“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
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
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
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.