Unrealistic Guaranteed Returns = Prima Facie Cheating: Bombay High Court’s BNS-era benchmark for denying anticipatory bail in investment‑inducement cases

Introduction

This commentary analyzes the Bombay High Court’s judgment in Rupali Bapurao Jadhav and Anr v. State of Maharashtra (Anticipatory Bail Application No. 2042 of 2025), pronounced on 17 September 2025 by Amit Borkar, J. The applicants—husband and wife, both in business, with Applicant No. 2 being a practicing advocate—sought anticipatory bail under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), apprehending arrest in Crime Register No. 90 of 2025 at Kharghar Police Station for offences noted as Sections 318(4) and 3(5) of the Bharatiya Nyaya Sanhita, 2023 (BNS).

The prosecution’s core allegation is that Applicant No. 2 induced the complainant (also a practicing advocate and erstwhile law‑firm partner) to part with Rs. 30,00,000 on the promise of assured monthly profits of 10–15% through intraday share trading conducted by Applicant No. 1. Initial payments of Rs. 4,00,000 were made as “profit,” followed by non‑repayment, a “security” cheque of Rs. 25,00,000, intermittent transfers, and ultimately acrimony and threats. The State highlighted similar complaints by at least four other victims, suggesting a pattern. The applicants characterized the dispute as purely civil, arising from professional/partnership differences, and claimed repayment in excess of what was allegedly invested.

The judgment is significant for three reasons:

It crystallizes a BNS‑era rule of thumb: a promise of abnormally high and guaranteed returns (10–15% monthly in share trading) is inherently unrealistic and thus indicative of dishonest intention at inception—supporting the criminal offence of cheating rather than a mere civil dispute.
It treats electronic communications (WhatsApp transcripts, draft MoU) backed by a certificate as prima facie corroboration at the bail stage.
It treats admitted “liaisoning” by advocates with public authorities as an aggravating circumstance, relevant to the assessment of criminality and the appropriateness of anticipatory bail.

Summary of the Judgment

The High Court rejected the anticipatory bail application. Key holdings include:

The inducement of 10–15% assured monthly returns in intraday trading is facially unrealistic, indicating dishonest intention at the inception and taking the matter beyond a mere civil breach into the realm of criminal cheating (paras 9–16).
Electronic transcripts of conversations and a draft MoU forwarded via WhatsApp—accompanied by an evidentiary certificate—contain admissions that prima facie support the prosecution case of receipt of funds (paras 12, 16).
Multiple similar complaints by other victims (involving Rs. 4 lakh, Rs. 45 lakh, Rs. 45 lakh, and Rs. 49 lakh) reveal a pattern and strengthen the inference of initial dishonesty (paras 8, 25).
Admissions by Applicant No. 2 of paying Rs. 26.32 lakh for “liaisoning work” with revenue authorities profoundly undermine the civil‑dispute plea and raise serious concerns of professional misconduct by advocates, further colouring the transactions with illegality (paras 19–24).
Given the magnitude of funds, the number of victims, and the need to trace fund flows, custodial interrogation is necessary; anticipatory bail would hamper the investigation (para 27).
Interim protection was refused to be continued (para 30).

Analysis

1) Precedents Cited

The judgment does not cite case law expressly. Nevertheless, its reasoning sits comfortably within long‑standing Supreme Court jurisprudence on the civil–criminal divide in cheating cases and the principles guiding anticipatory bail:

Cheating vs. civil disputes: In Hridaya Ranjan Prasad Verma v. State of Bihar (2000) 4 SCC 168, the Supreme Court clarified that mere breach of contract does not amount to cheating unless dishonest intention existed at the inception. The Bombay High Court’s emphasis on the inherent impossibility/unrealism of 10–15% assured monthly returns echoes this threshold—using the nature of the promise itself to infer initial mens rea.
Criminalization where inducement is fraudulent: Decisions such as Indian Oil Corporation v. NEPC India Ltd. (2006) 6 SCC 736, S.W. Palanitkar v. State of Bihar (2002) 1 SCC 241, and Vesa Holdings (P) Ltd. v. State of Kerala (2015) 8 SCC 293, collectively caution that criminal process should not be used to settle civil scores, yet recognize that fraudulent inducement with initial dishonest intent rightly attracts penal liability. The present ruling deploys that distinction.
Electronic evidence at the threshold: Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal (2020) 7 SCC 1 holds that electronic records require the appropriate certificate to be admissible. While full admissibility is a trial question, courts routinely consider such material prima facie at the bail stage. The High Court’s reliance on WhatsApp transcripts and a certificate is consistent with this track.
Anticipatory bail and custodial interrogation: Though anticipatory bail principles were recast in Sushila Aggarwal v. State (NCT of Delhi) (2020) 5 SCC 1, the need for custodial interrogation in serious economic offences is recognized in cases such as P. Chidambaram v. Directorate of Enforcement (2019) 9 SCC 24 and State rep. by CBI v. Anil Sharma (1997) 7 SCC 187. The High Court similarly emphasizes tracing funds and investigating a pattern across multiple victims as grounds to deny pre‑arrest bail.
Economic offences as grave: The Court’s gravity assessment resonates with the Supreme Court’s characterisation of economic offences as serious with wide‑ranging societal impact, seen in decisions like Y.S. Jagan Mohan Reddy v. CBI (2013) 7 SCC 439.

In short, while no precedent is explicitly cited, the judgment’s doctrinal anchors are firmly within established Supreme Court guidance.

2) Legal Reasoning

From “civil” to “criminal” via the nature of inducement: The Court identifies the promise of 10–15% assured monthly returns in intraday share trading as inherently unrealistic. That characterization operates as a proxy to infer dishonest intention at inception (the core of cheating under BNS s. 318), especially when coupled with subsequent non‑repayment and evasive conduct. This is not merely non‑performance; it is a transaction tainted at the outset by a fraudulent guarantee.
Use of contemporaneous electronic records: The Court gives prima facie weight to WhatsApp transcripts and a draft MoU referring to receipt of monies. This materially undermines the applicants’ denial and the “purely civil dispute” narrative, indicating admissions consistent with the prosecution version.
Pattern evidence and multiple victims: The presence of four additional complainants describing similar inducements and defaults suggests a scheme rather than an isolated dispute. This pattern strengthens the inference of initial dishonesty and raises the investigation’s complexity beyond a two‑party contractual quarrel.
Professional status and “liaisoning” admissions: The Court treats Applicant No. 2’s written admission of paying Rs. 26.32 lakh for “liaisoning” with revenue authorities as profoundly troubling professional conduct for an advocate, implicating Section 35 of the Advocates Act (professional misconduct). This is not a disciplinary proceeding, but the Court recognizes such conduct as an aggravating factor bearing on the nature of dealings and the credibility of the civil‑dispute plea. It also suggests the transactions stray from legitimate professional pursuits into ethically impermissible and potentially unlawful territory.
Custodial interrogation necessity: Considering large sums, multiple victims, and the need to trace utilization/diversion of funds, the Court finds custodial interrogation warranted. The implication is that mere cooperation while on anticipatory bail may not suffice to uncover the complete financial trail or the scope of the alleged scheme.
Parallel remedies do not dilute criminality: The complainant’s resort to proceedings under Sections 138/142 of the Negotiable Instruments Act is treated as parallel and not as a bar to criminal prosecution. Where the foundational transaction bears indicia of initial dishonesty, criminal law can proceed concurrently with civil/regulatory remedies.

3) Impact and Significance

BNS-era calibration of “dishonest intention at inception” in investment solicitations: The Court’s articulation that 10–15% assured monthly returns in share trading are facially unrealistic will likely be invoked in future cases to rebut “purely civil” defences in investment‑inducement disputes. It provides a practical, market‑savvy benchmark for trial and bail courts.
Electronic admissions at the bail stage: The willingness to rely on chat transcripts and draft MoUs (with certificates) at the threshold stage will encourage investigators to marshal such material early. It also signals to applicants that contradictions between their denials and their own electronic records can be decisive even before trial.
Professional ethics as a relevant contextual factor in bail: By referencing admitted “liaisoning” with public authorities and invoking Section 35 of the Advocates Act, the Court brings professional ethics into the frame of assessing criminality and bail. This could influence future bail decisions where professionals leverage their status to gain trust in questionable transactions.
Economic offences and custodial interrogation: The judgment aligns with an increasingly consistent approach of treating alleged economic schemes with multiple victims and complex fund flows as matters that presumptively require custodial interrogation for effective investigation.
Parallel civil/regulatory proceedings do not sanitize initial fraud: The presence of an NI Act proceeding or partnership dissolution does not neutralize criminality where the inducing promise is itself fraudulent. Expect more concurrent civil and criminal proceedings in investment‑inducement disputes—especially those promising “assured” high returns.

Complex Concepts Simplified

Anticipatory bail (BNSS, s. 482): A pre‑arrest protective remedy granted by the High Court or Court of Session when a person apprehends arrest. Courts consider the gravity of the accusation, the need for custodial interrogation, risk of flight, and potential for evidence tampering.
Cheating and “dishonest intention at inception” (BNS, s. 318): Cheating requires a fraudulent or dishonest intention at the time of making the representation/inducement. Later inability to perform is not cheating; a false promise that is inherently unrealistic from the start can indicate the necessary initial mens rea.
“Civil dispute” vs. criminality: A breach of contract is generally civil. But if a person is induced to part with money by a false promise made with initial dishonest intent, criminal law (cheating, misappropriation) is attracted. Courts examine the nature of the promise, surrounding circumstances, pattern, and conduct to decide.
Electronic evidence and certificates (formerly s. 65B Evidence Act; now Bharatiya Sakshya Adhiniyam, 2023): Electronic records (chats, emails, PDFs) typically require a statutory certificate to be admissible at trial. At the bail stage, courts may still look at such material prima facie, particularly when the certificate is produced.
Custodial interrogation: Interrogation while the accused is in custody. Courts consider it necessary in complex financial crimes to trace funds, recover devices/documents, and confront the accused with material co‑accused/witnesses.
Pattern evidence: When multiple similar complaints emerge, it suggests a scheme rather than an isolated dispute. Pattern evidence is relevant in assessing prima facie guilt and the need for effective investigation.
Professional misconduct (Advocates Act, s. 35): Advocates are officers of the court; engaging in influence‑peddling or “liaisoning” with public authorities for monetary consideration may constitute professional misconduct. While disciplinary proceedings are separate, such conduct can inform a criminal court’s assessment of the seriousness and character of the alleged transactions.
NI Act proceedings (ss. 138/142): Dishonour of a cheque can trigger penal consequences under the Negotiable Instruments Act. Such proceedings are not mutually exclusive with cheating prosecutions where the underlying transaction is alleged to be fraudulent.

Statutory and Transitional Notes

BNSS numbering: The application was under s. 482 BNSS, which is the renumbered counterpart of anticipatory bail (formerly s. 438 CrPC).
BNS offences: The FIR refers to BNS s. 318(4) (pertaining to cheating and its aggravated forms) and s. 3(5). Section 3 is a definitions clause in BNS, so the reference to “3(5)” appears to be a drafting/recording slip; the Court’s reasoning consistently treats the case as cheating and criminal misappropriation. The exact penal provision(s) will be crystallized at charge‑framing.
Evidence statute references: The judgment mentions a “certificate under Section 65-B of the Information Technology Act” at one point and “Section 65B of the Indian Evidence Act” elsewhere. The correct principle is that a certificate is required under the evidence statute for electronic records (under the Bharatiya Sakshya Adhiniyam, 2023, which replaced the Indian Evidence Act). The Court treats the certificate’s existence as sufficient at the bail stage.

Conclusion

This decision marks a clear BNS‑era benchmark: an assured promise of abnormally high returns in share trading—10–15% per month—is inherently unrealistic and, when used as an inducement, prima facie manifests dishonest intention at the inception, supporting a charge of cheating rather than a mere civil breach. The Court’s refusal of anticipatory bail turns on multiple converging factors: the implausible guarantee, direct electronic admissions, multiple similar complaints indicating a pattern, the scale of funds requiring tracing through custodial interrogation, and the aggravating professional‑ethics dimension of admitted “liaisoning” by an advocate.

Key takeaways:

Assured, abnormally high returns in investment solicitations will likely be treated as red flags for initial dishonesty, overcoming “purely civil” pleas at the bail stage.
Electronic communications with statutory certificates can decisively shape bail outcomes.
Economic offences with multiple victims and complex money trails usually warrant custodial interrogation.
Professionals’ ethical lapses in related dealings may bear on criminal courts’ assessment of gravity and the appropriateness of pre‑arrest protection.

Overall, the judgment reinforces a robust prosecutorial posture against investment‑inducement frauds and clarifies that civil‑remedy availability and professional partnerships do not immunize transactions that are tainted at inception by fraudulent guarantees. It will likely serve as persuasive authority across courts addressing anticipatory bail in financial‑inducement cases under the BNS/BNSS regime.