Hi,
I want to know whether police can register a case under 420 for the losses incurred due to inappropriate trading in stock by the broker/portfolio manager.
Please go through the following details:
1. In December 2012 I saw this advertisement in the local paper (see attachment) claiming 6% monthly return against investment in share market trading.
2. So I went to the given address, there I met the owner of Krishna Investments, Mr. Ajay Kumar Verma. At that time he was the franchisee of BMA Wealth Creators Ltd., Reliance Money and TATA Securities. He was also dealing with other financial services like Fixed Deposits etc.
3. After visiting 5-6 times and understanding the scheme properly I opened a Demat account with BMA Wealth Creators Ltd., through Mr. Ajay Kumar Verma.
4. On 04 Jan 2013 I invested Rs. 1,50,000/- through cheque in my Demat account.
5. The scheme was that I will get fixed 6% return per month on my investment and my invested amount will be safe.
6. Trading was to done by Mr. Ajay Kumar Verma, owner of Krishna Investments and for that a written agreement was made (see attachment)
7. I was getting my monthly return of 6% (Rs. 9000) till August 2013 i.e. for 8 months.
8. Didn’t get the agreed return from September 2013 so I went for the follow up on 04 October 2013, Mr. Ajay Kumar Verma told that I will getting it around 20 October 2013, but I didn’t got it and from 21 October 2013 Mr. Ajay Kumar Verma is on the run, his mobile is switched off and the office is closed.
9. Meanwhile I came to know that there are several other investors who have suffered the same fate, so we all went to the police.
Police is saying it is not a fraud or cheating it is just breach of the agreement and is a simple matter of give and take, so no case can be registered under 420.
My question is, why it is not a fraud as:
a. The person is on the run.
b. There are more than 20 investors who have suffered.
c. Some of the investors received payments through cheques which have bounced due to insufficient funds in Mr. Ajay Verma account.
d. Sebi also have regulations for unauthorized trading.