On return from Central deputation, I was posted as Director of Economic Offences (DEO) in the cadre. Since I had headed a central organization for almost four years, I felt the posting was a little lacklustre as the remit was to investigate offences under one single non-IPC Act, viz., Protection of Interest of Depositors in Financial Establishments (PIDFE) Act. However, mine was not to question why and I deep-dived into my new assignment in all earnestness.
The
Act had come into being in the wake of a series of financial scandals in West
Bengal, the most spectacular one being the Sarada scam. These scams were
erroneously called chit fund scams. They were actually multi-level marketing
schemes where essentially money from new depositors are used to pay huge returns
to old depositors. Seeing the returns, more and more new depositors come in and
the treadmill goes on until one day, the balloon bursts because no goods or
services are getting produced and a few guys at the top of the pyramid vanish with all the money. Many people lose their entire life savings in
the bargain. The Sarada scam alone was estimated to have involved Rs. 20,000
cr. of such deposits. Out of desperation and misery, more than 200 people had
committed suicide in the aftermath of that one scam.
Even
though many cases were registered with DEO, only one case had seen some action in terms
of arrests and seizures. One of the big cases which had not seen any action involved the Pincon group of industries. My colleagues advised me not to touch
it with a barge pole because very big people were involved. The scam amounted
to around Rs. 1,100 crores of deposits they had mopped up and not fulfilled
their obligations. During the Durga Puja, I found saturation Pincon hoardings
all over Kolkata at most Puja pandals. It was an affront.
Since
I was back in the cadre after a long time, I thought I’d feel my way. What I
did was non-invasive forensics. Lots of details are available in the public
domain, balance sheets, assets, shareholding, list of directors, SEBI rulings,
etc.. We compiled all the details of the scam and the assets and function of
all the companies in the group. Pincon group boasted some of the leading IMFL
brands and the market leader of country liquor, Bangla no. 1. All the details
were in hand. When we swung into action, in one single night, we managed to
arrest most of the accused and seize the relevant documents.
Most
of the documents were seized from one particular building close to my office.
After seizing the documents, the office was sealed. The Chairman and the main accused, Monoranjan
Roy, audaciously tried a burglary into the premises through a back entrance. He
was unsuccessful but even if he had succeeded, it was too late for him.
Several
assets spread all over the state were seized/ sealed. All the bank accounts
were frozen. One of these assets was a school. The Principal and teachers of
the school met me and explained that the students would be adversely affected
because it was happening in a mid term. Since students were involved and since
the school was not directly involved in the mainstream operations of the
company, I was sympathetic and decided not to freeze the school account. The
next thing I knew, Monoranjan Roy wiped out the entire account at lightning
speed.
When Monoranjan
Roy was arrested and brought on Police remand, he walked into my office chamber
as though he owned the place. I asked him why he was speaking so loudly and he
replied that he speaks that way only. It took some doing to bring him down a
peg or two. The next day he obtained a court order mandating his lawyer’s
presence during interrogation. However, I pointed out that I was not interrogating
him but was merely asking after his welfare at that point. Bit by painful bit, sheet by voluminous
balance sheet, the entire layering of the accounts spread over six companies, 39 verticals and branches all over India was
uncovered. I mentally thanked all the teachers at IIMB and Harvard who had
taught me all those courses in Finance and Accounts so that I could navigate
through all the documents. What I found was that Monoranjan Roy was nothing
short of a financial genius. Unfortunately, he applied that brain for wrong
things.
After
the Police remand was over, he was sent back to judicial custody. A few days
later, I learnt that he had manged to get himself admitted into a hospital on
health grounds and was happily operating his business empire from there. When
my officers went there, they found him surrounded by his cronies and staff and it
was business as usual for him. Seeing my officers, they all ran away. I took up
the matter with then DG, Prisons and Monoranjan was shifted to another jail. A
few days later, I learnt that he was still operating from the jail with the
help of a cell phone. The cell phone was seized and another case was lodged in
this regard. That case, being open-and-shut, was chargesheeted in quick time.
A
total of 20 persons were arrested. The only requirement I set for myself and my
colleagues was not to arrest anyone without enough evidence which would stand
up in a court of law. The arrested persons included chartered accountants –
what I found was these scams can never happen without the active connivance of
chartered accountants and auditors who sign on the dotted lines, no questions
asked. Even though they were not getting bail quickly, they were confident that
at the end of 90 days, pending investigation, they would all get the bail.
Close
to the 90-day limit, I ceased all overt activities such as raids, sealing, etc.
and the accused persons thought that the investigation was going slow. However,
with the help of a chartered accountant and an official of RBI, we built up a
watertight case based primarily on documents. I went through a lot of
chargesheets by sister agencies. These chargesheets were too long, some of them
exceeding 1000 pages. They covered a lot of ground and were good for optics and
media reports but were counter-productive because they tended to test judicial
patience and clouded rather than clarified the main crime. In my opinion, a
chargesheet is supposed to assist in proving the charges, that’s all; it’s not
supposed to be an encyclopaedia. Or a display of the investigator’s erudition. I
set myself and my officers an upper limit of 30 pages for the chargesheets in
all cases. We also shunned all peripherals which would have been lapped up by
the press – the involvement of very big names, certain actresses, etc., etc.. After
giving final instructions, I left for Mumbai for my health issues.
The
draft chargesheet that I received at Bombay on the 88th day was
extremely defective and sub-standard. That day I had undergone a complicated
biopsy and was bleeding heavily. However, the 90-day deadline was also a matter
of life and death so I sat up all night with my laptop to work on the
chargesheet. When I reported to my doctor for some complications of the biopsy,
he was furious at my having exerted so much the previous night. Anyway, we
managed to submit the chargesheet on the 89th day. It exceeded that
30-page limit but not by much, barring the annexures. My officers told me later
that the submission of the chargesheet in quick-time left the accused and their lawyers
stunned. The magistrate committed them to trial and rejected their bail
application through a detailed order.
The
real game started thereafter.
Almost
every day, there were notices from either Calcutta High Court or the Supreme
Court. These guys are extremely rich and connected and hire the best and most
reputed lawyers. Meanwhile, junior lawyers represent the government. Engaging
more senior lawyers takes time because a lot of processing is required and a
lot of officials need to be convinced. Our government processing couldn’t keep
up with the speed at which Monoranjan Roy was filing his petitions. However,
the detailed trial court order rejecting the bail was a very strong weapon we
had. Plus, in the teeth of virulent opposition from my officers and the government
lawyers, I insisted on filing a counter-affidavit for each single petition by
each of the accused persons. I was regularly attending the trial courts for the
cases which were being heard in Kolkata and that experience improved the
quality and comprehensiveness of the counter-affidavits. Once a
counter-affidavit was filed, neither the investigating officer nor the
government lawyer had any discretion and that could have been the reason they
were opposing it so vehemently. One by one, each of the scores of petitions by
the accused persons for bail was rejected by the various courts.
A few months later, the court pronounced its judgement. In a first of its kind in Ponzi scams (including cases investigated by the CBI, other states, etc.), eight of the accused persons were awarded life imprisonment. I considered that as the finest hour in my entire Policing career. Bigger than the Purulia arms drop case detection.