Supreme Court Issues Notice To Centre, TN Govt On Plea For CBI Probe Into Universal Trading Multi-State Ponzi Scam

The Supreme Court recently issued notice to the Union of India and the State of Tamil Nadu in a plea seeking an investigation by the Central Bureau of Investigation (CBI) into an alleged Ponzi scheme run by the Universal Trading Solutions Private Limited, a Coimbatore-based company.

A bench comprising Chief Justice of India Surya Kant and Justice Joymalya Bagchi was considering a writ petition filed by some depositors who lost their life-savings in the scheme. It is alleged that matter is an inter-State financial deposit scheme scam involving around 73,000 depositors who have lost over Rs.1000 crores.

According to the petitioners, the investigation being carried out by the the Economic Offences Wing(EoW) of the Tamil Nadu police is contrary to Banning of Unregulated Deposit Schemes Act, 2019 (BUDS Act), as per which the investigation must be handled by the CBI.

"It is submitted that continuation of a-parallel State-level investigation in Tamil Nadu would lead to fragmented,, inconsistent and ineffective prosecution," the petitioners submit.

To briefly state, the case of the depositors is that Universal Trading Solution Ltd and its Managing Director, G Ramesh, offered a fraudulent scheme, as per which they were assured 12% interest/annum, along with the 10% principal repaid before the 16th of every month. They were also promised that repayment would be completed within 1 year from the date of acceptance of the deposits under the scheme. However, soon the company made defaults and siphoned off the money and diverted for the acquisition of immovable properties.

Though the company was based in Tamil Nadu, it received deposits from at least four South Indian States.

Background

In 2019, a complaint was lodged before the EoW, Coimbatore, which led to the registration of a first information report under Sections 406 and 420 of the Indian Penal Code; the Tamil Nadu Protection of Interests of Depositors Act, 1997; and the BUDS Act. The Director, Ramesh, filed a writ petition before the Madras High Court seeking to quash the FIR.

Subsequently, the Madras High Court appointed two separate committees headed by Justice KN Basha(retired) and Justice M. Sathyanarayana(retired) to oversee the distribution of the amounts to the depositors. But subsequently, the committees were disposed.

Meanwhile, the Kerala High Court directed a CBI investigation. Subsequently, the State of Kerala granted consent under Section 6 of the Delhi Special Police Establishment Act.

As a result, the petitioners approached the Supreme Court, which, on May 9, 2023, appointed Justice M. Govindaraj, former judge of the Madras High Court, to supervise the sale of properties. However, the petitioners' grievance is that the Justice Govindaraj Committee till date has not held any auction of the properties or disbursed any amount to the depositors.

The petitioners have stated that the investigation carried out by the Tamil Nadu police is against the scheme of the BUDS Act. Therefore, must be transferred to CBI.

Case Details: SURESHKUMAR & ORS v. UNION OF INDIA & ORS.|Writ Petition(s)(Criminal) No(s). 47/2026

Click Here To Read Order

Appearances: For Petitioner(s) : Mr. Mukund P. Unny, AOR Mr. Sanjay Nair S, Adv