Orissa High Court refuses bail to Hedgex Fund accused in deposit case

The Economic Offences Wing (EOW) of the Odisha Crime Branch is prosecuting an unregulated-deposit case built around Hedgex Fund LLP, and the matter has now reached the trial stage after the Orissa High Court refused bail to the man the agency describes as its state-level fund collector. No court has convicted anyone, and this report treats the allegations as allegations.

What the Record Shows

The EOW arrested Pratap Kumar Rout on 18 October 2025 in its investigation into Hedgex Fund LLP, an entity the agency alleges ran an unregulated deposit scheme spanning ten states. The matter is registered as EOW, Bhubaneswar PS Case No. 14 of 2025, under Sections 420, 467, 468, 471 and 120-B of the Indian Penal Code, read with Sections 4, 5 and 6 of the Prize Chits and Money Circulation Schemes (Banning) Act, Sections 21(1), 21(3) and 23 of the Banning of Unregulated Deposit Schemes (BUDS) Act, 2019, the Odisha Protection of Interests of Depositors Act, and Section 66D of the Information Technology Act.

Since the arrest, the case has moved. A chargesheet has been filed, and on 26 February 2026 the Orissa High Court refused Rout's bail application in BLAPL No. 11405 of 2025, citing the nature and gravity of the alleged offences and the material the prosecution had placed on record. The court's observations at the bail stage are prima facie; a refusal of bail is not a finding of guilt, and the trial is pending.

The EOW describes Rout as its Odisha-level fund collector rather than the promoter of the scheme. The High Court order records that, per the prosecution, he was employed by Hedgex Fund and managed its day-to-day affairs in the state while inducing investors. He is an accused person whose case is yet to be tried.

How It Worked

Hedgex Fund LLP was registered with the Registrar of Companies at Goa in 2023, per the case record. According to the EOW, its representatives ran promotional meetings in Cuttack and Bhubaneswar that offered monthly returns of 11 to 18 per cent, presented as the proceeds of forex investment. The agency alleges that small periodic payouts were made early on to build credibility and draw in larger deposits, and that once collections had grown, operations were shut abruptly.

The prosecution's case, as summarised in the High Court order, is that money was gathered through multiple third-party bank accounts and moved on through cash and informal channels, which makes tracing harder. The chargesheet alleges that Rout used forged documents to extract Rs 92,60,480 from the informant, and that a further Rs 14,34,623 was received in his personal account. These are allegations the trial court is yet to test.

The procedural history is straightforward. On a complaint by an investor, Bijay Kumar Panigrahy, who said he had put in Rs 92.6 lakh of retirement savings, the EOW registered its case and arrested Rout on 18 October 2025, producing him before the designated court. The investigation proceeded to a chargesheet, and Rout's attempt to secure bail failed before the High Court on 26 February 2026. The court noted that he could renew the request before the trial court once the chargesheet material was fully before it.

Who Lost Money

The EOW has put the number of affected depositors at more than three lakh nationally, of whom over 12,000 are in Odisha, per the agency. The Odisha collections it has reconciled stand at about Rs 139 crore. A larger figure of over Rs 1,000 crore has been reported for the scheme across all ten states, but that is the EOW's working national estimate rather than a reconciled or court-established number, and it should be read as such.

What depositors have recovered so far is limited. Money that passes through multiple third-party accounts and informal channels is slow and difficult to trace, and any restitution in a deposit case of this kind follows the conclusion of investigation and trial, through attachment and distribution under the depositor-protection statutes invoked. At this stage the headline sums represent what was allegedly collected, not what has been recovered for those who paid in.

The single documented loss on the record is the informant's. The chargesheet alleges he was induced to part with Rs 92,60,480, a sum described as retirement savings. Thousands of other depositors across the named states are said by the EOW to be in a similar position, their claims to be established as the case proceeds.

Where It Stands Now

The current position has moved beyond the investigation snapshot. A chargesheet has been filed, Rout remains in custody after the Orissa High Court refused his bail on 26 February 2026, and the matter is before the trial court as Court Case No. 17 of 2025. The High Court's refusal turned on the gravity of the alleged offences and the material on record; it did not decide the question of guilt, which is for the trial.

The EOW's wider investigation into the scheme's national network and its other participants may continue separately, given the multi-state spread and the sister concerns named alongside Hedgex Fund LLP. Readers can follow the desk's other coverage in the enforcement archive, including a comparable gold-savings deposit matter in Tamil Nadu.

The registration of an FIR, the arrest, the chargesheet and the refusal of bail are steps in a prosecution; they are allegations and procedural findings, not a conviction. The accused is presumed innocent until proven guilty, and due process continues.

What It Means

The statutes invoked here are the household-finance safety net for exactly this pattern. The BUDS Act, 2019 bans deposit schemes that are not registered with a financial regulator, and the Prize Chits and Money Circulation Schemes (Banning) Act targets money-circulation models that pay early joiners from later joiners' funds. When those laws are invoked, it is a signal that the scheme was operating outside the regulated-deposit framework in the first place.

The arithmetic offered here is the clearest warning sign. A return of 11 to 18 per cent a month compounds to figures no genuine forex or market strategy can sustain, and a promised monthly payout is only as real as the next depositor's cash. A tool such as Oquilia's SIP calculator shows what disciplined monthly investment realistically builds at ordinary market returns, which makes the gap between a genuine return and a promised one easy to see.

The practical takeaway is to verify before parting with money: check whether an entity accepting deposits is registered to do so, use the RBI's Sachet portal to check and report unregistered collection schemes, and treat a guaranteed high monthly return as a reason to walk away rather than a reason to invest. For related enforcement coverage, see our report on a Rs 60 crore fake input-tax-credit arrest.

FAQ

Has any court found the accused guilty?

No. No court has convicted anyone in this matter. The Orissa High Court refused bail on 26 February 2026, but a refusal of bail is a procedural decision based on the gravity of the allegations and is not a finding of guilt. The accused is presumed innocent until proven guilty, and the trial is pending.

What is the BUDS Act and why does it apply here?

The Banning of Unregulated Deposit Schemes Act, 2019 prohibits accepting deposits under schemes that are not registered with a financial regulator, and lets authorities attach assets to repay depositors. The EOW invoked its provisions alongside the Prize Chits and Money Circulation Schemes (Banning) Act because it alleges Hedgex Fund LLP was taking deposits it was not authorised to take.

Why do the Rs 1,000 crore and Rs 139 crore figures differ?

The roughly Rs 139 crore figure is the amount the EOW says it has reconciled for Odisha alone, across more than 12,000 depositors. The figure of over Rs 1,000 crore is the agency's working estimate for the scheme across all ten states and has not been court-established. The Odisha number is the firmer of the two.

Have depositors got their money back?

Not at this stage. Recovery in an unregulated-deposit case follows investigation, trial and the attachment and distribution of assets under the depositor-protection statutes. Because collections were allegedly routed through multiple third-party accounts and informal channels, tracing is slow, and any distribution will be a fraction of the sums claimed.

Where can I read the official record?

The Orissa High Court's bail order in BLAPL No. 11405 of 2025 is published on Indian Kanoon and sets out the EOW case number, the sections invoked and the prosecution's allegations. The underlying investigation and chargesheet files are not public while the trial is pending.

This report is based on the order of the Orissa High Court in BLAPL No. 11405 of 2025 dated 26 February 2026 and the EOW, Bhubaneswar PS Case No. 14 of 2025, reviewed on 3 August 2026.