Court sentences 3 to 5 years in jail for cheating investors in 20-year-old case

New Delhi: Thousands of investors see a ray of hope in a 20-year fight for justice after a Delhi court sentenced the three directors of two companies, who had induced the public to invest in the firms promising handsome returns, to five years in jail for cheating.

Mujeeb-Ur-Rehman, his wife Shaista Nusrat and Habib-Ur-Rehman were sentenced under sections 120-B (criminal conspiracy) and 420 (cheating) of the Indian Penal Code. Additional Chief Metropolitan Magistrate Pawan Singh Rajawat also slapped a fine of Rs 50,000 on each of them.

The convicts had incorporated two companies M/s Habib Investment Ltd and M/s Habib Mercantile Ltd in 1995 with the aim of encouraging savings and investments by receiving deposits without authorisation, according to the prosecution.

The court said it is "satisfied...beyond reasonable doubt" that the convicts acting through the two companies cheated the public with the false promise of giving handsome returns.

The companies were also fined Rs 50,000 each by the court.

The court rejected the convicts' plea for suspension of the sentence pending appeal under the provision of the Criminal Procedure of Code (CrPC).

"The majority of investors are yet to receive their money and I am satisfied that if the convicts are released they may try to scuttle the process of disbursal of the invested amount. Hence, no grounds are made out to suspend the sentence. Application under section 389 CrPC stands dismissed," the judge said in a a recent judgment.

He sent them to Tihar jail to serve the sentence.

The charge sheet filed by the Economic Offences Wing (EoW) of Delhi police had stated that the companies and the directors in conspiracy with 17 others cheated investors by receiving over Rs 3 crore in various schemes of daily deposit and FDRs.

The companies did not have any authorisation from the Reserve Bank of India, it stated.

When the investors went to collect the return on their investments, they found the company offices locked and the accused absconding.

The investors filed a complaint with the EoW and an FIR was registered.