Gauhati HC directs Mizoram to re-examine financial fraud

Gauhati High Court has directed the Mizoram government to file a revision or an appeal in the Chiahpuam case, the biggest financial fraud in the history of Mizoram.

GHC's Aizawl bench judge Justice Ujjal Bhuyan in an order on September 5, directed the Mizoram government to appoint special public prosecutor (if not already appointed) to re-examine why all the accused in the cheating scam had been acquitted, keeping in mind the Mizoram Protection of Interests of Depositors (in Financial Establishment) Act 2001, section 6 of the Act in particular. Status report be made within two months, the court demanded.

The court also asked the deputy commissioner of Aizawl to inform the court as to what steps he had taken in terms of sections 4 and 7 of the Act, after receipt of Rs 12,13,36,103 in cash from the swindled money. It mentioned that the director general of police (DIG) of Mizoram had informed the court that the money was received on June 6, 2014. The Aizawl DC has been directed to inform the court by the next date of hearing on October 22.

The court also held that it is not necessary to further pursue any inquiry against respondents number four and five (read chairman and secretary of Chiahpuam Depositors Association, Aizawl respectively) as their intention was not for dismissal of the case but for return of the money to the cheated depositors.

The chairman and secretary of Chiahpuam Depositors Association had filed a petition for dismissal of the case.

In November 2013, the Aizawl bench of Gauhati High Court accepted the direct petition of Helena Lalsawmkimi, a lone activist fighting for the rights of the duped depositors, seeking the court's intervention in the Chiahpuam case which had gone awry over the five years it was handled in the district courts.

The Helena petition came after the chief judicial magistrate's court in Aizawl 'discharged' the kingpins of the financial fraud, including C Lalmuanpuii, who collected allegedly fabulous sums of money from gullible Mizo people.

The CJM court released all the collectors finding no fault with them and ruled that they were not at fault if people on their own deposit money with them with an eye on the high interests, which came to as high as 50 per cent in some collectors.

Years before the Saradha scam of West Bengal hit national headlines, thousands of people in Mizoram were cheated through Chiahpuam ponzi scheme, known in local parlance as Kar Khat Bank (or One Week Bank) as the depositors were returned with huge interests on a weekly basis.

The promoters of the fake financial institution advertised as being linked to Forex exchange system and also being financed from overseas by rich benefactors who wanted to help the poor Mizos. Their claims were so convincing that thousands of people, including government cashiers, church organisations and even bank employees, invested their money.

The gravy train kept rolling until it suddenly crashed on October 29, 2008 when some of the collectors could not pay back the depositors' money and ran away, promoting some depositors to file FIRs.

Challenging the CJM judgment, the activist said in her petition that the Mizoram government failed to implement the Mizoram Protection of Interests of Depositors (in Financial Establishment) Act 2002 which the Supreme Court has validated as the only law under which depositors of scheme run by unscrupulous persons can get justice.

The Helena petition is one of those rare cases in which an aggrieved citizen has directly approached the High Court in desperation and one which was accepted by the court and registered suo moto as as a writ petition.