Bombay HC calls 2017 arrest of businessman illegal, orders Maharashtra to pay Rs 5 lakh

The Bombay High Court has declared the 2017 arrest of businessman Bipin Satish Chandra Agarwal illegal. It has directed the Maharashtra government to pay Agarwal Rs 5 lakh as compensation. In its ruling, the court said a police sub-inspector, together with developer Bhavesh Seth, framed Agarwal in a false extortion case.

The case concerns the redevelopment of New Aarti Co-operative Housing Society in Andheri East. The incident took place on August 4, 2017. Agarwal was negotiating on behalf of his 70-year-old mother-in-law, who owns a flat in the society. He was talking to developers Bhavesh Seth and Kamlesh Vora about either selling the flat or getting a larger flat and transit rent in the redeveloped building.

The two sides met at the developers' office in Marine Lines and agreed on a price of Rs 1.64 crore. The developers gave Agarwal Rs 2 lakh in cash as advance for the deal. A few minutes later, police arrived at the office, handcuffed Agarwal and took him to Azad Maidan police station. An FIR was registered against him under Section 384 of the Indian Penal Code, which deals with extortion.

Agarwal says the money was a legitimate advance for the property, not extorted money. He alleges that the developers, with the help of a police sub-inspector, framed him to cover up scams in redevelopment.

The High Court found serious irregularities in the police records. The arrest form had been altered, and the times of the FIR and the arrest also differed. The court found no evidence that Agarwal was given a genuine opportunity to comply with a legal notice before the arrest. It held the arrest and the custody that followed illegal. It also expressed displeasure that the magistrate granted further custody without recording adequate reasons. In its ruling of October 22, 2026, the court ordered action against the police and initiated an inquiry into the magistrate's role.

Agarwal said, "Justice always prevails. These were the most terrible nine years of my life, yet I had faith in our justice system." He said he fought the case himself, without a lawyer. According to him, living with an FIR attached to his name was far harder than standing before judges to argue the case. He faced social, professional and mental difficulties of every kind. When there were differences, people used this to silence him. After word spread, his business also suffered several losses. Being unable to travel abroad cost him many important opportunities and business trips. In Agarwal's words, the loss is far greater than this list.

Agarwal also said the judgment has removed the stain of the FIR, but the other losses have not been made good. If the developers and the state government approach the Supreme Court, he said, he is fully prepared for every legal challenge.

Bhavesh Seth has denied the allegations. He claims there are more complaints against Agarwal at his home and office. Seth said, "We will appeal in the Supreme Court and challenge the High Court's order. I stand by my complaint. We have all the evidence that Agarwal was demanding a huge sum from us."

The High Court has ordered the state to suspend Assistant Police Inspector Mahesh Lamkhade. He denied any connection with Seth. Lamkhade said, "My record has been clean throughout my career. The state has also begun the process of appealing in the Supreme Court. The matter is sub judice, so I cannot say much, but I have done nothing wrong."