Rs.41.91 crores Investor Fraud: Telangana HC grants Anticipatory Bail to Accused considering No Direct Financial Dealings [Read Order]
The Court held that the petitioner was neither a partner nor a director in the company and that custodial interrogation was unnecessary.
Anticipatory - bail - taxscan
Anticipatory - bail - taxscan
The Telangana High Court has granted anticipatory bail to one of the accused in an alleged ₹41.91 crore investor fraud case investigated by the Economic Offences Wing (EOW) observing that there are no financial transactions or no partnership in the business dealings.
The Court, presided over by Justice K. Sujana, observed that there were no direct financial transactions between the petitioner and the complainant, and hence custodial interrogation was not required.
A complaint lodged on 16 September 2025, wherein the de facto complainant accused Smt. M. Sandhya Rani, her husband Namburi Sridhar, their son Koushik, P. Subba Raju, Y. Ramdas, and others of cheating him into investing huge sums in a textile and garment business under the name “Sri Sai Ram Enterprises.”
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The accused allegedly presented fake purchase orders, forged GST and TDS receipts, and fabricated documents to induce the complainant to invest ₹41.915 crores into accounts controlled by them. When the complainant demanded repayment, he was allegedly threatened and denied his money.
The petitioner’s counsel, Adv. D. Jagadishwar Rao, contended that Subba Raju was himself a victim of Sandhya Rani’s fraud and had no role in financial transactions or direct dealings with the complainant.
He maintained that the petitioner merely introduced the complainant to the co-accused and derived no monetary benefit. It was also argued that all documents and bank records show that funds were transferred directly to the co-accused and not to the petitioner.
Conversely, the Additional Public Prosecutor, D. Arun Kumar, opposed the plea, asserting that the petitioner played a key role in inducing investment by vouching for the co-accused and participating in the fraudulent scheme.
The prosecution argued that the petitioner was absconding, had switched off his mobile, and posed a flight risk, stating the need for custodial interrogation to trace the diverted funds and uncover the full conspiracy.
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After examining the evidence, Justice K. Sujana noted that the complainant had personally visited Sri Sai Ram Enterprises, verified the premises, and interacted with the co-accused before investing, indicating that the investment decision was not based solely on the petitioner’s introduction. The Court held that the petitioner was neither a partner nor a director in the company and that custodial interrogation was unnecessary.
Accordingly, the Court allowed the anticipatory bail petition, directing Subba Raju to surrender before the EOW Police Station, Cyberabad, within two weeks. After surrender, he is to be released on a personal bond of ₹50,000 with two sureties, and must appear before the investigating officer every Wednesday for eight weeks and cooperate fully with the investigation as per Section 482(2) of the Bharatiya Nyaya Sanhita (BNSS).
The case, involving allegations under Sections 316(2), 318(4), 336(3), and 340 read with 61(2) of the Bharatiya Nyaya Sanhita, 2023, and Section 5 of the Telangana Protection of Depositors of Financial Establishment Act, 1999, continues to be under investigation.
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