Kolkata High Court wants new court to hear chit fund cases

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KOLKATA: High court is planning to set up a dedicated court to hear all chit fund cases. A division bench of the high court comprising Justice Manjula Chellur and Justice Joymalya Bagchi held that going by the number of public interest litigations (PIL) on chit funds, it will take Securities and Exchange Board of India (Sebi) 100 years to hear all the allegations.

On Friday Justice Joymalya Bagchi made the observation after as many as 14 chits fund-related cases were listed for hearing. Most of the PILs sought the court’s intervention for repayment of the invested sum to depositors which has been long overdue.

State counsel Pranab Dutta urged the court to set up a special court such as the National Green Bench to hear the chit fund cases. At this point, Justice Bagchi said: “If such court is set up then the Central Bureau of Investigation (CBI), Sebi or Enforcement Directorate (ED) investigating the chit fund cases can file reports or chargesheets to this court.”

The high court didn’t hear the cases on Friday. It will take all the 14 cases for hearing, except the cases that are related to MPS Group, on July 31.

A counsel for the duped investors, Srijiv Chakraborty, alleged in the court that chit fund companies have amassed the hard-earned money of the poor. Chakraborty pointed out that a company has mobilized more than Rs 500 crores from the public and that it has not made any provision for repayment as of now.

The high court also observed that these companies were set up after getting the permission of the Sebi.

Sebi counsel Raj Shekhar cited that the financial regulator’s approval was not the only criterion for starting such business and there were several other departments that were also responsible for the mushrooming of such chit fund companies across the state.