Bombay High Court Order on Bhagtani Riyo -- what it means

Mumbai, 4th October 2017: The order passed by Justice A N Badar for yesterday's proceedings of the Bhagtani Riyo case has deep significance, not only for hundreds of flat buyers, but also for flat-buyers and builders in general. 

Download Bombay High Court's order.

Below is the operational part of the order. My notes and interpretations are in red below each paragraph of the order.

It is seen that investors, who booked apartment in scheme named as ''Bhagtani Riyo' by JVPD Properties Private Limited could not get possession of their apartment on completion of the project. Therefore, informant Sonal Mehta has lodged the report which has resulted in registration of the crime in question.

2. It appears that the land on which the project was to come up is a ''Gurcharan' land and in view of the law laid down by the Hon'ble Apex Court, the scheme might not have materialised.

(The judge, Mr Badar, is using neutral language. He is not pre-judging the cheating charges against Bhagtanis, which will be tried by the trial court i.e. magistrate. Mr Badar is going by the dictum, "Accused persons are presumed innocent until proven guilty". The amount of Rs 22 crore or more to be deposited with the court is not an assumption of guilt on Bhagtanis' part; it is only a condition accepted by Bhagtanis for getting pre-arrest bail.. 

3. This Court by an order dated 29th September, 2017 on recording submissions of the learned Senior Counsel appearing for the applicant showing willingness to deposit the entire amount deposited with a builder by investors adjourned the matter to 3rd October 2017 i.e. today for tendering affidavit of undertaking of applicants.

The key phrase is: "willingness to deposit the entire amount deposited with a builder by investors". It means Bhagtanis are willing to return the entire amount to avoid arrest, even without any criminal trial or civil litigation.

4. In pursuant to this order, applicants have placed on record affidavit of applicant Diipesh Bhagtani. The same is taken on record.

5. In paragraph No.4 of his affidavit, applicant Diipesh has shown willingness to deposit 22 Crores in 6 equal installments. However, the question would be as to how many investors have booked the apartment in the scheme ''Bhagtani Riyo'' and how much amount they have deposited. In addition thereto, it is seen that the agreement entered into between the developer/builder and individual investors contains a Clause No.11 which take care of eventuality of the project remaining in complete. The agreement provides for grant of interest @ 15% from the date of payment made by persons, who booked apartment.

 Clause 11 says:
The judge has cleverly taken the simplest interpretation of  clause 11, aidestepping clause 12 which enables Bhagtani to keep your money indefinitely, and pay interest calculated only till date of termination i.e. cancellation deed. This interpretation is very good for cheated flat-buyers.

6. Statement made in affidavit of applicant Diipesh regarding depositing of Rs.22 Crores is accepted as provisional payment which shall take care of interest of investors. In addition thereto, the applicants are directed to submit list of all persons who booked apartment in the incomplete project ''Bhagtani Riyo''. The list to show the amount deposited by each investors as well as the amount payable to each investor considering the rate of interest at 15% or agreed rate of interest per annum as on the date of submission of list. The list along with affidavit of the applicant be tendered on 12th October 2017.

Dipesh Bhagtani has already tendered his affidavit stating the figure of Rs 22 crore, and it has already been taken on record. So, why did Mr Badar say, "The list along with affidavit of the applicant be tendered on 12th October 2017"? I feel it is because Bhagtani will have to submit another affidavit mentioning the new figure payable to Riyo victims, in view of the list showing the "amount deposited by each investors as well as the amount payable to each investor considering the rate of interest at 15% or agreed rate of interest".This is fantastic for all Riyo investors/flat-buyers.

7. The learned APP states that the investor has already issued letter to the bank for defreezing the concern account. The statement so made is accepted.

This paragraph will cause anxiety to victims of all Bhagtani projects. It is good that the bank accounts of JVPD Properties Pvt. Ltd. were frozen; what if Bhagtanis take advantage of the defreezing to run away from the Indian judiciary's reach? What if they go to live in London like Vijay Mallya and Lalit Modi? What will be the fate of the 2000-odd investors, whom Bhagtanis owe at least Rs 600 crore?

The APP mentioned the need to impound Bhagtani's passport, but the judge brushed it off. Was that a huge mistake? Only time will tell.

8. Stand over to 12th October 2017.

9. Interim order to continue till 12th November 2017.

Bhagtanis are protected from arrest only until 12th November, provided they cough up at least Rs 3.6 crore, which is to be distributed among Riyo victims. If there are 1,000 victims of Bhagtani Riyo, it means Rs 36,000 rupees per head. 

With the exception of paragraph no. 7, this is a perfect order by Justice A M Badar.

Krishnaraj Rao


4) Bombay HC Order: Slap in Face for Bhagtani Builders, Relief for Riyo Project Victims

5) Repay all Bhagtani Riyo Victims: Bombay High Court


  1. Statement 7 is indeed worrisome for investors: Bhagtani's will take the opportunity to empty out company accounts and flee the country. They have probably emptied out accounts of all the other fraudulent companies not affected by the freeze: MD Devcon, Jupo Properties, Jaycee Construction etc. I received a threat this morning from a Jaycee underling that I can forget about my investment with them, which shows that Bhagtanis are now preparing to defy court orders or move to somewhere that the court does not have jurisdiction. Troubling sign for all their investors, since their passports are not impounded.

  2. Do we have an idea on the Savannah project. Is there some one who is taking that into account as well? Would really need some help.


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