Mumbai Businessman Denies Bail in Rs 764 Crore Bank Fraud and Money Laundering Case

Mumbai: The Enforcement Directorate (ED) has successfully opposed the bail plea of businessman Vijay Gupta, who is accused in a Rs 764.44 crore fraud and money laundering case involving the State Bank of India (SBI). A special Prevention of Money Laundering Act (PMLA) court in Mumbai rejected Gupta's bail application on Friday, citing sufficient evidence to conclude his active involvement in the crime.

Gupta, the founder of the Vindhyavasini Group of Companies, which operates in steel manufacturing, real estate development, and infrastructure services, remains in judicial custody. The ED strongly opposed the bail, arguing that Gupta is a 'habitual economic offender' and actively involved in money laundering. The court emphasized the gravity and seriousness of the offences, concluding that Gupta is not entitled to bail.

While the defense claimed that Gupta has been in jail for over 12 months, the court noted that he was arrested in the money laundering case only in March this year. The court clarified that the period of custody in the predicate offence cannot be considered since the offence under the PMLA is a distinct and separate offence.

The ED's case is based on six FIRs registered by the Central Bureau of Investigation (CBI) and the Economic Offences Wing (EOW) in Mumbai against six companies of the Vindhyavasini Group. These companies, promoted and managed by Gupta, are accused of defrauding the SBI's Eastern Express Highway Branch in Thane of approximately Rs 764.44 crores. According to the ED, the accused used 57 shell entities and 117 bank accounts for the placement, integration, and layering of the proceeds of crime.

The ED detailed a systematic scheme of fraud, including the submission of fabricated and inflated Memorandums of Understanding (MOUs), Technical Economic Viability (TEV) reports, and highly inflated valuation reports of mortgaged properties to secure maximum loan sanctions from SBI. It was further alleged that the accused colluded with Vishwas Kadam, a then relationship manager for Medium Enterprises (RMME) at SBI, Thane branch, and loan consultant Vijay Patil, to process and approve loans based on these forged documents. The ED claims Gupta paid a bribe of Rs 59 lakh to Kadam.

It was also alleged that there was a diversion of approximately Rs 164 crore from cash credit limit accounts of group companies to Gupta's personal accounts and shell entities owned by him and his brothers, Ajay Gupta and Sanjay Gupta. These funds were allegedly routed multiple times for unauthorized purposes. The ED also submitted that around Rs 42.77 crore were withdrawn in cash from August 2010 to July 2013 from the bank accounts of the Vindhyavasini Group, shell entities, and personal accounts of family members.

Allegations include the purchase of flats in Borivali and Kandivali using illicit funds, with one flat reportedly purchased in the name of his children's caretaker. It was also alleged that Gupta siphoned off a significant portion of Rs 13.20 crore received as compensation from NHAI for land acquisition, some of which was already mortgaged with SBI.

Gupta's lawyer argued that he was falsely implicated and that the case was lodged with ulterior motives. It was also contended that the transactions are civil in nature, with recovery proceedings already initiated by SBI pending before civil courts. It was also submitted that sufficient collateral was provided to the bank, and the remaining dues of Rs 321 crores (out of a total loan of Rs 805 crores, with Rs 486 crores already recovered) could be covered by auctioning mortgaged properties, including the Solaris Building at Powai, valued at approximately Rs 400 crore in 2013.

The defense highlighted Gupta's incarceration of over 12 months and the unlikelihood of a speedy trial given the hundreds of witnesses and over fifty thousand pages of documentary evidence. Despite these arguments, the court remained firm in its decision to deny bail.