Celebrity chef Santosh Shah, who was arrested in a banking offence case, was released on Tuesday after depositing bail equivalent to the amount claimed in the case.

According to Superintendent of Police Pawan Bhattarai, spokesperson for the Kathmandu District Police Range, Shah was released on a recognisance bond after furnishing the required bail.

Restaurant deal, loan and cheque dispute

Shah was arrested in Janakpur on fraud allegations by the Valley Crime Investigation Office and brought to Kathmandu on June 13. Police are also investigating Narayan Sah Sudi, who was arrested along with him. Sudi is a partner at the Mithila Thali restaurant chain, founded and run by Shah.

The dispute involving Shah is linked to Shila Restaurant in Gairidhara, which his group reportedly purchased for Rs 22.5 million from Aarjab Holdings Pvt Ltd. The first agreement between Aarjab Holdings and Mithila Thali was signed on June 6, 2024, and was later revised in a second agreement on September 2, 2024. Sachin Bhandari represented Aarjab Holdings, while Ramhit Sah represented Mithila Thali. Santosh Shah signed as a witness.

Under the agreement, Mithila Thali was required to pay Rs 1.5 million as an advance payment to Aarjab Holdings. It also agreed to clear Rs 3.85 million in rent dues related to the restaurant. An additional Rs 277,977 owed to the Nepal Electricity Authority was also to be settled by Mithila Thali and adjusted against the purchase price.

The agreement further stated that Mithila Thali would take responsibility for a bank loan of Rs 13.58 million owed to Nepal Bank Limited.

Of the remaining purchase amount of Rs 3.29 million, Rs 1.5 million was to be paid between mid-August and mid-September 2024 and Rs 1.79 million between mid-September and mid-October 2024, as per the revised agreement.

However, after the loan at Nepal Bank was not cleared, the Aarjab Holdings side says they have come under severe financial stress. One of the company’s directors said the bank issued a 35-day pre-default notice on March 26, 2025, warning of blacklisting due to irregular repayments.

“Eventually, the bank issued a final seven-day notice for repayment on April 15, 2025. Even then, the loan was not cleared,” she said. “Despite repeated reminders from the bank, Mithila Thali did not pay the loan, and we came under severe mental stress. As the process moved toward auction, we started paying instalments ourselves just to protect our property. That money should have been paid by Mithila Thali as per the agreement.”

After the restaurant was acquired, Shakuntala Adhikari (Thapa) from Aarjab Holdings filed a case at the Kathmandu District Court on June 13, 2025, after cheques issued by the Mithila Thali side bounced.

The complaint claims that cheques worth Rs 800,000 each were issued twice on different dates, along with another cheque worth Rs 900,000, but the amounts could not be withdrawn due to insufficient funds. Another cheque worth Rs 450,000 allegedly lacked the company stamp, which led to a fraud complaint at the Kathmandu District Police Range.

The court had earlier issued an order directing the release of the defendants (Sudi, Dilip Kumar Shah, Ramhit Shah, and Santosh Shah) on bail upon a deposit of Rs 25,000 each. If the amount was not deposited, they were to be kept in custody. The order was issued on December 29, 2025.

Meanwhile, Mithila Thali approached the court seeking a writ of prohibition to halt proceedings in the banking offence case.

On March 9, 2026, a bench led by Judge Khimananda Bhusal issued a verdict in a banking offence case. The court sentenced all four accused, including Santosh, to a fine of 5 percent of the Rs 2.5 million claim amount, amounting to Rs 125,000 each, along with a one-month jail term. They were released on bail after posting a security deposit of Rs 25,000.

The verdict states that, as the case is pending for trial, the one-month jail term imposed on each defendant shall be enforced, and the fine shall be recovered from the bail amount deposited by them.”

Mithila Thali’s lawyer, Dipak Dubey, said he was not aware of the latest arrest.

“I had pleaded the case regarding the previous prohibition writ, which was settled long ago. However, I am not aware of what the current dispute is about,” he told Kantipur. “I can only comment after reviewing the official government charge sheet. I cannot say anything more at this moment.”

SP Bhattarai said the investigation is ongoing under fraud-related charges and that police have obtained additional time from the court.

Shah is one of Nepal’s best-known chefs and is credited with helping introduce Nepali cuisine to a global audience. He rose to international prominence after reaching the final of the BBC television programme “MasterChef: The Professionals” in 2020, where his performances drew widespread attention in Nepal and abroad.