Karnataka High Court declines to quash 11 FIRs in ₹40-crore loan fraud case

The High Court of Karnataka has refused to quash 11 First Information Reports (FIRs) registered against Mangaluru-based Roshan Saldanha and his associates for allegedly cheating multiple victims of over ₹40 crore under the guise of arranging easy loans.

The allegation show a clear “design made by the accused to hoodwink the complainants” said Justice M. Nagaprasanna while dismissing 11 petitions filed by Roshan, his wife Dafney Neethu D’Souza, and N. Chandrashekar of Chitradurga, an associate of Roshan.

The FIRs were registered on complaints lodged by businessmen and professionals from Mumbai, Hyderabad, Lucknow, Bengaluru, and Kerala.

Similar modus operandi

The alleged modus operandi of Roshan was similar in all cases as he and his agents promised large loans, ranging from ₹6 crore to ₹250 crore, at exceptionally low interest rates of 4-6% per annum.

Victims were then asked to pay 2% of the loan amount as “stamp duty” or “security deposit,” running into crores.

After the money was transferred to designated bank accounts of the accused, often in the names of shell entities like Balaji Enterprises, Akshaya Agency, or Sri Sai Consultants, the accused allegedly went silent or avoided taking calls or made false excuses for delay.

It was argued on behalf of the petitioners that the disputes were purely civil in nature and that criminal law had been set in motion only to recover money. They contended that the complainants should have filed civil suits instead.

Rejecting this argument, the High Court, relying on several verdicts of the Supreme Court, said that the existence of civil remedies does not bar criminal prosecution where the allegations disclose essential ingredients of an offence.

The projection that it is purely a civil transaction and there is no nexus between the amounts deposited into the accounts to which the petitioners/accused have no nexus, are all matter of investigation as it is not one case or one complainant, the court observed.

“In every case the complainants are lured into transactions, money is transferred, and nothing comes about. The matter requires investigation in the least. The accused are said to have hoodwinked several people after luring them into respective transactions. Therefore, there can be no question of interdicting the investigation,” the court said.