Bombay HC Sentences 1992 Scam Stockbroker Pallav Sheth to Jail for Contempt
The Bombay High Court has sentenced 70-year-old stockbroker Pallav Sheth to one month of simple imprisonment and imposed a fine of Rs 2,000 for contempt of court after finding him guilty of deliberately concealing bank accounts and financial transactions during his insolvency proceedings, including an undisclosed account in Nariman Point.
Justice NJ Jamadar handed down the order on August 7, 2026, with the detailed ruling made available on Monday, August 10. The court also reopened Sheth’s public examination and permitted the Official Assignee to take steps to recover his undisclosed assets.
The contempt proceedings originated from a petition filed by Canbank Financial Services Ltd, a creditor holding a decree against Sheth, whose name was featured prominently in the 1992 securities scam. In 2024, Canbank approached the High Court after a third party alerted it that Sheth was actively conducting financial transactions through an undisclosed ICICI Bank account.
Subsequent court proceedings revealed that Sheth had failed to disclose multiple accounts held with ICICI Bank, Model Co-operative Bank, and HDFC Bank, despite having previously undertaken to provide a full disclosure of his assets.
According to bank records presented in court, the ICICI Bank account at Nariman Point was opened in January 1999 and accumulated credits of Rs 10.50 crore. Sheth initially claimed in an affidavit that the account was opened only in September 2022. When bank records contradicted his statement, he altered his stand to argue that court permission was not required because the account predated his insolvency declaration. The court observed that his changing explanations showed an intent to alter his defence for convenience.
The court also cited an undisclosed Model Co-operative Bank account opened in January 2003, which Sheth claimed belonged to his wife, though bank records proved it was registered in his own name. Furthermore, an HDFC Bank account opened in February 2019 recorded 192 credit transactions and 639 debit transactions, totaling approximately Rs 4.67 crore each way.
Sheth contended that more than Rs 6.5 crore received from an individual identified as "L" was compensation for legal consultancy. He further claimed he had not engaged in any trade or business for 30 years, described the funds as loans from a neighbour, and requested leniency on account of his age.
Justice Jamadar rejected his explanations and apology, ruling that Sheth submitted affidavits containing deliberate false statements. Finding him guilty under Section 33(4) of the Insolvency Act, 1909, the court held that his suppression of financial accounts and transactions was deliberate.
