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2017 (6) TMI 1261 - AT - Companies LawCollective Investment Schemes ( CIS ) run without obtaining registration from SEBI - Appellants been directed to refund the money collected from the investors under the schemes with promised returns - Held that - On the last date of hearing, Counsel for the Appellants fairly stated that the Appellants are genuinely interested in implementing the order of SEBI and to prove their bonafides, offered to deposit ₹ 50 lakh with SEBI and also offered to deposit the title deeds of the immovable properties which can be sold by SEBI and utilize the sale proceeds to pay the amounts due to the investors. It is not in dispute that pursuant to our order dated February 24, 2017 the Appellants have deposited ₹ 50 lakh with SEBI and also deposited with SEBI, the original title deeds in respect of the assets set out at page 10 and 11 of the further affidavit filed by the Appellants on February 24, 2017. (a) SEBI is at liberty to get the revaluation of the immovable properties (the title deeds of which are already deposited by the Appellants with SEBI). If revaluation is done, SEBI shall furnish a copy of the revaluation report to the Appellants before auctioning the said immovable properties. (b) SEBI is directed to sell off the immovable properties (the title deeds of which are already deposited with SEBI) as expeditiously as possible and preferably within a period of 6 months from today. (c) Appellants are directed to furnish to SEBI list of other immovable properties and movable properties lying therein belonging to the Appellants and other group concerns within a period of two weeks from today, so that the said immovable properties amended as per the order of the Tribunal dated July 19, 2017. and movable properties lying therein may be sold by SEBI, in case the sale proceeds of the immovable properties referred to at para 5(b) above are not sufficient to meet the amounts payable to the investors. (d) Without the permission of SEBI, the Appellants shall not dispose of, alienate or create any third party rights in respect of other immovable properties, the list of which is being furnished by the Appellants within a period of two weeks from today.
Issues:
1. Challenge to SEBI's order on Collective Investment Schemes (CIS) 2. Rejection of schemes for selling assets 3. Compliance with SEBI's order and deposit of funds and title deeds 4. Directions for revaluation and sale of immovable properties 5. Furnishing list of other properties to SEBI for potential sale Analysis: 1. The first issue pertains to Appeal No. 216 of 2015 challenging SEBI's order on Collective Investment Schemes (CIS). The Tribunal noted that the schemes were held to be CIS run without SEBI registration, directing the appellants to refund money collected from investors with promised returns. 2. The second issue involves Appeal No. 292 of 2016 challenging the rejection of schemes for selling assets by SEBI. The Tribunal observed the rejection of the schemes submitted by the appellants for implementing the previous order. 3. Moving on to the third issue, the appellants expressed genuine interest in complying with SEBI's order. They offered to deposit funds and title deeds to demonstrate their commitment. Following this, the Tribunal directed the appellants to deposit a specified amount with SEBI and provide original title deeds of immovable properties for potential sale. 4. The fourth issue addresses the directions given for revaluation and sale of immovable properties. The Tribunal allowed SEBI to revalue the properties and instructed them to share the revaluation report with the appellants before auctioning. Additionally, SEBI was directed to sell the properties expeditiously, preferably within six months. 5. Lastly, the fifth issue concerns the appellants furnishing a list of other properties to SEBI for potential sale. They were directed to provide details of immovable and movable properties belonging to them and other group concerns within a specified timeframe. The Tribunal prohibited the disposal or alienation of these properties without SEBI's permission. In conclusion, both appeals were disposed of with specific orders regarding compliance with SEBI's directives, revaluation, sale of properties, and disclosure of additional assets. The Tribunal emphasized the appellants' obligation to cooperate with SEBI for the benefit of investors, ensuring no unauthorized transactions with the listed properties.
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