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2022 (4) TMI 708 - SC - SEBIRelease of the mutual funds in favour of the applicant/Respondent No.5, which are of the value of about 350 crores - Earlier, by order this Court had given the option to applicant/Respondent No.5 to get mutual funds converted/encashed and the amount was to be deposited in a fixed deposit account of a nationalized bank - HELD THAT - The subsequent supplementary chargesheet submitted by the EOW, and relied upon by the learned counsel for the petitioner, ought not to be ignored while considering this matter. In its earlier orders, this Court has clearly found that the securities need to be released in favour of the applicant/Respondent No.5. The only question is with regard to the mode and manner of the securities to be furnished by the applicant/Respondent No.5. It is not disputed that the petitioner has, in terms of the order dated 16.03.2021, complied with the condition of furnishing bank guarantee of ₹ 344.07 Crores. In paragraph 20 of this application filed by the applicant/Respondent No.5, it is stated that the applicant is a public limited company, having sound financials with a strong balancesheet and other financial statements (assets of INR 18,556 Crores and turnover of INR 8,779 Crores during financial year 202021). The same is not denied by the other parties who have filed their respective replies to this application. We are of the opinion that the operative part of the order dated 21.09.2021 deserves to be modified and, accordingly, the same is modified to the extent that instead of bank guarantee for a sum of ₹ 344.07 Crores, which has been furnished by applicant/Respondent No.5, in terms of order dated 16.03.2021, the applicant/Respondent No.5 shall now furnish bank guarantee for a sum of ₹ 100 Crores and it shall further furnish a corporate guarantee to the extent of ₹ 300 Crores. The bank guarantee earlier furnished by the applicant/Respondent No.5 to the extent of ₹ 344.07 Crores shall stand discharged on the applicant/Respondent No.5 fulfilling the above condition to the satisfaction of the Trial Court concerned.
Issues:
- Modification of order dated 21.09.2021 regarding release of mutual funds in favor of Respondent No.5. - Prayers for further modification of the order dated 21.09.2021. - Arguments regarding the conditions imposed in the order dated 21.09.2021. - Subsequent supplementary chargesheet filed by the Economic Offences Wing (EOW). - Compliance with the conditions of furnishing bank guarantee. - Financial position of the applicant/Respondent No.5. Analysis: The main issue in this judgment is the modification of the order dated 21.09.2021 concerning the release of mutual funds in favor of Respondent No.5. Initially, the Court had allowed the release of mutual funds subject to certain conditions, including the furnishing of a bank guarantee. Subsequently, another application was filed seeking further modifications to the conditions imposed. The applicant argued that the conditions were inequitable and unreasonable given the circumstances of the case, especially in light of findings against other parties involved. The Court considered the arguments presented by both parties, including the opposition to further modifications by other counsels representing different parties. The Court took into account the subsequent supplementary chargesheet filed by the EOW, which highlighted findings against certain respondents. Despite the opposition, the Court acknowledged the importance of the chargesheet in the matter at hand. Regarding compliance with the conditions of furnishing the bank guarantee, the Court noted that the applicant had fulfilled the requirement as per the previous order. Additionally, the financial position of the applicant/Respondent No.5 was discussed, emphasizing the strong financial standing of the company. After considering all the arguments and circumstances, the Court decided to modify the order dated 21.09.2021. The modification required the applicant/Respondent No.5 to furnish a reduced bank guarantee amount along with a corporate guarantee. The previous bank guarantee amount would stand discharged upon fulfilling the new conditions to the satisfaction of the Trial Court. The Court clarified that the observations made in the order would not affect the merit of the case, and the appeals would be heard on merit. In conclusion, the Court disposed of the application seeking further modification, providing detailed directions for the revised conditions regarding the bank guarantee and corporate guarantee to be furnished by the applicant/Respondent No.5.
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