In a significant order balancing personal liberty with investor protection, the Supreme Court granted three months of interim bail to Pushpendra Singh Baghel, a corporate director who had remained in custody for more than 11 years.
A Division Bench comprising Justice Vikram Nath and Justice Sandeep Mehta passed the order on May 29, 2026, in Pushpendra Singh Baghel v. State of Madhya Pradesh & Ors. [Writ Petition (Crl.) No. 125 of 2026].
The Court granted interim relief to facilitate a comprehensive settlement of investor claims arising from multiple criminal proceedings pending across the country.
149 Cases Pending Across Ten States
Pushpendra Singh Baghel faced approximately 149 FIRs and criminal cases spread across ten states. These included Rajasthan, Madhya Pradesh, Uttar Pradesh, Maharashtra, Chhattisgarh, Gujarat, Haryana, Punjab, Uttarakhand, and Himachal Pradesh.
Most cases arose from the operations of Sai Prakash Properties Development Limited (SPPDL) and its associated companies.
According to the petitioner, the allegations in these cases were substantially similar.
Around 40 matters had already concluded. Of these, courts recorded five to six acquittals and nearly 35 convictions. However, a large number of trials still remain pending in different courts across India.
Allegations Relate to Unregistered Investment Schemes
The prosecution alleged that SPPDL operated an unauthorized Collective Investment Scheme (CIS).
The company invited public investments through various land development schemes. It promised investors that it would purchase and develop land before selling it for profit.
SPPDL further assured investors that it would share the profits generated from these projects.
To attract investments, the company executed Joint Venture Agreements and issued bonds. In many cases, it promised to double investors’ money within a fixed period.
However, SEBI classified these activities as a Collective Investment Scheme under Section 11AA of the SEBI Act, 1992. Therefore, the company required prior registration and regulatory approval.
Since SPPDL lacked the required registration, SEBI intervened.
SEBI Found Major Regulatory Violations
On December 26, 2014, SEBI issued an interim restraint order preventing the company from collecting fresh funds.
Later, on July 29, 2019, SEBI passed a final order after completing its investigation.
The regulator concluded that the company had violated the SEBI Act and the CIS Regulations.
According to the investigation, SPPDL mobilized at least ₹111.54 crore from investors. This amount far exceeded the ₹84.76 crore disclosed to regulators.
As a result, SEBI’s intervention disrupted the company’s ability to raise additional funds.
Subsequently, the company defaulted on investor payouts.
This led to numerous criminal complaints across multiple states. Authorities invoked offences under Sections 420, 406, 409, 467, 468, 471, and 120-B IPC.
Investigating agencies also relied on provisions of the Chit Funds Acts, the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, the RBI Act, 1934, and state-specific investor protection laws.
Petitioner Highlights Continuous Incarceration
Senior Advocate Vinay K. Garg appeared for the petitioner.
He argued that Baghel had remained in uninterrupted custody since June 27, 2015.
According to the defence, authorities repeatedly re-arrested him whenever he secured bail in one case. They then produced him in another pending matter, either within the same state or elsewhere in the country.
As a result, the petitioner remained behind bars continuously for more than 11 years.
Baghel also argued that he served as a director of SPPDL only from December 3, 2009, to June 14, 2011.
He claimed that he resigned due to ill health and filed Form-32 before the Registrar of Companies. According to him, this filing reduced his shareholding to zero and formally ended his association with the company.
Petitioner Offers Assets Worth More Than ₹250 Crore
Without prejudice to his legal defence, Baghel expressed willingness to settle all investor claims.
He filed an additional affidavit dated May 25, 2026.
The affidavit disclosed 17 high-value properties located in Noida, Jaipur, Raipur, Chhindwara, Bhopal, Umaria, Rewa, and other locations.
These properties belonged to him, his family members, and companies operating under the Sai Prakash group.
According to the petitioner, the assets carried a market value exceeding ₹250 crore.
He argued that the total outstanding investor liability remained below ₹115 crore.
Therefore, he requested temporary liberty to liquidate assets and compensate investors.
Supreme Court Creates Justice Shrivastava Committee
After considering the submissions, the Supreme Court concluded that a structured settlement mechanism would best serve the interests of investors.
Accordingly, the Bench directed the formation of a Special Committee.
Former Chief Justice Manindra Mohan Shrivastava will chair the Committee.
The Court tasked the Committee with identifying, verifying, and settling legitimate investor claims arising from the activities of Sai Prakash Assurance Services Private Limited and related entities.
To facilitate the process, the Court granted Baghel interim bail for three months across all pending jurisdictions and conviction matters.
The petitioner must furnish a personal bond of ₹10 lakh along with two sureties of the same amount.
Supreme Court Lays Down Operational Framework
The Court also established a detailed administrative framework.
Nodal Officers
The Chief Secretaries of all concerned states must appoint senior nodal officers to assist the Committee.
Documents and Records
Upon release, Baghel must hand over title deeds, revenue records, company documents, bank statements, and investor records to the Committee Chairperson.
Logistics and Expenses
The petitioner must bear all operational and logistical expenses incurred by the Committee.
Honorarium
The Court fixed an interim honorarium of ₹50 lakh for the Chairperson. Half of this amount must be paid upfront.
Legal Services Support
The Committee may also seek institutional assistance from State Legal Services Authorities.
SEBI Cooperation
The Court allowed SEBI to be impleaded as a party respondent.
It further directed the SEBI Chairman to provide complete cooperation and make all relevant records available to the Committee.
Matter Listed for September 2026
The Committee may hold meetings in New Delhi, Jaipur, Bhopal, Rewa, Noida, and other necessary locations.
Meanwhile, the Chairperson must submit an interim status report in a sealed cover by September 15, 2026.
The report will include details regarding verified investor claims and asset valuations.
The Supreme Court has listed the matter for further consideration on September 21, 2026.
At that stage, the Court will review the progress of the settlement and liquidation process.
