Paperwala has been charged under sections 7, 13(2) read with section 13(1)(d) of the Prevention of Corruption Act, 1988 and under sections 420 (cheating) of the Indian Penal Code. The case will come up for trial shortly before Special Judge S P Kukday.

Special Public Prosecutor Vishwas Patil told the court that between November 1985 and June 1986, Paperwala, along with the complainant in the case, Popat Baburao Pisal, a cashier with the Defence Services Department, accepted illegal gratification for getting people flats from the Chief Minister's 10 per cent quota. In all, the duo duped six persons who had paid amounts rangingfrom Rs 15,000 to Rs 20,000. None of the victims were given receipts. Paperwala, who was earlier posted with the Housing Department, had allegedly misused his position there as well and promised to allot flats to the six persons at Anand Nagar, Vakola within six months, added Patil.

Apart from the victims, Pisal too paid Paperwala Rs 5,000. In November 1985, the victims, suspecting paperwala's motives, took back Rs 5,000. That is, all except for Pisal. Investigations later revealed Pisal's role in inducing the six victims to pay up. After repeated pressure from the victims, in July 1987, Paperwala gave an undertaking on a Rs 5 stamp paper that he would return the amount he had taken from his victims, but he failed to do so. The victims then complained to tpolice who transferred the case to the ACB.

The ACB registered a complaint against both Paperwala and Pisal, but Pisal has been discharged from the case by the Bombay High Court.