AT Chit Fund Scam- Orissa HC Dismisses Former Advocate General Ashok Mohanty's Plea For Discharge

The Orissa High Court has dismissed the criminal revision petition filed by former Advocate General of Odisha Ashok Mohanty who is an accused in the Artha Tatwa Ponzi scam.

"…on a careful scrutiny, serious deliberations and analysis of the materials on record, it cannot be said that the accusation levelled against the petitioner by the prosecution particularly for the commission of offences under sections 120-B, 409, 468 and 471 of the Indian Penal Code are groundless and that there are no sufficient grounds for proceeding against the petitioner for such offences. Accordingly, the CRLREV petition being devoid of merits, stands dismissed.", the bench of Justice SK Sahoo held while dismissing the petition.

Ashok Mohanty has been charge-sheeted under sections 120-B, 406, 409, 411, 420, 468, 471 of Indian Penal Code read with sections 4, 5 and 6 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.

In September, the Supreme Court had requested the High Court to consider and dispose of the petition in an expeditious manner. The order was passed on a petition filed by the Center contending that the matter is pending before the High Court since 2018 and that the proceeding before the Special Court pending since 2014 is held up.

In this case, FIR was filed against the Artha Tatwa (AT) Group of Companies. In the FIR the informants alleged, inter alia, that they along with the other depositors paid huge amounts to the Company for getting higher returns in terms of interests and incentives under various schemes floated by the Company and cheap flats/plots under various projects undertaken by the Company represented by its Chief Managing Director Pradeep Kumar Sethy.

It was further alleged that the company neither refunded the amount due to the depositors/investors as agreed upon nor constructed the flats as per agreement and also did not sell the alleged land to the investors/depositors.

On being asked by the depositors/investors to refund the money paid to the company by them, accused Pradeep Kumar Sethy and other Directors of the Company closed down the branch offices at various places of Odisha and fled away.

In the charge sheet against the petitioner- Ashok Mohanty, it is stated that he was the Advocate General of Odisha during the period from June 2009 to September 2014. He had purchased a building in Bidanashi, Cuttack from the accused Pradeep Kumar Sethy.

As per records, accused Pradeep Kumar Sethy had purchased the said building from one of the Judge of the Orissa High Court for consideration of Rs.1,00,00,000/- (rupees one crore) during April 2011 out of the money flown from the accounts of the Company and later, transferred the said plot to the petitioner.

Though the sale transaction was shown to be of Rs.1,01,00,000/- (rupees one crore one lakh), but in fact an amount of Rs.70,00,000/- (rupees seventy lakhs) only was paid by the petitioner to the accused Pradeep Kumar Sethy.

During the course of the investigation, two money receipts were seized from the official premises of the petitioner indicating the payment of Rs.1,01,00,000/- (rupees one crore one lakh) towards consideration. The said money receipts bore the forged signatures of accused Pradeep Kumar Sethy.

As per the charge sheet, the petitioner misappropriated the balance amount of rupees thirty-one lakhs that he was supposed to pay to the accused Pradeep Kumar Sethy.

The Trial Court rejected the discharge petition filed by Mohanty.

He approached the Orissa High Court seeking setting aside of the order rejecting the petition filed by him under section 239 of Cr.P.C. for discharge and posting the case for consideration of charge.

Senior Advocate Santosh Kumar Mund appeared for petitioner- Ashok Mohanty whereas Special Public Prosecutor Sarthak Nayak appeared for CBI.

At the outset, the Court noted that Non-challenging of the propriety of investigation from the day the F.I.R. was registered so also the order of taking cognizance after submission of charge sheet, cannot be a ground to reject the discharge petition.

The Court further observed that the conclusions arrived at by the trial Court in the impugned order without assigning any cogent reasons reflected non-application of mind.

The Court observed that "In view of fact that the learned trial Court has passed the impugned order in a mechanical manner, though I was contemplating of sending the matter on remand to the said Court to decide the matter afresh by passing a reasoned order discussing the contentions raised but as the matter is pending in this Court since 2018 and the further proceeding in the trial Court has been stayed and taking note of the same, the Hon'ble Supreme Court in its order dated 12.09.2022 passed in SLP (Crl.) Nos.5366-5367 of 2022 requested this Court to dispose of this revision petition in an expeditious manner, it would be proper on my part to deal with the submissions…"

The Court observed that the charge sheet revealed that in view of the promise of higher returns in terms of interest and incentives under various schemes floated by the Company, the depositors invested huge amount with the Company. The Court further observed that the Company failed to deliver on its promise and neither did it return the amount due to the depositors/investors as agreed upon nor did it construct the flats as agreed upon.

"After collecting such deposits from the innocent depositors for some period, the Company allegedly completely stopped functioning and thus in that process many investors who had invested money with the company were duped. When agitations were going on against the Company and against the accused Pradeep Kumar Sethy, in view of the close nexus between the said accused with the petitioner, it is the prosecution case that there was no stiff objection from the side of the State during the hearing of the bail application and even case diary was not called for and no prayer was made from the side of the State before the concerned Court seeking time to call for the case diary and that facilitated the accused Pradeep Kumar Sethy to get anticipatory bail. What happened between the petitioner and the accused Pradeep Kumar Sethy prior to the grant of bail and after that are very much relevant for the purpose of making out a prima facie case against the petitioner relating to the offences under which charge sheet has been submitted against him.", the Court observed further.

The Court noted that there are important statements and material documents which were collected during course of investigation against the petitioner to substantiate criminal conspiracy aspect. The Court also noted that strong suspicion founded upon such materials form a presumptive opinion as to the existence of factual ingredients constituting such offence

The Court observed that "When being entrusted with the property or dominion over the property which was purchased by utilizing the public deposits, without receiving the full amount, accused Pradeep Kumar Sethy disposed of the property by way of sale to the petitioner for his use for alleged obvious reasons and thereby the petitioner was benefited by Rs.31 lakhs and in that process, the public money of Rs.31 lakhs was misappropriated…"

The Court further noted that there has been a wrongful gain of Rs.31 lakhs to the petitioner.

The Court observed that on a careful scrutiny, serious deliberations and analysis of the materials on record, it cannot be said that the accusation levelled against the petitioner by the prosecution, particularly for the commission of offences under sections 120-B, 409, 468 and 471 of the Indian Penal Code are groundless.

Accordingly, the criminal revision petition filed by the former Advocate General was dismissed.

Before parting with the Judgment, the Court directed the Trial Court to expedite the framing of charges. The Court further directed the Trial Court to conclude the trial preferably within one year from the date of framing of charges.

Cause Title- Asok @ Ashok Mohanty v. Republic of India

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