'Greedy Investors Pumping Money Into Unsustainable Ventures Distort Market Balance, Must Be Prepared For Consequences': Delhi HC In Cheating Case

The Delhi High Court has held that investors, who gamble their money with impractical promises of “unbelievably high returns”, must own their risks instead of running to the State and crying foul when they face loss.“It may sound brutal but seems fair: if you choose greed, you choose risk; and if you choose risk, you choose consequences…Easy money is a trap. If the returns sound unbelievable, believe this instead: you are next in line to pay the price,” Justice Arun Monga remarked.The Court wondered whether recipients of such investments alone should carry the cross of criminal liability when things go south. It was of the view that the law must punish fraud, but it cannot shield people from the fallout of their own avarice.“An uncomfortable, but necessary reality is if you choose to chase extraordinary gains, you must be prepared for extraordinary losses. Greed is not just a personal flaw; it creates ripple effects. When investors pump money into unsustainable ventures, they inflate bubbles that harm genuine end-users and distort market equilibrium. And when the bubble bursts, they expect the law to paint them as victims, absolving them of all responsibility. The allure of easy money is a dangerous illusion. A responsible society cannot endorse a culture where greed masquerades as innocence,” the Court said.The bench was dealing with a cheating FIR, where the accused promised 24% returns to investors, “inducing” the latter to part with ₹1,93,66,000/- only to face losses.The High Court was of the view that the dispute is purely civil in nature, arising from the non-performance of contractual obligations. It said,“Is non servicing of debt ipso facto a crime? Accepting an answer in the affirmative would be fraught with danger. In a country where debt recovery tribunals are already inundated with cases, every debtor would, by extension, also be branded a criminal. This is not to deny that some debtors may engage in acts of financial misconduct/siphoning off etc. that can amount to criminal offenses. However, when a person consciously lends at high interest or acquires a debt, the fundamental principle of 'buyer beware' should apply, rather than raising an outcry afterward. Proper due diligence is imperative.”The Court then proceeded to observe that “greedy” investors, who run after promises of 24% annual return on a loan, when bank deposits offer barely 1/3rd or 1/4th of that, cannot be permitted to cry victim.It said such unrealistic promises should raise suspicion of an investor, not confidence. “Yet, such offers continue to attract people like moths to a flame. Why? Because in their race for windfall gains, these investors conveniently ignore the basic principle of finance: higher returns mean higher risk,” it remarked.The Court also questions if the investors really were as gullible as they claimed. It pointed out that investors knew exactly what they were signing up for i.e. unbelievably high returns of 24% annually or 2% every month. “These are not returns; these are temptations. Like the complainants herein fell for. Let us call it what it is: a hunger for unearned wealth. When someone promises riches far beyond what the market offers, common sense should scream 'scam'. But greed silences reason.”Another irony, the Court pointed out is that if the recipient had paid them these sky-high returns, he was a hero, a genius, a financial wizard. However, the moment the business crashed, either under the weight of impossible debts or otherwise, he became a criminal in their eyes. “Overnight, their celebration turned into litigation. When you give unsecured loans for such outrageous returns, are you then as innocent an investor ? Nay, perhaps a part gambler. And every gambler knows the rule of the game: when you win, you cheer; when you lose, you pay. You cannot bet your money on wild promises and then run to the law crying 'victim' when the bet goes bad. If you had the courage to take the risk, you must have the spine to face the consequences,” the Court said,It added,“Greed is a silent crime against wisdom. It blinds people to the obvious, drives them into risky ventures, and then makes them demand sympathy when the tide turns. Fraudsters must be punished, yes— but should Courts become shelters for reckless risk-takers. The investor who demands 24% annual returns without security is not a saint wronged; he is a speculator who rolled the dice and lost.”Coming to the merits of allegations, the Court said, the dispute appears to be civil. Even otherwise, it pointed out that the chargesheet was not filed even after an inordinate delay of nearly six years.“The prolonged and unexplained delay in completing the investigation and filing the charge sheet amounts to a clear infringement of the accused's fundamental right to a speedy trial as guaranteed under Article 21 of the Constitution...The sheer delay severely prejudices the right of the accused to defend themselves effectively. Material witnesses may be...

'Greedy Investors Pumping Money Into Unsustainable Ventures Distort Market Balance, Must Be Prepared For Consequences': Delhi HC In Cheating Case

Kapil Dhyani

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