A court in Cuttack, Odisha on Tuesday sentenced the chief of a real estate firm to five-year imprisonment for duping over 150 people of Rs 1.5 crore. Shiridi Sai Estate Ltd (SSEL) Managing Director Prakash Panda’s is the first conviction under the Odisha Protection of Interests of Depositors Act that enacted in 2011 to protect small investors and home buyers.Panda, who was arrested in February 2014, was slapped a Rs 2 lakh fine as well.
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SSEL had duped unsuspecting investors after promising to provide them homestead land at a low price. It had agreed to return double of the invested money if the firm failed to provide the land. Some investors filed a petition in the Orissa High Court demanding action against the company after it provided neither land nor money. The law under which Panda was convicted was introduced in December 2011 to rein in dodgy non-banking finance companies and unincorporated bodies after scores of chit funds and cooperatives swindled hundreds of crores. It ensures that depositors would get their returns with benefits/interest accrued, which are not available under the provisions of the Reserve Bank of India Act.
The state government had last year announced that depositors losing Rs 10,000 or below will be considered as small depositors and priority will be accorded to them while making refunds. It wanted to start the refund process before panchayat polls in February next year but procedural issues have delayed the process.