NEW DELHI: Builders who dupe thousands of homebuyers, or those accused of ponzi schemes to defraud investors, will now face multiple prosecutions in Delhi — based on complaints of individual victims — and can be awarded long, consecutive prison terms.

In a landmark verdict, the Delhi high court ended the current practice of Delhi Police (mostly EOW and crime branch) to lodge a single FIR in case of cheating of a large number of investors/depositors where, for instance, a lone homebuyer is treated as the complainant while other affected persons are shown as witnesses in a criminal case.

In such cases, many people are left in the lurch if the sole complainant withdraws the case or reaches a settlement with the builder/accused.

A bench of Justices Vipin Sanghi and I S Mehta termed as “clearly erroneous and not sustainable in law” the practice “of registering a single FIR on the basis of the complaint of one of the complainants/ victims, and of treating the other complainants/victims merely as witnesses.”

The court said it “raises very serious issues with regard to deprivation of rights of such complainants to pursue their complaints, and to ensure that the culprits are brght to justice.”

Spelling out the law in this regard, HC was categorical that in a case of inducement, allurement and cheating of a large number of investors/ depositors, “each deposit by an investor constitutes a separate and individual transaction” and noted that “all such transactions cannot be amalgamated and clubbed into a single FIR by showing one investor as the complainant, and others as witnesses.”

“In respect of each such transaction, it is imperative for the state to register a separate FIR if the complainant discloses commission of a cognisable offence ,” the court observed.

The court rejected the police’s stand that only a single FIR is required in cases where all investors/depositors were cheated in pursuance of a single conspiracy. The EOW argued that commission of multiple acts did not require the registration of separate FIRs for each victim.

In its ruling, the HC highlighted how such a procedure denies other victims the right to “oppose, or to seek cancellation of bail that the accused may seek in relation to their particular transaction.”

The court’s answer came on a reference sent to it by additional district and sessions judge Kamini Lau while dealing with a case involving 1,852 different victims cheated in a ponzi scheme .

In the process, the high court also made it clear that police or any investigating agency probing such an economic offence “cannot amalgamate the separate offences investigated under separate FIRs, into one chargesheet”, as is the current practice.

The HC also held that a limit on the quantum of sentence imposed by the CrPC (where courts award concurrent jail terms in a single trial for more than one IPC section) won’t apply in these cases, where an economic offender faces multiple trials that result in more than one conviction. This means trial courts can now give consecutive prison terms where the second term starts only once the first sentence ends, making the punishment much more rigorous.

