The controversy escalated on Tuesday when Bhatt’s co-producer Mehboob Ansari and vendor Sandeep Trilobhan were arrested and presented before a Udaipur court. Both have been remanded to police custody until November 23.

In an interview to ANI, Bhatt said he had not received any formal notice. “I think the Rajasthan Police is being misled. I have not received any letter, no notice, nothing,” he said, adding that the complainant must produce written proof to back his claims. Bhatt questioned the allegations by noting that multiple films had been initiated with Murdia’s involvement. “If I was cheating them, why did they make a third film with me?” he said.

The complaint alleges that Murdia was persuaded by associate Dinesh Kataria to fund a biopic, leading to a meeting with Bhatt in Mumbai on April 24, 2024. According to Murdia, Bhatt agreed to handle filmmaking responsibilities while he provided funds. A ₹40 crore contract for two films, Bionic and Maharana, was finalised with Bhatt’s wife’s firm, VSB LLP, made a partner.

Murdia claims he transferred ₹2.5 crore via RTGS on May 31, followed by additional payments to vendors recommended by Bhatt’s team. Investigators later found several of these vendors to be fake, with payments routed to individuals unconnected to filmmaking and allegedly diverted into Shwetambari Bhatt’s account.

Bhatt maintains that project delays occurred because Murdia had not paid technicians and says he has emails and contracts to support his defence.

Police say the investigation is ongoing, with more arrests likely as financial trails and vendor links are scrutinised.