In a significant legal development, the Rajasthan High Court on Monday dismissed a petition filed by Bollywood filmmaker Vikram Bhatt, who sought the quashing of a First Information Report (FIR) registered against him and his associates in Udaipur. The court observed that the allegations involved serious financial irregularities and deliberate diversion of funds, rather than a simple contractual breach.
Court Finds Prima Facie Criminal Intent
Justice Sameer Jain, presiding over the case, refused to interfere with the ongoing police investigation. The court's order stated that the case prima facie discloses criminal intent and is not merely a civil dispute over a broken contract. "The allegations are not confined merely to non-performance of a contract; they involve deliberate diversion of funds, lack of transparency, and elements of dishonesty," the court noted in its ruling.
The judge emphasized that the police probe must continue unimpeded, given the serious nature of the accusations. The court also took cognizance of the fact that the Bombay High Court had previously rejected Bhatt's anticipatory bail application in the same matter.
Allegations of Fund Diversion and Fake Invoices
The FIR was lodged by Ajay Murdia, a resident of Udaipur, accusing Vikram Bhatt, his wife Shwetambari Bhatt, and others of cheating and criminal breach of trust. The complaint alleged that funds collected for a film project were misappropriated.
Opposing Bhatt's quashing plea, the respondent's counsel informed the court that a police preliminary inquiry had substantiated the allegations of fund misappropriation. It was revealed that money intended for film production was transferred to vendors and individuals unconnected to the project.
The High Court, in its order, pointed to evidence uncovered during the preliminary investigation. "The preliminary inquiry has revealed evidence of fake invoices and the circulation of funds," the court stated, underscoring the reasons for refusing to grant relief to the filmmaker.
Bhatt's Defense and the Court's Rejection
Arguing for the petitioner, Bhatt's counsel contended that the dispute was purely contractual and civil in nature, arising from a breach of an agreement between two parties. The counsel stated that an agreement was signed to produce four films with an initial investment of Rs 40 crore, followed by an additional Rs 7 crore.
It was claimed that one film had been completed, but the complainant (Ajay Murdia) allegedly stopped further funding, leading to the disagreement. The defense also argued that as per the agreement, Mumbai—not Udaipur—had jurisdiction over any disputes.
The court, however, was not convinced by these arguments. It reiterated the legal principle that when a cognisable offence is prima facie established, the High Court should not obstruct an ongoing investigation. This dismissal marks a setback for Vikram Bhatt, who is currently lodged in jail along with his wife in connection with this case.
