New Delhi: Piqued over the failure of enforcement agencies to trace the money trail in an alleged multi-crore scam by a Lucknow-based real estate company, the Allahabad High Court has ordered three top officials of the Enforcement Directorate (ED), Serious Fraud Investigation Office (SFIO) and Uttar Pradesh Police’s Economic Offences Wing (EOW) to appear before it.
The directors of ED and SFIO, along with the Director General of UP Police’s EOW, have been summoned to appear in person before a High Court bench on 4 November, according to an order, accessed by ThePrint.
“Apparently, no serious efforts have been made either by the SFIO or ED even in trailing of money, which was deposited in various bank accounts of the Sun Shine City Group of Companies despite the fact that accounts have been seized,” a bench of Chief Justice Rajesh Bindal and Justice JJ Munir noted in its order of 17 October.
The HC is hearing a batch of petitions filed by investors in the Sun Shine City Group of Companies, who are seeking a fair police enquiry into the alleged scam. The firm had allegedly duped its investors of more than Rs 350 crore.
A cross-case filed by the company complaining against the state’s Economic Offences Wing is also part of this batch pending before the HC. These cases are pending with the Allahabad HC for more than a year now.
Ahead of issuing its order summoning the top cops, the court perused the status report produced before it. According to the order, it showed that “nothing has been done” in regard to the information provided to the agencies on the alleged frauds committed by the company and its directors, not just in Uttar Pradesh but also other states.
The report, HC order noted, showed that the details given to the agencies were not part of their investigation nor was any action taken on the documents furnished by the petitioners during the earlier hearings.
The 17 October order is not the first time the High Court has adversely commented on the role of investigating agencies probing the alleged scam in which 450 FIRs have been registered against the company, its promoters and directors.
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How the trial has unfolded
The investigation in the case began between 2019-2020 when 284 FIRs were lodged in multiple cities at the behest of 1647 investors who accused the company of siphoning money. The investors approached the HC in 2021 as there was a delay in the completion of the investigation, despite the serious allegations. In January 2021, the court took note of the police inaction and summoned the senior Uttar Pradesh police officers.
Advocate Sunil Kumar, who is the counsel for some of the petitioners, told ThePrint that while 18 investors approached the HC initially, the number of petitioners rose to about 300 over a period of time. According to Kumar, the case was initially handed over to the crime branch of the state police, then to the EOW.
Kumar said although 56 arrests were made by the state police, most of the people were granted bail by trial courts. These arrests were mostly made only after the HC started monitoring the progress of the case. Kumar said the trial courts released the accused on bail on the ground they were not the main conspirators and did not play a pivotal role in the larger conspiracy.
Moreover, the trial court also observed that the alleged kingpin, who is the chief managing director of the company, is still absconding and is in Dubai. This fact was noted by the HC as well during one of the hearings last year, on 23 March 2021. In the same order, the court had commented on the “total failure” of police administration to make “proper investigation” and “arrest the accused.”
Later, in June 2021, the court had expressed its displeasure over the progress of the investigation, noting that the probe had not been taken to a “logical conclusion”. Similarly, in October 2021, the court sought to know why the police had still not got custody of the alleged kingpin living in Dubai.
Though his close associate – Asif Naseem – was arrested and is currently in jail, the agencies are still struggling to identify the money trail.
The court orders – accessed by ThePrint – also showed that Naseem, while being in custody, had been given authorisation to register sale deeds on behalf of the company. Although Naseem’s counsel, senior advocate SFA Naqvi, said that his client had permission of the jail superintendent to do so, the latter has denied it in an affidavit filed before the court.
Speaking to ThePrint, advocate Naqvi said: “There are so many FIRs against my client and in that process 125 bank accounts have been attached. We have submitted before the court that we are ready to settle the matter, as we have sufficient money in our account. The court is yet to pass orders on our plea.”
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