Significant Judgments


The facts of the case were that as per an investigation, various properties were purchased by the Company through their directors at different places with the money collected by them from the depositors in the course of running illegal money circulating scheme. It further appeared from the record that in terms of Section 3 of the Odisha Protection of Interests of Depositors Act 2011 (OPID Act), the State Government passed an order of provisional attachment of the movable and immovable properties of the appellants and thereafter the designated Court passed the impugned judgment directing the competent authority to sell the attached properties by public auction and realize the sale proceed for the purpose of equitable distribution of the same amongst the depositors. The appeals were filed challenging the aforesaid order.

The issue was whether they can question the legality and propriety of the impugned judgment on the grounds, inter-alia, that the proceeding was initiated on the complaint / F.I.R. of a lone individual said to be a depositor, since the OPID Act contemplates a class action when several persons were affected by the alleged criminality calling for remedial or penal action under the OPID Act?

The Court noted that under Section 3 of the OPID Act, on default being made by the Financial Establishments, when a complaint is received from several depositors, the State Government on being satisfied that the Financial Establishment is not likely to return the deposits for the protection of the interest of the depositors may order for ad-interim attachment of the money and other property alleged to have been procured either in the name of the Financial Establishment or in the name of other persons from and out of the amount collected by the Financial Establishment. Further, if the Government is convinced that such property is not available for attachment or not sufficient for repayment of the deposits, control over such other property of the said Financial Establishment or the Promoter, Director, Partner or Manager or Member of the said Financial Establishment or a person who has borrowed money from the Financial Establishment, may be transferred to the Competent Authority appointed under Section 4 of the OPID Act. Thereafter, it becomes competent on the part of the competent authority under Section 4 of the OPID Act to apply to the Designated Court for making ad-interim order of attachment absolute and for a direction to sell the property so attached by public auction and realize the sale proceeds. As a result, both the Criminal Appeals were dismissed.

The facts of the case were that the Ponzi Companies, many in number, flourished in the Eastern States of India, basically in Odisha, West Bengal, Assam, Tripura, and Bihar, which instigated the public through different schemes, to deposit/invest money, with false assurance of impressive returns. Being allured by such lucrative assurance, lakhs of gullible depositors parted with their hard-earned money with those Ponzi firms, who though at the initial stage paid some returns, later on after collecting huge amounts of money from the public, disappeared from the scene to the dismay and detriment of the depositors. However, in compliance with the order dated 9th May, 2014 passed by the Supreme Court of India in two writ petitions, such as W.P. (Civil) No.401 of 2013 and W.P.(Civil) No.413 of 2013, a total of forty-four such cases were taken over / registered by the then C.B.I. / S.C. / C.I.T./KOL (now renamed as C.B.I./EO-IV-Kol.) and this case was one amongst those forty-four cases.

It was alleged that under the agreements aforesaid, no share of DPMPL was parted with, and an amount of Rs.1,04,50,000/- that was wrongfully received by the petitioner from Saradha Group belonged to the general public who, ultimately, suffered thereby.

Referring to the provisions, the counsel for the C.B.I. laid much emphasis on the fact that since the petitioner has been indicted in an economic offense and sufficient materials are there showing his indictment in the aforesaid serious offense and need of the custodial interrogation of the petitioner to unearth the involvement of any other persons and the larger angle of conspiracy in commission of the offense alleged to have been committed by the Ponzi firm, to oppose the prayer of pre-arrest bail. In support of his contention, he placed reliance on P. Chidambaram v Enforcement Directorate (2019) 9 SCC 66.
So, the allegation being serious and the offense committed being the economic offense and the petitioner being investigated, custodial interrogation was much more fruitful as held by the Supreme Court in the case of P. Chidambaram vrs. Directorate of Enforcement, (2019) 9 SCC 165, the High Court was of the view that the petitioner had made out no case for his release on pre-arrest bail, more particularly when the allegations brought against the petitioner can be said to be frivolous or groundless.