• Cheating in the name of investment

We came across a guy who invests in the stock market and gives monthly fixed return on investement through a common friend. We invested 1 lakh on Feb 2022 and the guy started paying Rs 4000 as a fixed return on investment from March 2022 as promised. This payment continued till June 2022 and we invested another 1 lakh in Jun 2022 to get Rs 8000 return every month from Jul 2022.

However, from Jul 2022, he stopped paying us any returns on our investment. When we enquired, he said there is some issues going on market and he will start paying back soon. 6 months passed with no payments and we demanded him to return our investment. 

When we made the investment, he told us that the investment will be returned whenever we need back but we need to give atleast 15 days notice for returning the money.

From Jul 2023 till date, neither we have received any returns on our investment nor we have got back the invested amount despite several requests. He always make some excuse or the other when we call and demand for the money. As on date, the total sum payable to us is 3.28 lakhs (2 lakhs investement + 1.26 lakhs return @ 8000 per month). Even he didnot give us the agreement paper which we had insisted for while making the investment.

My questions on the above scenario are:
1. Whether this can be treated as fraud under section 420 of IPC
2. We have several whatsapp chats and call recordings available with us to prove our investment and the false promises made by the person of returning our money. Can those be used to file a case against the person in poloce station under section 420?
Asked 8 months ago in Criminal Law
Religion: Hindu

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7 Answers

File police complaint against him under section 406,420 of IPC 

 

2) enclose copy of what’s app chats and transcripts of audio recordings to your complaint 

Ajay Sethi
Advocate, Mumbai
95146 Answers
7597 Consultations

5.0 on 5.0

The return of investment at the rate of 4% per month or Rs,. 48% per annum is exorbitant and will attract the penal provisions of prevention of exorbitant interest act. 

Moreover since that person is investing this amount in the share market which has no guaranteed returns,there is no guarantee for the invested amount.

If you have invested in the share market through him then you may have to bear the market losses.

however if you had given this amount as a loan to him then on the basis of the documentary evidences you can take legal action to recover the loan amount.

The audio recordings and the whatsapp chat messages are not admissible as primary evidence in court of law. 

Even though you may give a police complaint since this is pertaining to your investment and not a loan amount, the police may not entertain your complaint too. 

However you can issue a legal notice demanding the amount he had obtained from you with minimum interest and make him committed to the demand made after which you can file a money recovery suit to recover your amount

T Kalaiselvan
Advocate, Vellore
85348 Answers
2227 Consultations

5.0 on 5.0

- As per law, a stock broker licence is necessary for doing the business of stock market 

- Further , investing others amount in the share market without obtaining a  license is considered as cheating 

- Hence, you can lodge a complaint before the police for the offence of cheating and breach of trust.

Mohammed Shahzad
Advocate, Delhi
13486 Answers
200 Consultations

5.0 on 5.0

You must immediately file a police complaint, based on the messages and phone calls. Don't worry about the sections...  That's the job of the police.

Netra Mohanchandra Pant
Advocate, Navi Mumbai
1553 Answers
5 Consultations

4.4 on 5.0

Yes you can file a criminal complaint or FIR against the offenders 

Prashant Nayak
Advocate, Mumbai
32146 Answers
183 Consultations

4.1 on 5.0

Dear Client,

As per the fact of the case first you should approach a lawyer and apply issue a legal notice to the person accusing all the fraudness he has done as per the WhatsApp chat between he and you.

clearly describe all the statements between u and that person in the notice.

 

Thank You

Ayantika Mondal
Advocate, Bangalore
27 Answers
9 Consultations

4.0 on 5.0

Regarding whether this can be treated as fraud under Section 420 of the Indian Penal Code (IPC), it appears that there might be elements of fraud involved. Section 420 deals with cheating and dishonestly inducing delivery of property. If you have evidence that the person made false promises and did not return your investment as agreed, it could potentially be considered a case of cheating under Section 420.

 

The WhatsApp chats and call recordings can be valuable pieces of evidence if you decide to pursue legal action. They can help establish the terms of your investment, the promises made, and the person's failure to fulfill those promises.

 

 

Anik Miu
Advocate, Bangalore
9153 Answers
111 Consultations

4.7 on 5.0

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