 76 days there is no illegality committed by the Investigation Officer, hence default bail deserves to be rejected. She would submit that since there is a large amount of money involved, there is all likelihood that Applicant may jump bail. She would adopt the submissions of Mr. Patil and urge this Court to deny grant of bail to Applicant on the basis of these submissions. 7. I have heard the learned Advocates appearing for the parties and with their able assistance, perused the record of the case. Submissions made by learned Advocates at the bar have received due consideration of the Court. 8. Perusal of the material on record would show that Complainant alongwith other investors invested in M/s. Rajratna Chit Fund Pvt Ltd. and Rajyog Chit Fund Pvt. Ltd since between 2010 and 2018 and were getting the benefits therefrom regularly. Prosecution 6 of 15 BA.53.2026.doc case is that the investors were lured and induced by the Applicant and other accused persons to invest into the schemes floated by their Companies by promising high rates of interest. Hence it can be deduced that the case of prosecution at the highest can be for cheating under Section 318(4) of BNS. 9. It is trite law that offence of cheating and criminal breach of trust cannot co-exist simultaneously. In this context reference is made to a decision of the Supreme Court in the case of Delhi Race Club (1940) Ltd. and Ors. Vs. State of Uttar Pradesh and Anr. (Supra) wherein in paragraph Nos.24 to 30 the Court has laid down the distinction between offence of cheating and criminal breach of trust. Paragraph Nos. 24 to 30 read thus:- "DIFFERENCE BETWEEN CRIMINAL BREACH OF TRUST AND CHEATING 24. This Court in its decision in S.W. Palanitkar & Ors. v. State of Bihar & Anr. reported in (2002) 1 SCC 241 expounded the difference in the ingredients required for constituting an of offence of criminal breach of trust (Section 406 IPC) viz-a-viz the offence of cheating (Section 420). The relevant observations read as under: - “9. The ingredients in order to constitute a criminal breach of trust are: (i) entrusting a person with property or with any dominion over property,(ii) that person entrusted (a) dishonestly misappropriating or converting that property to his own use; or (b) dishonestly using or disposing of that property or wilfully suffering any other person so to do in violation (i) of any direction of law prescribing the mode in which such trust is to be discharged, (ii) of any legal contract made, touching the discharge of such trust. 10. 10. The ingredients of an offence of cheating are: (i) there should be fraudulent or dishonest inducement of a person by deceiving him, (ii)(a) the person so deceived should be induced to deliver any property to any person, or to consent that any person shall retain any property; or (b) the person so deceived should be intentionally induced to 7 of 15 BA.53.2026.doc do or omit to do anything which he would not do or omit if he were not so deceived; and (iii) in cases covered by (ii)(b), the act of omission should be one which causes or is likely to cause damage or harm to the person induced in body, mind, reputation or property.” 25. What can be discerned from the above is that the offences of criminal breach of trust (Section 406 IPC) and cheating (Section 420 IPC) have specific ingredients. In order to constitute a criminal breach of trust (Section 406 IPC): - 1) There must be entrustment with person for property or dominion over the property, and 2) The person entrusted: - a) dishonestly misappropriated or converted property to his own use, or b) dishonestly used or disposed of the property or willfully suffers any other person so to do in violation of: i. any direction of law prescribing the method in which the trust is discharged; or ii. legal contract touching the discharge of trust (see: S.W.P. Palanitkar (supra). Similarly, in respect of an offence under Section 420 IPC, the essential ingredients are: - 1) deception of any person, either by making a false or misleading representation or by other action or by omission; 2) fraudulently or dishonestly inducing any person to deliver any property, or 3) the consent that any persons shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit (see: Harmanpreet Singh Ahluwalia v. State of Punjab, (2009) 7 SCC 712 : (2009) Cr.L.J. 3462 (SC)) 26. Further, in both the aforesaid sections, mens rea i.e. intention to defraud or the dishonest intention must be present, and in the case of cheating it must be there from the very beginning or inception. 27. In our view, the plain reading of the complaint fails to spell out any of the aforesaid ingredients noted above. We may only say, with a view to clear a serious misconception of law in the mind of the police as well as the courts below, that if it is a case of the complainant that offence of criminal breach of trust as defined under Section 405 of IPC, punishable under Section 406 of IPC, is committed by the accused, then in the same breath it cannot be said that the accused has also committed the offence of cheating as defined and explained in Section 415 of the IPC, punishable under Section 420 of the IPC. 8 of 15 BA.53.2026.doc 28. Every act of breach of trust may not result in a penal offence of criminal breach of trust unless there is evidence of manipulating act of fraudulent misappropriation. An act of breach of trust involves a civil wrong in respect of which the person may seek his remedy for damages in civil courts but, any breach of trust with a mens rea, gives rise to a criminal prosecution as well. It has been held in Hari Prasad Chamaria v. Bishun Kumar Surekha & Ors., reported in (1973) 2 SCC 823 as under: “4. We have heard Mr. Maheshwari on behalf of the appellant and are of the opinion that no case has been made out against the respondents under Section 420 Penal Code, 1860. For the purpose of the present appeal, we would assume that the various allegations of fact which have been made in the complaint by the appellant are correct. Even after making that allowance, we find that the complaint does not disclose the commission of any offence on the part of the respondents under Section 420 Penal Code, 1860. There is nothing in the complaint to show that the respondents had dishonest or fraudulent intention at the time the appellant parted with Rs. 35.000/- There is also nothing to indicate that the respondents induced the appellant to pay them Rs. 35,000/- by deceiving him. It is further not the case of the appellant that a representation was made, the respondents knew the same to be false. The fact that the respondents subsequently did not abide by their commitment that they would show the appellant to be the proprietor of Drang Transport Corporation and would also render accounts to him in the month of December might create civil liability on the respondents for the offence of cheating.” 29. To put it in other words, the case of cheating and dishonest intention starts with the very inception of the transaction. But in the case of criminal breach of trust, a person who comes into possession of the movable property and receives it legally, but illegally retains it or converts it to his own use against the terms of the contract, then the question is, in a case like this, whether the retention is with dishonest intention or not, whether the retention involves criminal breach of trust or only a civil liability would depend upon the facts of each case. 30. The distinction between mere breach of contract and the offence of criminal breach of trust and cheating is a fine one. In case of cheating, the intention of the accused at the time of inducement should be looked into which may be judged by a subsequent conduct, but for this, the subsequent conduct is not the sole test. Mere breach of contract cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction i.e. the time when the offence is said to have been committed. Therefore, it is this intention, which is the gist of the offence. Whereas, for the criminal breach of trust, the property must 9 of 15 BA.53.2026.doc have been entrusted to the accused or he must have dominion over it. The property in respect of which the offence of breach of trust has been committed must be either the property of some person other than the accused or the beneficial interest in or ownership’ of it must be of some other person. The accused must hold that property on trust of such other person. Although the offence, i.e. the offence of breach of trust and cheating involve dishonest intention, yet they are mutually exclusive and different in basic concept. There is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of making a false or misleading representation i.e., since inception. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property, and he dishonestly misappropriated the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver any property. In such a situation, both the offences cannot co-exist simultaneously.” 10. From the above it can be deduced that the grievance of Complainant in the present case would at the most lie for offence of cheating under Section 318(4) BNS and not criminal breach of trust under Section 316(5) of BNS because of the alleged dishonest intention of Applicant and other accused persons to lure investors and dupe them with investment schemes promising high returns. This is so because for almost 8 years from 2010 to 2018, there was a healthy relationship of trust and returns between the very same parties. Hence in the present case, both charges i.e. of cheating and criminal breach of trust are levied against Applicants and it is the case of First Informant and the learned APP that this Court in its bail jurisdiction cannot discharge the Applicant from the offence of criminal breach of trust. At this stage I would like to clarify that this Court is not expressing its imprimatur on the offences Applicants are charged with and this Court 10 of 15 BA.53.2026.doc prima facie observes that in the facts of the present case, the offences of cheating and criminal breach of trust cannot go hand in hand with each other as perusal of the material appended on record would show that prima facie the offence of only cheating is made out against the Applicants at the highest. Hence I am uanble to accept the submissions of Mr. Patil. It is further seen that the Supreme Court has deprecated the conduct of Police Officers in mechanically adding charges of criminal breach of trust with cheating without examining facts of the case. In the present case, Applicants are alleged to have lured and induced aggrieved persons to invest money in their chit fund companies therefore Applicants are alleged to have deceived the aggrieved persons to invest money in their companies hence prima facie the offence of cheating is made out. This Court has to be vigilant of the fact that Police Officers may mechanically levy charge of criminal breach of trust without its ingredients made out with the sole intent of increasing the time to file chargesheet from 60 days to 90 days under Section 187(3)(i) of BNSS. The Supreme Court in Delhi Race Club (1940) Ltd. and Ors. Vs. State of Uttar Pradesh and Anr. (Supra) has already called for training to be imparted to Police Officers when they are faced with the dilemma of whether the offence of cheating or criminal breach of trust or if both charges apply to the facts of a case. The words of the Supreme Court deserve reiteration in the facts of the present case as it is seen that the Police Authorities prima 11 of 15 BA.53.2026.doc facie failed to effectively consider the distinction between the two offences and prima facie failed to effectively show if the aforesaid offences are distinct in the facts of the present case. 11. It is further seen that the Investigating Officer attached assets valued at Rs.21.06 lakhs belonging to Applicants. Chargesheet is filed before the Trial Court and it lays out 98 witnesses to be examined. Trial has not commenced and therefore there is no possibility of the Trial concluding the near future. In this regard, support is drawn from the decision of the Supreme Court in the case of Sanjay Chandra Vs. Central Bureau of Investigation3 wherein the Court has held that in economic offences while considering an application for bail, the nature of charge may be relevant but at the same time the punishment to which the party may be liable, if convicted is also a significant aspect and therefore both, the seriousness of the charge and the severity of the punishment should be taken into consideration for arriving at a decision for grant of bail. It further observed that deprivation of liberty must be considered a punishment unless it is absolutely necessary in the interest of justice and that object of bail is merely to secure appearance of accused at the trial. 12. In view of the above prima facie observations and facts delineated herein above, All three (3) Applicants before me are 3 (2012) 1 SCC 40 12 of 15 BA.53.2026.doc entitled for default bail. Bail Application of three (3) Applicants is allowed on the following terms and conditions:- (i) All three (3) Applicants - Santosh Ramdas Mule, Laxman Ranjish Mule and Aniket Arjun Hande are directed to be released on bail in connection with FIR bearing C.R. No. 497 of 2025 on furnishing P.R. Bond in the sum of Rs. 20,000/- each (Rs. Twenty Thousand each) with one or two sureties in the like amount; (ii) All three (3) Applicants are permitted to furnish provisional cash bail of Rs. 20,000/- each for their release immediately and file undertaking that they will provide one or two sureties in the like amount of Rs. 20,000/- each within a period of four weeks after their release which shall be accepted by the Trial Court. Applicants shall provide sureties as directed; (iii) Applicants shall report to the Investigating Officer of the concerned Police Station once every month on the third Sunday between 10:00 a.m. to 12:00 p.m. for the first one year and thereafter as and when called; (iv) Applicants shall co-operate with the conduct of trial and attend the Trial Court on all dates unless specifically exempted and will not take any unnecessary adjournments, 13 of 15 BA.53.2026.doc if they does so, it will entitle the prosecution to apply for cancellation of this order; (v) Applicants shall not leave the Country without prior permission of the Trial Court; Applicants are directed to deposit their passports, if, any with the Trial Court within a period of one week of their release from prison. (vi) Applicants shall not influence any of the witnesses or tamper with the evidence in any manner; (vii) Applicants shall keep the Investigating Officer informed of their current address and mobile contact number and / or change of residence or mobile details, if any, from time to time; and (viii) Any infraction of the above conditions shall entail the prosecution to seek cancellation of this order. 13. It is clarified that the above observations in this order are limited for the purpose of granting bail only and I have not made any observations on the merits of the case and the trial shall be adjudicated on the basis of the evidence uninfluenced by the present order and strictly in accordance with law. It is also clarified that the common order is for the sake of convenience and Applicants shall not be adversely impacted by the conduct of the other Applicants including 14 of 15 BA.53.2026.doc but not limited to infringement of bail conditions. 14. Bail Application is allowed and disposed. [ MILIND N. JADHAV, J. ] Ajay 15 of 15 RAVINDRA MOHAN AMBERKAR Digitally signed by RAVINDRA MOHAN AMBERKAR Date: 2026.09.24 20:38:56 +0530