In a world where financial transactions are increasingly complex and technology-driven, understanding the dangers of scam and its consequences is more important than ever. Scam is a global issue with far- reaching impacts on stakeholders including eroded trust and financial losses.

•Scam = Any fraudulent technique or activity that is done to gain money or some other valued thing from a person is referred to as a scam. A person who does a scam is known as a scammer.                                               

The terms fraud and scam are often used, but there is an important distinction between these two terms. Fraud and scams are two forms of deception, Fraud typically involves unauthorised access to personal information without the victim’s knowledge or consent. Scams is to manipulate victims into voluntarily providing their information. Fraudsters rely on illegal lessons, while scammers imply psychological manipulation.

 CHARGES: Fraud and Scam is a criminal offence, but the person alleged to have committed fraud and scam can also be taken to civil court. A prosecutor brings criminal cases in criminal court. Victim may file a civil lawsuit against the alleged scammer to recover money. Sometimes, civil and criminal cases together were brought against an accused of fraudulent activity. In civil lawsuit, the standard of proof is lower. Instead of proving guilt beyond a reasonable doubt, the attorney or for the victim only needs to prove guilt by a preponderance of the evidence. Another way to say that is “it’s more likely than not that the alleged circumstances occurred in the manner.”

CRIMINAL CHARGES: The penalties for fraud and Scam depend upon the type of fraud and Scam, the number of victims, and the amount of financial loss. Punishment often includes an imprisonment sentence, an order of restitution to make the victim whole again, and fines.

In criminal law, prosecutors should prove beyond a reasonable doubt. That is the evidence is adequate and the government proves facts and establishes guilt. This is a degree of surety than a civil case. The penalties are very strict if found guilty.

The prosecutor must prove the following to get a conviction:                                                                          >There was a purposeful deception, such as false statement or misrepresentation of an important fact, 

>There was intent to deprive the victim of something, usually money,

>The victim suffered or could have suffered an actual loss due to the fraudulent activity.                                 The nature of fraud may determine whether a victim brings their case to state or federal court. For example, if anyone wants to defraud the federal government, the prosecution will likely be in federal court.

In the past decades, there have been many unethical conducts in the business of various professions which affected the public at large. Most of the scams and frauds are done by influential people of the society and hence, have a great impact. The Country has witnessed the largest scams of the decade, one of them is the Vijay Mallya scam of Rs. 9000 Crores. The scam done by Vijay Mallya is further discussed in detail in this article.

>Vijay Mallya, the owner of company Kingfisher, took a loan of more than Rs. 9000 Crores and flew to the U.K. on March 2, 2016. The Government of India ruled and decided to seek extradition of him from the U.K. in February 2017, India made a formal request for extradition of Mallya as per the extradition treaty. As an initial step, Vijay Mallya was arrested by Scotland Yard and was presented before the U.K. court. This case is still pending in court as of present now.

Facts of the case->The former member of Parliament, (Rajya Sabha) and a famous businessman, named Vijay Mallya is the ex-chairman of United Spirits and the Chairman of United Breweries group Indulged beverage, alcohol, fertilisers and real estate business.   ->He became the chairman of the company at the age of 28 and focused on the growth of his family business and companies since then. He’s also known to own a famous IPL team, RCB (Royal Challenger Bangalore) for a long period of time.

->With his hard work and efforts, the company was capable to take sudden movement in turnover, making it 64% in 1999. He also expanded his business outside the country in many foreign countries and acquired Berger paints in his name.                                                                             

-> He has also been elected as a member of Parliament two times from Karnataka.

 ->He decided to expand his business of liquor and airlines but was advised by the members of the company. Without paying any attention to their advice, he sold one of his companies to collect funds for his business of Airline. He invested all the collected funds in the Airlines, because of which his Kingfisher Airlines become the popular domestic airlines in the country.    ->He desired to dilate the Airlines, but the government imposed various restrictions and did not grant it to carry forward with international flights. Because of this, he manipulated his own United Breweries company to buy another company going to loss I.e., Deccan Airlines, and combined it with his own airlines, but could not make profits as wanted and indeed suffered a great loss.                                                             ->To continue his business, he took loans from various banks like PNB, AXIS BANK, SBI, etc., but was not returning it back. Many banks declared him bankrupt and did not provide further loans, but he continued to take it from different banks using his influential power and position.                                                                                     

->Another unethical practise done by his airlines was that they were not paying any PF and salaries to the employees and taxes to the government. With its great losses continuously, he denied paying the remunerations of his employees and shut down his business. 

>>Mallya has denied all the allegations and publicly offered to repay the full principal amount he owes the lenders. But he is not acting upon his statements and his action reveals that he has not returned the principal amount. 

The honourable Supreme Court in 2017 ordered him multiple times to appear before the court but he ignored the order. Consequently, the court charged him with Contempt of court and fraud and ordered the government to seek his extradition.

: -The government of India is making all possible efforts to extradite Mallya from the U.K. In February 2019, U.K. Home Secretary approved the extradition. The case is now pending in the London High Court, where Mallya filed a petition against the order. The appeal has been listed for a 3-day hearing from February 11, 2020.

Conclusion= The Vijay Mallya scam serves as a wakeup call for businesses and regulatory bodies to prioritize risk management, risk assessment, fraud management, and fraud advisory practices. Additionally, strengthening corporate governance practices and regulatory frameworks in vital to deter fraudsters and protect the interests of all stakeholders. By learning from such scams and implementing preventive measures, we can build a more resilient and transparent corporate law system.  



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