A special court in Mumbai handling Maharashtra Protection of Interest of Depositors (MPID) cases has refused to add property purchasers Jitendra Shah and Kirti Shah as accused in an ongoing ₹22.37 crore investment fraud case. The property in question had been bought from Amit and Prakash Masalia—accused of orchestrating the scam through Cosmo Investment and Athena Investment. The two buyers paid ₹2.6 crore, but Judge N.G. Shukla held that since they had no role in managing the firms or the alleged fraudulent financial conduct, they could not be prosecuted under the Act.
The ruling came in response to a plea by investor Arvind Solanki, who alleged that the transaction was a mala fide attempt to circumvent legal asset attachments under the MPID Act.
Timeline of Alleged Fraud and Legal Tussle
The core of the fraud case centers on allegations that Amit, Prakash, Dina, Payal, and Mayank Doshi—residents of Juhu and directors of the two investment firms—collected large sums from 42 investors promising hefty returns. After failing to return the invested funds with interest, victims approached authorities, leading to charges under the MPID Act in 2018.
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During anticipatory bail hearings, the accused returned some of the defrauded money and were granted relief. A key asset—a commercial office in Andheri West—was released by the court and later sold by the accused for ₹2.75 crore. After a nominal ₹15 lakh upfront, ₹2.6 crore was paid to 34 investors at the direction of the sellers. Solanki alleged this was a calculated move to selectively repay investors and manipulate the case.
Court Rejects ‘Agency’ Argument, Clears Buyers
The court firmly rejected the argument that the Shahs acted as “agents” of the original accused. Judge Shukla noted that the Shahs were not involved in the day-to-day functioning of Cosmo or Athena Investments and had no fiduciary or managerial responsibility. Their role was limited to fulfilling their buyer obligations—paying the amount as directed, and completing the transaction.
The court emphasized that legal action under the MPID Act must be limited to those with direct culpability or control over fraudulent establishments, not third-party buyers following contractual instructions. The ruling sets a precedent in distinguishing commercial transactions from criminal liability in fraud-linked real estate transfers.