The Rajasthan High Court has rejected the bail plea of filmmaker Vikram Bhatt and others in connection with a cheating FIR, stating that the matter involves "dishonesty" and "deliberate diversion of funds". Justice Sameer Jain observed that the case appears to be more than a mere breach of contract, indicating prima facie evidence of misappropriation of funds. The court's decision means that the police investigation into the case will continue.

Bhatt, along with his wife Shwetambari, was arrested in December in connection with the fraud case and subsequently sent to judicial custody. An earlier request for bail on medical grounds had also been denied. Bhatt had approached the High Court seeking to quash the FIR, arguing that the matter was civil rather than criminal in nature.

The High Court, in its order, stated that the allegations extend beyond non-performance of a contract and include deliberate diversion of funds, lack of transparency, and elements of dishonesty. The court noted that the preliminary inquiry revealed evidence of fake invoices and the circulation of funds.

The case against Bhatt, his wife, and six others was filed by businessman Dr. Ajay Murdia of Udaipur. According to the FIR, Murdia met Dinesh Kataria, who proposed making a biopic on Murdia's wife, and Kataria later introduced Murdia to Bhatt in Mumbai in April 2024. The FIR alleges that Bhatt and his wife promised Murdia that an initial investment of ₹7 crore, along with further funding, would enable them to produce four films for ₹47 crore, which would yield profits of ₹100-200 crore. Murdia alleges that the accused siphoned off more than ₹30 crore by giving false assurances about the film.

Bhatt has denied the allegations, claiming that the police are being misled and that the claims are baseless. He has also questioned the authenticity of the documents presented by the complainant.

Following the rejection of the bail plea, Bhatt's lawyer indicated that a fresh bail application would be filed in the sessions court. The investigation into the case is ongoing, with the possibility of more arrests and interrogations. Previously, co-producer Mehboob Ansari and a vendor identified as Sandeep were also taken into custody.