The Delhi High Court has refused to grant bail to a man accused of committing a largescale crypto currency fraud to the tune of Rs 50 crore.
The single-judge Bench of Justice Girish Kathpalia denied bail to the accused on the grounds that unlike most conventional bodily offences, economic offences, especially those dealing with crypto currency, were committed with elaborate planning and expertise.
Describing digital currency as a way of converting recognised and legitimate money into an unregulated, dark and untraceable financial system, the High Court observed that crypto currency posed a serious threat to the economy of a country, especially like India, where it could have huge implications.
An FIR was lodged against the accused and others in 2020 under Sections 406 (criminal breach of trust), 409 (criminal breach of trust by public servant or banker), 420 (cheating and dishonestly inducing delivery of property), 467 (forgery of valuable security), and 120B (criminal conspiracy) of the IPC.
As per the prosecution, the accused, in connivance with other like-minded people, lured numerous individuals to invest in his company by promising high returns of 20-30 percent from cryptocurrency trading. The victims reportedly invested around Rs 50 crore in the accused’s company.
Even after the derecognition of cryptocurrency by Indian authorities, the accused managed to attract more investors by promising a false picture of profits, it added.
The Counsel appearing for the accused claimed that 22 investors had settled their disputes through the mediation centre at the Delhi High Court. The accused was actively repaying dues using post-dated cheques or cash, added the lawyer.
The High Court rejected the arguments on the grounds the mediator(s) seemed to have also simply recorded the mediation settlements and concluded the mediations without ensuring that the money was actually returned to the victims.
Agreeing with the prosecutor’s submissions, Justice Kathpalia observed that the accused used the mediation process as a tool to create artefact of bona fide, which led to his interim bail. The applicant thereafter continued to ensure that the settlement process went endlessly and he could secure evergreen interim protection.
Pointing towards the scale of the fraud, the High Court said the accused was allegedly involved in at least 13 other cases of a similar nature. So far, the ongoing investigation had identified 61 defrauded investors, up from the initial count of 48.
Justice Kathpalia rejected the accused’s bail petition on the grounds of multi-victim nature of the scam, the gravity of the charges, and the accused’s past criminal conduct, which made him undeserving for bail at the current stage.