Economic Offences Corrode Fabric Of Democracy, Against National Economy And National Interest

Key Takeaways

• The Supreme Court on Tuesday passed a judgement stating that economic offences wear down the fabric of democracy and it is against the national economy and interest of the country.
• Justice Anu Malhotra denied the bail to the ex- Fortis promoter Malvinder Mohan Singh who was arrested and accused of crypto currency chit fund scam on assurance of high return.
• Malvinder Mohan Singh was accused of inducing people to invest in cryptocurrency and also promising a high return of almost up to 20-30% per month.

Background

• Malvinder Mohan Singh and his brothers along with former Godwani and two others were arrested in October for causing a loss of Rs 2,397 crore in the Religare Enterprise Ltd (REL).
• The complaint was lodged in 2018 by REL when the brothers were promoters of REL and Fortis Hospital and Godwani was the CMD of Religare Enterprise Ltd till 2016.
• The report stated that they had allured investors to invest and also assured more commission if they bought more investors.
• However, they incurred huge losses and at the same time closed down the office of the firm without returning the money of the complainants.
• The applicants filed a plea and the high-powered committee had moved the plea granting interim bail to under trial prisoners due to the existing pandemic situation. This plea was denied by the High Court.
• The high-powered committee was formed on the order of the Supreme Court in March to lay down guidelines to manage the criminals in jail to prevent the virus from spreading. This committee was headed by the senior judge of the High Court of Delhi.
• The applicants had applied for interim bail and had argued that the investors were well aware of the fluctuating situation of cryptocurrency in the market at the time of their investment and had filed a case based on statements made by the complainants. They further added that there was no prima facie case of cheating.

Courts Observation

• The court stated that the applicants despite having a gold business, failed to return the amount to the investors and this fact could not be overlooked.
• The court also observed that there had been an unjust and arbitrary classification made by the high-powered committee because cases that come under the PMLA Act and cases investigated by CBI/ED/NIA/ Special Cell of Delhi Police and terror-related cases cannot be accepted as there has been no distinction made between these offences and other offences on grounds of intelligible differentia.
• The court also stated that to release an accused on interim bail or bail is a non-bailable offence and it depends upon the discretion of the court to grant such bail and it is not the right of the accused.
• The court further observed that economic offences corrode the fabric of democracy and are against the interest and safety of the nation. Economic offences are considered to be a breach of trust and faith against the national economy. The nature of the case was not considered by the high-powered committee while moving the plea of the accused. The applicants were hence accused of taking the advantage of the Covid situation and was asking for interim bail instead of a normal bail

Courts Orders

• The Delhi High Court, after taking into consideration the facts of the case ordered that the applicants should not be released on bail as it was not appropriate. They had dubbed the innocent investors in investing their hard-earned money by making false promises and also did not return the money despite being owners of the gold business.
• The Court dismissed the application of the applicants.

Questions

Is cryptocurrency one of the major reasons that cause economic crimes in the country? How can we ensure that innocent investors are not dubbed by unprofessional businessmen for looting their money?
Let us know your views on the issue in the comment section below!