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The Supreme Court has directed a Magistrate’s court to proceed with trial in an INR 50 crore cheque dishonour case linked to a financial dispute between members of the Sheth real estate family. The case involves allegations of fraud, breach of trust and misconduct against financier Viren Gala, who had acted as a guarantor in a 2021 settlement concerning share transfers in Sheth group entities. The cheque issued as part of the arrangement was later dishonoured, triggering legal proceedings. Earlier orders setting aside the complaint have been overturned, reviving the case for judicial examination amid questions over escrow assurances and intermediary roles in high-value settlements.
The Supreme Court has directed a Magistrate’s court to proceed with trial in a cheque dishonour case involving INR 50 crore, reviving allegations of fraud, breach of trust and financial misconduct arising from a dispute within a Mumbai-based real estate family. Advertisement
The matter relates to a 2021 settlement between Ashwin Sheth and Renuka Sheth concerning the transfer of shares in Sheth Developers & Realtors (India) Limited and Sheth Developers Private Limited. The arrangement was mediated by financier Viren Bhavanji Gala, who was stated to have acted as a guarantor in the transaction.
Under the terms of the settlement, Ashwin Sheth had agreed to pay INR 50 crore to Renuka Sheth in exchange for withdrawal of pending complaints. According to the complaint, Gala assured that the agreed amount would be secured in escrow until payment completion and issued a personal cheque of INR 50 crore in favour of Renuka Sheth to support the arrangement.
Renuka Sheth has alleged that she relied on these assurances and executed a withdrawal document with the understanding that it would not be handed over until the payment was fully received. However, she claims that the document was released prematurely to Ashwin Sheth, enabling him to proceed with a transaction involving Sheth Developers & Realtors (India) Limited.
Subsequently, the entity, which owns Viviana Mall in Thane, was sold in a transaction reportedly valued at around INR 1,900 crore to an investment platform backed by the Abu Dhabi Investment Authority. Renuka Sheth has stated that she became aware of this development only after the transaction had been completed.
Following the alleged breach, she deposited the cheque issued by Gala, which was subsequently dishonoured. After issuing a legal notice seeking payment, she has alleged that Gala denied liability, leading to the initiation of legal proceedings under Section 138 of the Negotiable Instruments Act.
The complaint was initially admitted by a Magistrate’s court, which issued process. However, subsequent orders by the Sessions Court and the High Court set aside the proceedings, effectively halting the case.
Challenging these decisions, Renuka Sheth approached the Supreme Court through a Special Leave Petition. The apex court has now overturned the earlier orders and directed that the complaint be restored and the matter proceed to trial before the Magistrate’s court.
The case has also drawn attention to Gala’s professional associations and financial dealings. He is linked to entities such as WSB Real Estate Partners Private Limited and firms associated with BlackSoil Capital. Transactions involving Sheth Abode LLP, an entity previously linked to Ashwin Sheth and later associated with Gala, are also expected to be examined as part of the proceedings.
The dispute raises broader questions regarding the role of intermediaries and guarantors in high-value financial settlements, particularly where escrow assurances form a key component of transaction security. The trial is expected to examine not only the issue of cheque dishonour but also the wider allegations of breach of fiduciary duty and the integrity of the settlement process.
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