The Bombay High Court has granted urgent interim relief in a case involving the siphoning of over Rs. 8 crores by a former HR executive through fabricated payroll disbursements. The order establishes a clear precedent for courts to compel full asset disclosure and impose restraining orders against defendants accused of large-scale financial fraud, even before trial.
Background & Facts
The Dispute
The plaintiff, Vertiv Energy Private Limited, a corporate entity, filed a civil suit against its former employee, Sandeep Sitaram Ambre, alleging systematic fraud involving the diversion of company funds over several years. The defendant, who served as in-charge of the Human Resources Development Department, exploited his access to payroll systems to create fictitious employee claims and direct payments into his personal bank accounts.
Key Facts
- The defendant was employed by the plaintiff from an unspecified date until his termination on 01.12.2025
- He was responsible for liaising with the Pay and Accounts Department regarding employee payouts upon retirement or relieving
- Between 2021 and 2025, he submitted forged bills and letters in the names of non-existent or inactive employees
- These fraudulent requests resulted in over Rs. 8 crores being transferred from the plaintiff’s accounts to the defendant’s personal bank accounts
- The fraud was detected during an internal audit conducted in late 2025
- The defendant executed two confession letters dated 01.12.2025 and 11.12.2025, admitting to the fraudulent acts
- In the confession letters, the defendant acknowledged that Rs. 2.13 crores had been repaid to the plaintiff
- He further admitted that the remaining balance (over Rs. 5.87 crores) had been invested in bank accounts and real estate properties
- Criminal proceedings have been initiated against the defendant by the plaintiff
Procedural History
- 01.12.2025: Defendant executed first confession letter admitting to fraud
- 11.12.2025: Defendant executed second confession letter reaffirming admission and detailing asset investments
- Undated: Suit (L) No. 5690 of 2026 filed in the Bombay High Court seeking recovery of siphoned funds, damages, and compensation
- 02.04.2026: Interim Application (L) No. 5690 of 2026 filed seeking asset disclosure and injunction
- 02.04.2026: Hearing held before Justice Milind N. Jadav
Relief Sought
The plaintiff sought:
- Disclosure on oath of all assets acquired by the defendant from 2021 to date, including movable and immovable property, bank accounts, investments, and transaction details
- Production of bank statements and income tax returns for the last five years
- An injunction restraining the defendant from selling, transferring, encumbering, or creating third-party rights over any assets acquired using the siphoned funds
Procedural History (Post-Hearing)
- 02.04.2026: Court issued ad-interim order granting relief
- 15.04.2026: Next date of hearing fixed
- Defendant directed to file affidavit-in-reply
- Plaintiff directed to serve copy of order, suit, and application on defendant with proof of service
The Legal Issue
The central question was whether a plaintiff alleging large-scale financial fraud by a former employee is entitled to interim relief in the form of mandatory asset disclosure and prohibitory injunction to prevent dissipation of assets, even before trial and without conclusive proof of ownership of the disputed assets.
Arguments Presented
For the Appellant/Petitioner
Mr. Karl Tamboly, counsel for the plaintiff, argued that the confession letters constituted prima facie evidence of fraud and admission of liability. He submitted that the defendant had admitted to investing over Rs. 5.87 crores in bank accounts and real estate, creating a clear risk of asset dissipation. He relied on the principle that courts must act swiftly to preserve the subject matter of litigation in cases of financial fraud, citing S. P. Gupta v. Union of India for the doctrine of equitable relief. He emphasized that the defendant’s conduct was not merely civil but involved criminal intent, warranting extraordinary interim measures.
For the Respondent/State
The defendant did not appear before the court. No counter-arguments were presented. The court proceeded ex parte on the basis of the plaintiff’s submissions and documentary evidence.
The Court's Analysis
The Court found that the plaintiff had established a prima facie case of fraud supported by documentary evidence, including two signed confession letters from the defendant. The Court noted that the defendant had not only admitted to the siphoning of funds but also disclosed the destination of the remaining proceeds - bank accounts and real estate. This admission, the Court held, created a compelling need to prevent further dissipation.
"Prima facie on the basis of the aforesaid facts which are seen from the record, an arguable case has been clearly made out by Mr. Tamboly for passing urgent directions in terms of Interim Application which has been filed."
The Court applied the well-established test for interim injunctions under Order XXXIX Rules 1 and 2 of the CPC, finding that the balance of convenience favored the plaintiff. The risk of irreparable harm - permanent loss of over Rs. 5.87 crores - outweighed any inconvenience to the defendant. The Court further held that the nature of the fraud, involving fiduciary betrayal and deliberate concealment, justified the extraordinary remedy of mandatory disclosure.
The Court emphasized that the defendant’s voluntary confession, even if made outside court, was admissible as an admission under Section 17 of the Indian Evidence Act, 1872, and formed the basis for the interim order. The Court also noted that the defendant had already repaid Rs. 2.13 crores, indicating awareness of liability and a pattern of partial compliance, which further supported the plaintiff’s credibility.
The Verdict
The plaintiff succeeded. The Court granted ad-interim relief under prayers (a) and (c) of the interim application. The defendant is directed to disclose on oath all assets acquired from 2021 to date, including full particulars of bank accounts, real estate, investments, and transactions over the last five years, and to produce bank statements and income tax returns for the same period. An injunction is imposed restraining the defendant, his agents, or anyone claiming through him, from selling, transferring, encumbering, or creating third-party rights over any assets acquired using the siphoned funds. The defendant must file an affidavit-in-reply by 15.04.2026. The plaintiff must serve a copy of the order and suit on the defendant with proof of service.
What This Means For Similar Cases
Asset Disclosure Can Be Ordered Prima Facie
- Practitioners may now seek mandatory asset disclosure in civil fraud cases even before trial, provided confession letters or documentary evidence establish a prima facie case
- Courts are likely to treat admissions in extrajudicial confessions as sufficient grounds for disclosure orders under Order XI Rule 1 CPC
Injunctions Against Dissipation Are Standard in Financial Fraud
- In cases involving siphoning of corporate funds, courts will routinely grant prohibitory injunctions over assets traceable to the fraud
- The burden shifts to the defendant to prove legitimate source of assets once fraud is prima facie established
- This applies equally to real estate, foreign accounts, and nominee holdings
Timing Is Critical for Preservation
- Applications for interim relief must be filed promptly after discovery of fraud
- Delay in seeking injunction may be viewed as acquiescence, especially if assets are transferred during litigation
- Proof of service of court orders must be meticulously documented to ensure enforceability
