2 directors of chit fund firm held guilty, fined

  • Shailee Dogra, Hindustan Times, Chandigarh
  • Updated: Dec 21, 2014 12:16 IST

A local court has convicted two directors of a Sector-32 based company for running a chit and money circulation scheme and imposed a fine of Rs 31,500 each on them, after they were booked of cheating and forgery about 10 years ago.

The court, however, spared them of imprisonment saying “it is appropriate case to show leniency”.

Chief judicial magistrate Anubhav Sharma on Wednesday held guilty Rajnish Sharma (54) and Ramesh Chand (67), both directors of Skynet Prospac Network Private Limited, Sector 32, Chandigarh. The police had filed 20 challans against them.

“The court found two directors guilty under the Prize Chit and Money Circulation Scheme (Banning) Act and imposed a fine of Rs 31,500 each. However, they were acquitted of charges of cheating and forgery,” said Rabindra Pandit, defence counsel.

“The accused were not engaged in trading or manufacturing, but were only benefiting from managing the scheme. There is no denial that the scheme aimed to enrich its members without any other act than adding more members. It certainly falls in the definition of ‘money circulation scheme’ as defined under section (2) (c) of the Chit Fund Act,” the court held.

“Considering the fact that the case pertains to 2004 and the accused are facing trial since then, they have undergone one-month custody at the time of investigation. Further, considering that as such no offence of cheating has been proved by the prosecution and only the offence under the Prize Chit and Money Circulation Scheme (Banning) Act, 1978 has been proved, it is appropriate case to show leniency and sentencing the accused with imprisonment will not be justifiable,” it further said.

The UT police booked Rajnish and Ramesh on August 18, 2004 for cheating and under various sections of Prize Chits and Money Circulation Schemes (Banning) Act. The case was registered on complaint of about 63 persons who had invested money in the scheme. The company was accused of violating the Prize, Chit and Money Circulation Banning Act.

As per the complaint, the firm was enrolling members for marketing products or services of some foreign concerns and companies.

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