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CBI to investigate chit fund scam: Will it offer Navin a bitter fourth term?



Posted on Sunday May 11, 2014

Last updated Wednesday July 06, 2016

  Chit fund scam, Odisha, West Bengal  
The fresh SC judgment ordering CBI probe into the chit fund scam is seen by many as the beginning of a troubling time for Odisha's Chief Minister Navin Patnaik before he assumes to power for a fourth term, which looks more likely till now.  
Basudev Mahapatra  

It’s not good news for Mamata Banerjee and Navin Patnaik whose governments had been fighting to stop the Central Bureau of Investigation (CBI) from taking over the investigation of multi-crore chit fund scam in Odisha, West Bengal and other states. The Supreme Court bench comprising justice T S Thakur and C Nagappan, on May 9, 2014, ordered the central agency to investigate the inter-state chit fund scam, amounting over 10000 crores.

SC ordered investigation into cases registered against 44 companies, including big players like Saradha Group, Seashore, Artha Tatwa, Rose Valley and Sai Prasad, involved in collection of money by alluring people through impracticable schemes.


“The involvement of these companies in the scam had inter-state ramifications besides the fact that their collections had exceeded over 500 crores each,” the judgment said.

The booming chit fund business operated in Odisha and other states like West Bengal and Assam looked to be a big scam after complaints of duping depositors were lodged against some companies, in 2012.

The state governments of Odisha and West Bengal ordered investigation by concerned wings of the state police and declared compensatory fund for partial relief of the depositors. But the declared amount was too less in compare to the amount collected by the companies. Odisha announced rupees 300 crore whereas West Bengal government announced rupees 500 crore as compensatory fund.

The investigating agencies of state police have arrested some key persons of different organisations operating as cooperatives and companies.

In Odisha, the state government has permitted the Economic Offence Wing (EOW) of Crime Branch of the state police to attach the properties and valuables of a few chit fund operators for recovery of depositors’ money. Cash worth Rs 86 lakh, Rs 127 crore by freezing bank accounts, 203 kg silver, 1,583 kg gold and 22 four wheelers and 1826 acres of land have been seized by the state investigating agency.

In a petition filed with the apex court by a conscious citizen Alok Jena, it was alleged that the state agency was insufficient to do the investigation and facilitate conviction of people involved in the malicious operation as the business ran in patronage of many either in power or close to it.

Pronouncing the verdict in favour of the petitioner, the SC bench observed that “Investigation by the State Police in a scam that involves thousands of crores collected from the public allegedly because of the patronage of people occupying high positions in the system will hardly carry conviction especially when even the regulators who were expected to prevent or check such a scam appear to have turned a blind eye to what was going on.”

“We need to point out that money trail has not yet been traced,” The judgment said.

Responding to the apprehensions about the independence of CBI in carrying out the investigation, the bench of the apex court remarked, “It is true that a lot can be said about the independence of CBI as a premier Investigating Agency but so long as there is nothing substantial affecting its credibility it remains a premier Investigating Agency. Those not satisfied with the performance of the State Police more often than not demand investigation by the CBI for it inspires their confidence.”

Rejecting the argument of the states not to hand over the investigation to CBI, the SC bench in its judgment said, “We cannot, therefore, decline transfer of the cases only because of certain stray observations or misplaced apprehensions expressed by those connected with the scam or those likely to be affected by the investigation.”

In strict terms, the judgment mentions that “Needless to say that the State Police Agencies currently investigating the cases shall provide the fullest cooperation to the CBI including assistance in terms of men and material to enable the latter to conduct and complete the investigation expeditiously.”

Regarding the Justice R K Patra Commission set by Odisha government to inquire into the scam, the apex court said, “this order shall not, however, affect the proceedings pending before the Commissions of Enquiry established by the State Government or stall any action that is legally permissible for recovery of the amount for payment to the depositors.”

As came in news reports came in different times, many leaders of the ruling party Biju Janata Dal have suspected links with the chit fund operators. The reports also said that leaders were largely appeased, probably, for favouring the chit fund operators someway. But leaders of BJD are in denial to any such allegations.

Everybody, however, expects that investigation by the central agency will uncover the faces directly and indirectly indulged in the Pon'zi game.

In view of this, the fresh SC judgment ordering CBI probe into the chit fund scam is seen by many as the beginning of a troubling time for Navin Patnaik before he assumes to power for a fourth term, which looks more likely till now.

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