VERY, VERY SERIOUS MATTERS IN CBI REPORT ON SARADHA CASE: SC
27, Mar 2019
Prelims level : Polity / Governance – Supreme Court Mains level : GS II Important aspects of governance, transparency and accountability, e-governance- applications, models, successes, limitations, and potential; citizens charters, transparency & accountability
The Supreme Court asked whether it is expected to close its eyes, “suppose if some very very serious matters” come to light.
Brief about the case:
- The court’s observation came after perusing the CBI’s status report on the examination of former Kolkata Police Commissioner Rajeev Kumar in Shillong in connection with the multi- crore ponzi scam cases, including the Saradha and Rose Valley scandals. A three-judge Bench, led by Chief Justice Ranjan Gogoi, however refrained from making any comments on the contents.
What is Ponzi scheme?
- A Ponzi scheme is an investment fraud where clients are promised a large profit in short term at little or no risk at all. Companies engaged in a Ponzi schemes mainly focus all of their energies into attracting new clients to make investments.
- This new investments (income) are used to pay original investors their returns, marked as a profit from a legitimate transaction. Ponzi schemes mainly rely on a constant flow of new investments to provide returns to older investors. When this flow runs out, the scheme falls apart.
Central Bureau of Investigation (CBI)
- CBI is the foremost investigative police agency in India.
- It is non constitutional and non-statutory body.
- It derives power to investigate from the Delhi Special Police Establishment Act, 1946 It was established in 1941 as the Special Police Establishment.
- It was renamed to present nomenclature in 1963.
- Headquarters: New Delhi.
- Motto: Industry, Impartiality, Integrity.
- It is headed by Director, an IPS officer of DGP rank.
- He is selected as per the provisions of Central Vigilance Commission (CVC) Act, 2003
- The CBI Director is selected by a collegium comprising Prime Minister, Chief Justice of India and Leader of Opposition or leader of the largest party in opposition in Lok Sabha.