The legal woes for Bollywood actor Shilpa Shetty and her husband, businessman Raj Kundra, have intensified significantly. The Economic Offences Wing (EOW) of the Mumbai Police has officially invoked Section 420 (cheating) of the Indian Penal Code (IPC) against the couple in an ongoing investigation involving an alleged fraud of over ₹60 crore.
The case, which centers on a complaint filed by businessman Deepak Kothari, director of Lotus Capital Financial Services, has reached a critical stage. The EOW recently informed the court that it has gathered substantial fresh material, including electronic evidence and witness testimonies, which allegedly points toward the couple’s involvement in diverting funds for personal gain.
The dispute traces back to a deal involving the couple’s now-defunct home shopping and online retail platform, Best Deal TV Pvt Ltd. According to the FIR, the complainant, Deepak Kothari, was induced to provide a loan-cum-investment of ₹60.48 crore between 2015 and 2023.
Key allegations in the EOW investigation include:
- The “Investment” Pivot: Kothari claims the couple initially sought a loan of ₹75 crore but later persuaded him to route the funds as an “investment” to avoid higher taxation, promising monthly returns and principal repayment.
- Diversion of Funds: The EOW alleges that instead of using the ₹60.48 crore for business expansion as agreed, the couple diverted the money for personal expenses and other non-business benefits.
- Misleading Guarantees: Kothari asserts that despite personal guarantees from Shetty, he discovered that insolvency proceedings had been initiated against the company as early as 2017 without his knowledge.
During a recent hearing on December 17, 2025, the EOW confirmed that it has transitioned from the initial charges of criminal breach of trust (Section 406) to the more serious charge of cheating under Section 420. This move follows months of interrogation, including a four-and-a-half-hour session with Shilpa Shetty at her residence.
A statement issued by the complainant’s legal team, YNA Legal LLP, emphasized the strength of the case:
“The witness testimonies and electronic evidence gathered so far point towards the couple being guilty of allegedly defrauding the businessman Deepak Kothari of more than ₹60 crore. EOW has submitted all the gathered information and evidence to the court.”
The EOW has also maintained a Lookout Circular (LOC) against the couple, arguing that they are at risk of fleeing the country. This led the Bombay High Court to recently order the couple to deposit the full ₹60 crore or furnish a bank guarantee if they wish to travel abroad for personal or professional reasons.
Shilpa Shetty and Raj Kundra have consistently denied all allegations, terming the case “baseless and malicious.” Their legal counsel, Advocate Prashant Patil, argues that the entire matter is purely civil in nature and stems from a failed business venture.
The defense highlights several points:
- Impact of Demonetisation: The couple attributes the collapse of Best Deal TV to the November 2016 demonetisation, which crippled the cash-on-delivery (COD) model the business relied upon.
- NCLT Adjudication: They claim the matter has already been addressed by the National Company Law Tribunal (NCLT) and that they have provided exhaustive financial records and cash flow statements to the EOW to prove their innocence.
- Limited Involvement: Shilpa Shetty’s plea states she was not involved in the day-to-day operations and resigned as a director in 2016, alleging her name was dragged in solely for “character assassination.”
As the EOW submits its final findings to the court, the legal battle is set to intensify, with the couple facing a potential chargesheet if the court finds the evidence of cheating sufficient.
