Thane Court Jails Financial Advisor for 2 Years in ₹51 Lakh Investment Fraud Case

A Thane court has sentenced a financial advisor to two years of rigorous imprisonment and imposed a ₹30 lakh fine in a case of criminal breach of trust , with the amount directed to be paid as compensation to the victim.

Special court judge G T Pawar convicted Mateshwar Rajpat Giri under Section 406 of the Indian Penal Code (IPC). However, the court acquitted him of cheating under Section 420 IPC and dropped charges under the Banning of Unregulated Deposit Schemes (BUDS) Act, 2019 , stating that the law came into force after the alleged offence and cannot be applied retrospectively under Article 20(1) of the Constitution .

According to the prosecution, the case pertains to investments made between July 2017 and April 2018 . The complainant, a Thane resident who had lost her husband and brother in a road accident, invested her entire compensation and proceeds from the sale of a commercial shop, totalling ₹51.5 lakh , with Giri, who ran a financial advisory firm in Bandra, Mumbai. He allegedly promised 12% annual returns through mutual fund investments .

The court noted that the accused initially paid regular returns until January 2021 , after which he stopped payments and failed to return the principal amount. The outstanding default was calculated at around ₹18.6 lakh after partial recovery during bail proceedings.

While convicting Giri under IPC Section 406 , the court observed that he failed to produce evidence showing proper investment of the complainant’s funds, thereby establishing misappropriation and breach of trust . At the same time, it held that the prosecution failed to prove dishonest intention at the inception of the transaction , which is necessary for a conviction under Section 420 IPC (cheating).

The court also ruled that the BUDS Act could not be applied as the alleged transactions predated its enforcement in 2019. It further ordered that the ₹30 lakh fine, once recovered, be paid as compensation to the complainant. In default of payment, the accused will undergo an additional three months of rigorous imprisonment .