The court has also directed the government to submit its plan or steps it has taken taken to repay the thousands of families who lost their deposits in the scheme that has come to be known as chiahpuam, literally meaning “soak to swell”.
The HC’s order comes almost a year after the court registered a writ petition based on a depositors’ union’s letter to the Chief Justice complaining the state “failed to implement” a law that would protect depositors’ interests.
In the roughly two years the ponzi scheme was operational, collectors took crores of Rupees from depositors – including government officials, businessmen, professionals, faith-based organisations and pensioners– and circulated it among them, paying huge amounts of interests to some depositors by using the money invested by other depositors before the scheme eventually went bust.
Police eventually seized 46 land titles, 42 vehicles, 59 bank passbooks, valuables worth Rs 10 lakhs and about Rs 7 crores in cash which were connected with the scam. A total of 45 people were arrested and charged under the Indian Penal Code.
Affidavits filed in the HC by the Chief Secretary and the Director General of Police put the total amount of money involved in the scam at a little over Rs 433.80 crores although the police was able to recover only Rs 12.13 crores after auctioning off the seized materials on the orders of a lower court.
The amount has since been transferred to the Deputy Commissioner on the directions of the lower court, which last October also acquitted all 45 accused.
The depositors’ union then wrote to the CJ, and the HC eventually took up the case and asked the government what steps it was taking to pay back the recovered amount to the depositors and why it had not challenged the acquittal of the 45 accused.
Another depositors’ body meanwhile curiously asked the HC to dismiss the petition saying they were happy with the lower court’s decision. The HC has since turned down the submission.
The state government replied to the HC saying the cases registered against the 45 accused were criminal cases and therefore the provisions of a law to protect the interests of depositors – called the Mizoram Protection of Interests of Depositors (in Financial establishments) Act 2002 – did not apply.
The government’s reply also included a submission by the public prosecutor, who gave several reasons for not challenging the acquittals, including that the depositors “all [took] the risks to get good returns” and that “if someone is to blame for this, they are all to blame.”
The HC slammed the government’s reply as “wholly inadequate”, and the government has since told the HC the money has been handed over to the Deputy Commissioner.
The HC has subsequently asked the government to file revisions in or appeal against all the cases the 45 accused were acquitted, and asked the Aizawl Deputy Commissioner to inform the court by October 22 what steps have been taken to enforce the law protecting depositors relevant to the case.
Source: Indian Express
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