A group of depositors approached the Supreme Court seeking a CBI probe into an alleged Rs 1,000 crore deposit scam. The bench led by Chief Justice Surya Kant issued notice, questioning the effectiveness of the Tamil Nadu Police investigation.
NEW DELHI: A plea has been submitted to the Supreme Court requesting a Central Bureau of Investigation (CBI) inquiry into an alleged Rs 1,000 crore deposit scam.
The application was made by a group of depositors who claim that the ongoing investigation by the Tamil Nadu Police has not effectively safeguarded their right to a thorough investigation.
A Bench headed by Chief Justice of India Surya Kant and Justice Joymalya Bagchi issued a notice regarding the petition and asked the Union government for a response.
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The Court will consider if such multi-State schemes require investigation by the CBI or if the State police are authorized to handle these cases.
The petitioners, representing depositors who consider themselves victims of a large-scale financial fraud allegedly perpetrated by Universal Trading Solution Private Limited, a Coimbatore-based firm, along with its Managing Director G. Ramesh, indicate that the company solicited deposits not only from Tamil Nadu but also from several other southern States.
According to the plea, the scheme was heavily promoted in 2018, promising investors 12 percent annual interest, a monthly return of 10 percent of the principal, and full repayment within a year. Many depositors reportedly invested their life savings, trusting the scheme to be secure and profitable. By early 2019, the company allegedly failed to make repayments.
The petition suggests that it became apparent the scheme was fraudulent, with public funds reportedly misappropriated to acquire real estate in the names of the company, its Managing Director, and his relatives.
In response to complaints, the Economic Offences Wing (EOW) of the Tamil Nadu Police filed the first FIR in June 2019 for offences related to cheating and criminal breach of trust, as well as violations of the Tamil Nadu Protection of Interests of Depositors Act and the Banning of Unregulated Deposit Schemes Act, 2019 (BUDS Act). Subsequently, multiple FIRs were lodged regarding the same scheme.
Despite these registrations, the petitioners argue that the investigation remains inconclusive.
The plea states that vital provisions of the BUDS Act have not been adhered to and that there has been no significant progress in identifying all depositors or recovering assets for repayment. Approximately 73,000 depositors are believed to have been affected, with the total amount involved nearing Rs 1,000 crore.
In 2019, the Madras High Court formed a committee led by former judge Justice K.N. Basha to oversee repayments to depositors, but this committee was eventually disbanded.
In 2022, a new committee was established by the High Court, headed by former judge Justice M. Sathyanarayanan, but it was later dissolved after the High Court ruled that disbursing funds before significant recovery would be premature.
The case has since progressed to the Supreme Court. In May 2023, during a hearing related to a challenge posed by the Managing Director of the company, the Supreme Court appointed a one-member committee led by retired Madras High Court judge Justice M. Govindraj to supervise the sale of properties connected to the alleged fraud.
Depositors have since claimed that this committee has also failed to produce results.
According to the plea, more than two and a half years have elapsed since the committee was formed, yet no properties have been auctioned, no comprehensive list of depositors has been prepared, and no funds have been distributed.
The petitioners assert that the investigation is fundamentally flawed since the deposits were gathered from multiple States, implying that State police lack jurisdiction to proceed.
Moreover, the interstate nature of the scheme has led to a situation where the Kerala High Court has already ordered a CBI probe into related offences arising from the same scheme in Kerala, with the State of Kerala granting consent under the Delhi Special Police Establishment Act.
In contrast, the investigation in Tamil Nadu continues under State police, resulting in fragmented and inconsistent proceedings, as claimed.
Given this context, the petitioners are seeking three main reliefs:
- They have requested the Supreme Court to transfer all FIRs associated with the scheme to the CBI.
- They seek judicial directions for the court-appointed committee to promptly identify depositors, auction attached properties, and distribute the proceeds within a designated timeframe.
- They have asked for one of the petitioners to be named as a representative of the depositors to enhance communication with the committee.
With the issuance of the Supreme Court’s notice, the matter is set to be heard again after the Central government submits its reply.
The petitioners are represented by advocates Mukund P. Unny and Sanjay Nair S.
Case Title: Sureshkumar & Ors. vs. Union of India & Ors.
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