MUMBAI: After repeatedly exhorting authorities to produce the accused Harshawardhan Sabale, the promoter of the shady Streamcast Group involved in cheating cases in far-central Mediterranean countries like Malta, the Bombay High Court (HC) on Thursday, September 12, was outraged over Sabale's absence in the case of cheating investor Cherag Shah. Notably on August 12, the Court had issued a contempt notice against Sabale due to his failure to pay Rs 20 crores and also for leaving Mumbai in breach of the Court's order.

(Read: Rolta India's ruse with NCLT and the 'Streamcast' hoax)

In its order, the court said, “…in view of the egregiously recalcitrant, grossly disobedient, contumacious and contemptuous conduct of the Respondent and continued audacious breaches not only of the directions of this Court but also of the undertakings given to this Court, despite advice of the Respondent's Advocate to the Respondent as noted above to remain present before this Court, this Court directs the issuance of non-bailable standing warrant of arrest against the Respondent to be arrested as and where found and his presence be secured in this Court on 18th September 2024 at 10.30 a.m. without fail.”

The HC was furious about the series of falsehoods and repeated acts of deceit by Sabale and his associates, including legal counsels. The court has recorded in its order that Sabale and his team acted deliberately, willfully, and contumaciously - a chronic case bordering on swindling. 

Following the HC order, the Economic Offences Wing (EOW) of the Mumbai police filed a First Information Report (FIR) against Harshawardhan Sabale, his lawyer Sidharth Bafna of Integrum Legal, and two accomplices, Krusna Jadhav and Kishore Jadhav, to investigate the forged payment proofs/forged bank transfer receipts provided by Sabale in connection with investor Cherag Shah's complaint regarding unpaid dues of Rs 20 crore.

The fraud, fabrication, and deceit by Sabale and his group are so egregious that they defy comprehension, as noted in the HC order. The case is filled with so much deceit that it could rival any novelist or crime fiction writer, with brazen acts of deceiving the highest court in the country by producing fake evidence and falsifying facts. 

Although the court in ordered the police to issue a non-bailable arrest warrant against Sabale and directed the Police Commissioner of Mumbai to arrest him and ensure his presence in the Bombay High Court on September 18, 2024, at 10:30 am for the next hearing, however, given Sabale's dubious history, it seems unlikely that he will be easily apprehended. No one, including his legal counsel, seems to know his exact whereabouts (although the FIR suggests he is hiding at his sister's apartment in Kondhwa, Pune). Unless the police make extra efforts to track him down, he is capable of dodging to a new location.

The case concerns the non-payment of over Rs 49.53 crore to his creditor, Shah. The HC had earlier, in March, issued a non-bailable warrant against Sabale for defaulting on this payment and for failing to appear before the Court. Later, on August 12, the Court issued a contempt notice against Sabale for failing to pay Rs 20 crore and for leaving Mumbai in violation of the Court's order.

Shah had invested in a technology venture promoted by Sabale. As part of his usual scheme of preying on unsuspecting victims, in 2014, Sabale approached Shah, representing that he had developed technology capable of streaming content, making voice/video calls, and conducting conference calls over the internet using very low bandwidth (even in 2G) on any device. He claimed that an Initial Public Offering (IPO) was imminent.

Convinced by Sabale's team of the project's high potential, Shah agreed to invest. However, due to multiple misrepresentations by Sabale, Shah eventually sought arbitration. In 2018, Shah was awarded Rs 36 crore with 6% interest by the arbitrator. Sabale challenged the award in the HC, but in August 2023, the HC ruled in favor of Shah and ordered Sabale to deposit Rs 36 crore in court to delay the execution proceedings of the award until the matter was fully heard.

Since then, Sabale and his team have repeatedly misled the court, providing false undertakings and fake representations of payments via bank transfers and demand drafts but failing to deposit the Rs 49.53 crore owed to Shah.

After learning of multiple breaches of these undertakings, the execution court in February 2024 placed an injunction on Sabale's savings and DEMAT accounts and barred him from engaging in the securities market. The HC further instructed Sabale to transfer 80 lakh shares of his company, Varanium Cloud Limited (valued at Rs 50 crore), to a neutral share brokerage firm to be sold in the open market for Shah to recover his money. Sabale agreed to this order.

Despite the injunction, Sabale continued dealing in the buying and selling of shares through his savings accounts. It was later discovered that he had intentionally misled the court, and the 80 lakh shares could not be transferred or sold as they were under a lock-in period. By this point, Sabale had offloaded all the shares that were not under the lock-in and diluted his holdings in Varanium Cloud from 64% to 36%. The court also found that Sabale had siphoned off funds from multiple bank accounts and violated court orders before fleeing the country.

After more than 22 violations of affidavits and court undertakings, contempt of the HC on multiple occasions, siphoning off funds from bank accounts, and dealing in the securities market despite the injunction, Varanium Cloud's share price dropped from a high of Rs 239 to Rs 20 due to pump-and-dump operation. 

Ironically, in May 2024, in a order passed by market regulator Securities and Exchange Board of India (SEBI) against Varanium Cloud Limited and its promoter Harshawardhan Sabale, highlighted how the promoter Sabale syphoned off the money raised by the company in the IPO, falsified sales and corporate announcements to increase the share price and then sold his shares at a big profit. Overall, the promoter benefited himself for more than ₹150 cr at the cost of investors.

Meanwhile, Sabale absconded to Dubai, and repeatedly failed to appear in court, and in March 2024, the HC issued a Red Corner Notice and a non-bailable warrant (NBW) against him. The HC also froze all his savings and DEMAT accounts, sealed his Pune apartments, and barred him from trading in the securities markets.

Harshawardhan then moved the HC's double bench to overturn the order, but his request was rejected. With no other option, he approached the Supreme Court in April 2024 under a Special Leave Petition (SLP) to allow him to return to India from Dubai without being arrested. All eyes are now on the next hearing when the HC will take stock of the situation and further adjudicate, provided Sabale is produced before the court.