KOCHI: The High Court on Wednesday directed the district collectors, appointed as competent authority under Section 4 of the Kerala Protection of Interests of Depositors in Financial Establishments (KPID) Act, to issue orders directing closure of all branches of Popular Finance Ltd and its allied institutions across the state. It also directed to effect attachment of the cash, gold and all assets in branches and other offices.
Justice V G Arun issued the order on a batch of petitions seeking a CBI probe into the case. The petitioners submitted that a probe by a Central agency like CBI is essential as the directors of Popular Finance, the Konni-Vakayar-based non-banking finance firm, allegedly swindled depositors to the tune of around `2,000 crore and the amount has been taken outside India. They alleged that non-registration of separate FIR on separate complaints is illegal.
The court directed to keep in abeyance the zonal circular issued by the state police chief asking to register only one FIR in the scam. The court held that the station house officers should register separate cases and FIRs on receipt of complaints against Popular Finance and its allied Institutions within the jurisdictional limits of their police stations.
Senior public prosecutor Suman Chakravarthy submitted that Government of Kerala has sent a letter to the Central government requesting it to hand over the case to CBI considering the magnitude of the scam, on September 11. The court said that if the Central government decides to entrust the investigation with the CBI, its Director shall constitute a special investigation team consisting of officers having experience and expertise in investigating offences involving economic fraud. In such an event the state government shall provide the SIT with the requisite logistical support.
The prosecutor informed that Popular Finance Ltd has 235 branches spread over Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra and Delhi with an investor base of more than 20,000 depositors and deposits amounting to Rs 1,600 crore. The state police had issued the zonal circular taking into account the practical difficulties that would arise on registration of innumerable crimes in police stations across the state. The mastermind behind the fraud swindled the deposited amounts through the head office in Konni.
Hence, a case was registered at the Konni police station as lead case. However, the court directed to register separate FIRs once such complaints filed at the respective police stations.Regarding the action taken under KPID Act, the prosecutor informed that the government has already designated various district collectors as competent authorities to initiate action to protect the interest of the depositors.The petitioners submitted that they had deposited their life’s savings, lured by the offer of attractive interest rates much higher than the prevailing bank rates.
What prompted the order
Justice V G Arun issued the order on a batch of petitions seeking a CBI investigation into the scam
State police chief’s circular asking to register only one FIR in the scam to be kept in abeyance