Madras High Court Grants Interim Bail to Devanathan Yadav in Chit Fund Scam Case

CHENNAI, Sept 16, 2025 – The Madras High Court has granted interim bail to T. Devanathan Yadav, the managing director of the Mylapore Hindu Permanent Fund Nidhi Ltd., who has been in custody since August 13, 2024, in connection with a large-scale financial fraud involving thousands of depositors.

The court, while granting bail, laid down strict conditions, including the deposit of ₹100 crore by October 30, 2025, and regular appearances in court, as it emphasized the need to balance the rights of the accused with the interests of the aggrieved depositors.

Background of the Case

Devanathan Yadav was arrested by the Economic Offences Wing (EOW) of Tamil Nadu Police for allegedly defrauding over 4,000 depositors through the Mylapore Hindu Permanent Fund Nidhi Ltd. The company is accused of collecting deposits by promising high returns and failing to repay investors after the maturity of their funds.

The total amount involved in the scam is estimated to be between ₹550 crore and ₹619 crore, depending on various depositors’ claims and ongoing investigations.

Since his arrest, Yadav has been lodged in judicial custody, and the EOW has attached and identified a portion of his properties. However, progress in actual recovery for depositors has been minimal, with less than ₹35 crore worth of assets seized so far.

Bail Conditions Imposed

Justice G. Jayachandran, who presided over the bail hearing, granted Yadav interim bail until October 30, 2025, under the following conditions:

• Yadav must deposit ₹100 crore from his personal funds into the TNPID (Tamil Nadu Protection of Interests of Depositors) court account by the deadline.

• He must furnish a bond of ₹10 lakh along with two sureties for the same amount.

• His passport must be surrendered immediately.

• He is required to appear every Monday before the Special Court for TNPID cases in Chennai until the bail period ends.

• He must begin selling properties listed in his affidavit (which reportedly includes 76 assets valued at over ₹600 crore) and report progress to the court.

• All property sales must receive prior approval from the court and consent from the prosecution.

• Yadav must surrender himself voluntarily after the interim bail period ends, unless further relief is granted by the court.

Arguments Presented in Court

Counsel for Devanathan Yadav argued that the accused was ready to begin liquidating his assets to repay the depositors, and keeping him in custody was preventing any practical progress in recovery. They submitted a list of properties valued at ₹633.97 crore, claiming that the asset value exceeded the liability of ₹561.48 crore.

The defense stressed that releasing Yadav on interim bail would enable him to negotiate sales and settle outstanding dues in a structured and monitored way.

On the other hand, the prosecution opposed the bail plea, pointing out that many of the declared properties were overvalued. According to government guideline values, the total recoverable value of the assets was around ₹49 crore, significantly lower than claimed.

The prosecution also raised concerns about Yadav potentially influencing witnesses or tampering with evidence if released.

Court’s Observations

The court acknowledged the complexity and seriousness of the case, but also expressed concern that despite over a year of incarceration, little benefit had reached the depositors. Justice Jayachandran noted that:

“The continued incarceration of the petitioner has not yielded substantial recovery for the depositors. Allowing the accused an opportunity to mobilize funds and sell properties, under court supervision, is in the larger interest of justice.”

The court clarified that the bail is interim in nature, and its continuation will depend on Yadav’s strict adherence to the conditions, especially the ₹100 crore deposit deadline.

Next Steps

The case is being closely watched across Tamil Nadu, especially by victims who have lost life savings in the chit fund scam. If Yadav fails to comply with any of the court's directions, his bail could be revoked, and further legal consequences could follow.