By Bizodisha Bureau, Baripada, April 20, 2015 :

In a significant judgment, the chief judicial magistrate in north Odishan town of Baripada on Monday convicted three promoters of two chit fund companies ranging from four to five years and slapped a hefty fine for fraudulent operation of chit funds.

The CJM, Sanjay Kumar Sahu convicted the chit fund company India Info Star and India Info Line regional manager Diptikanta Behera to five years’ rigorous imprisonment [RI] and slapped a fine of Rs one crore for cheating the depositors.

The court had convicted the trio under various sections of IPC and section 4 and 5 of Prizechit (Money Circulation Scheme) Banning Act of Odisha government.

The court also imposed a fine to its branch manager and manager, Gagan Patra and Subhendu Sekhr Panda respectively were imprisoned for four year RI and fined Rs 20 lakh each.

In default of payment, Behera would undergo 18 months jail term while in case of Patra and Panda the period is six months each.

However, in a special verdict under section 421(1) of CrPC, the court directed that even if the convicts served the jail term after default in payment, the fine amount has to be realised from them.

Based on a First Information Report [FIR] filed on February 4, 2013, by one of the depositors Kalakar Mohanta at Betanati Police station, the Economic Offence Wing of Odisha police investigated the case and arrested the promoters.

The promoters had floated two chit fund companies India Info Star and India Info Line at Betanati in the district in November 2011.

Both the chit fund companies are understood to have mopped up more than Rs 1.31 crore from some 65 depositors assuring them 100 per return per annum. The chit fund company for some time paid interest to depositors to instill confidence among the people.

According to prosecution, the trio after collecting huge funds from depositors closed down their offices exactly a year later.