According to police officials, the accused identified as Dinesh Patel, also known as Dinesh Bambhania, had not paid over Rs one crore to two mill owners.
"One Khoda Patel, a trader of cotton bales from Dhasa town of Bhavnagar district, filed a police complaint, alleging that Dinesh Bambhania alias Dinesh Patel cheated him by not paying about Rs 57 lakh for cotton bales which he had sold to him in 2012," Sub Inspector C G Joshi of Virpur police station told PTI.
Dinesh then paid some amount and owed about Rs 57 lakh but when the applicant demanded the amount, the accused allegedly said he would not return it as he did not have any money and misbehaved with Patel, he added.
An inquiry is being conducted into the allegations and police is likely to question Dinesh in this case.
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"Dinesh had bought cotton worth Rs three crore from us in 2012-13 and had given two cheques worth Rs 1.10 crore, which bounced due to lack of sufficient money in his bank account," reads the complaint filed by Talaviya at Damnagar police station.
Dinesh made partial payment to Talaviya but owed him Rs 52 lakh, police said.
One high-ranking official said the police have begun an inquiry into the case.