Three convicted in fraudulent operation of chitfunds

A court in Odisha's Mayurbhanj district today sentenced three persons to rigorous imprisonment and slapped a hefty fine on them for fraudulent operation of chit funds.

The court also issued a direction to the authorities to realise the amount even if the convicts served jail term after default in payment.

The court of Chief Judicial Magistrate, Baripada, Sanjay Kumar Sahu convicted the chit fund company India Info Star and India Info Line regional manager Diptikanta Behera to five years' rigorous imprisonment. The court also slapped a fine of Rs 1 crore on the regional manager Behera while 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.

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.

According to prosecution, the trio had floated two chit fund companies India Info Star and India Info Line at Betanati in the district in November 2011.

After collecting huge amounts of money from depositors promising them to double their amount in one year, they closed down their offices exactly a year later.

On the basis of an FIR on February 4, 2013 lodged by one Kalakar Mahanta of Phuragosala under Betanati police station, who had been duped Rs 10 lakh by the company, the police had arrested the trio. Though the detailed estimate was yet to be prepared, preliminary investigations had revealed that they had collected over Rs 1.31 crore from depositors.