‘Dreams crushed, savings gone’—How Vigneshwara Developers scammed hundreds, escaped liability

In ‘Progress of the Indian Economy: Legislative Proactivism since 2015, Vivek Sood discusses the importance of economic reforms in the judicial system.

Representational image | A security person stands guard at Tihar jail in New Delhi | ANI File Photo

The Vigneshwara group of companies promoted by the Dahiya family launched a real-estate project in the year 2005 called ‘Darsons & Kissons iValley Business Park’ at Manesar, Haryana. A rosy picture was presented to gullible investors through attractive brochures and advertisements on TV, FM Radio and print media to the effect that a grand IT cyber hub comprising office, retail and residential spaces would be constructed in about ten acres of land.

About 700 gullible homebuyers were induced by the attractive investment schemes that were projected to them by the Dahiya family, the promoters of Vigneshwara group of companies. The promoters were able to collect about Rs. 270 crores from the homebuyers. Amongst the various schemes to cheat investors, the ‘barter’ plan of Vigneshwara has ‘impressed’ and humoured me the most due to its 16 Progress of the Indian Economy cunningness and the gullibility of investors to get trapped into.

Let me explain this ‘barter’ scheme with the help of a simple example. In 2005, Mr Vinod Sharma, an investor, owned a flat in Greater Kailash-I worth Rs. 3 crores. Dahiya approaches him and says his company will buy the flat for Rs. 4 crores and this money received by Sharma will be further invested in buying spaces in ‘Darsons & Kissons iValley Business Park’. Dahiya promised to give Sharma spaces worth Rs. 4 crores and also assured monthly return of 1%, that is, Rs. 4 lakh per month till possession. Sharma couldn’t have got a better deal in his life! He was thus trapped into this fantastic looking deal. Sharma was given Rs. 50 lakh as part payment out of the total consideration of Rs. 4 crores and asked to re-invest this amount into Vigneshwara as part payment for the spaces which Sharma did so. Fifty lakh was again given by Vigneshwara to Sharma as another instalment which was re-invested. In this way, Rs. 50 lakh was rotated eight times from Vigneshwara to Sharma and back. Hence, Sharma received Rs. 4 crores for his Greater Kailash flat and the entire amount was re-invested in ‘iValley’ of doom. Flat gone, all money re-invested and gone to Vigneshwara, assured return of Rs. 4 per month paid to Sharma for some months and then abruptly stopped, and the spaces‘iValley’ never delivered. This was how Sharma was‘beautifully’ cheated. Sharma bartered his valuable Greater Kailash flat for a dream that never became real.

In 2009, Dahiyas sold another dream project called ‘Aquarius’ in Sector 74, Gurgaon, to about 900 investors and collected about Rs.320 crores from them. A ‘dream-come-true’ IT Cyber Park comprising spaces with helipad, and so on was promised by the promoters to the gullible investors. The farmer who sold the land was paid only Rs. 8 crores, a fraction of the total consideration and shooed away. Even the Rs.19 crores payable to the authorities towards EDC wasn’t paid though Rs. 320 crores was collected from the investors.

Not a brick has been laid and the dream project is a barren land even today after 12 years.

The same ‘barter’ plans, and so on were super-hits this time too. False promises from the promoters kept the hopes of the cheated investors alive. Hundreds of crores have vanished from the Vigneshwara companies to shell companies and into personal hands.

The wake-up call came in and around the year 2014 and about 800 criminal complaints were filed by the cheated investors in different police stations including the Economic Offences Wing (EOW), Delhi. Numerous FIRs were registered against the Dahiyas. Many of the complaints were bundled into the FIRs registered with the EOW.

Now let’s come to the point I wish to hammer here. The chargesheets in the EOW cases were filed by the police in the Delhi Court in the year 2016. Today, we are in 2022. And not even the arguments for framing charges have been heard by the Court. In other words, not even the first step in a criminal case has been taken in the case. What to speak of when the criminal trial is likely to end, one doesn’t know when it is likely to start! Criminal trials in such cases cannot be completed even in the next quarter of a century. The number of witnesses is so large in such multi-victims’ scam cases.

Thousands of witnesses will need to step into the witness box during the trial. Plus, there would be thousands of documents to be exhibited as evidence in such cases. The existing infrastructure in the trial courts just cannot handle such cases. With such a large pendency of cases, the legal system is totally clogged. A Chief Metropolitan Magistrate in Delhi has about 500 cases every day before him. When he takes up cases like Vigneshwara, the Magistrate is completely helpless! The sheer volume and weight of such files would be intimidating to any judge. The lower judiciary is not to be faulted, it’s the inadequacy of the infrastructure.

Let’s ponder on the consequences of this predicament in our criminal justice system. The accused believe that they are facing prosecution and persecution. They argue that their right to speedy trial which flows out of the fundamental right to life and liberty (Article 21) is being grossly violated.

They have a point especially if they aren’t released on bail. It would be a travesty of justice to keep the undertrials in jail indefinitely. It’s a strong argument in my view. Now let’s look at the other side of the coin from the perspective of the victims of such cases of mass-scale cheating. Widows and senior citizens have lost their hard-earned money. Many have died due to the distress of being cheated of their life’s savings. Many victims have suffered multiple losses due to cheating by the promoters of Vigneshwara. They took loans to invest in attractive schemes on which they are paying interest and had dreams of a home that never came true and have had to pay heavy rents instead.

These victims believe that such promoters deserve the harshest punishment, which is a fair expectation. After all, justice must be done. Such crimes should never go unpunished. The conundrum is this. If bail is granted to the accused and the criminal trial is indefinitely postponed, it’s as good as an acquittal for the accused. If bail is denied and the trial is a non-starter, then beyond a point it’s a violation of the human right to fair trial. Hence, a case is made out for reforms in this area.

In my view, Special Courts must be set up so that such multi-victims scam cases are tried and reach an end. In other words, Special Courts must be set up for trial of such cases as that of Vigneshwara. Each Special Court should have very few cases so that criminal trials in multi-victims cases can be concluded in maximum two years. Trials in such cases should be on a day-to-day basis. The government in consultation with the High Courts must set up Special Courts for trial of Vigneshwara and many such cases that are gathering dust in courts. While economic justice is dynamic and must keep evolving with time and as newer social challenges arise, I must conclude by saying that today due to the proactivism and sensitivity of the present government, homebuyers have ceased to be beggars protesting on the streets for justice or languishing in consumer courts for years and have instead become legally empowered warriors with RERA and IBC recognizing them as citizens with strong legal rights and remedies.

This excerpt from Vivek Sood’s ‘Progress of the Indian Economy – Legislative Proactivism Since 2015’ has been published with permission from Thomson Reuters.