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2014 (4) TMI 1316 - HC - SEBIAppropriate directions from the Court to the Court appointed Committee to carry out the affairs and manage the properties and sell the assets of the Golden Forests (India) Ltd and its group companies - Golden Projects Ltd introduced a number of investment schemes promising handsome returns lured investors and depositors and in 9-10 years collected several hundred crores of rupees. Huge tracts of lands and property were acquired by it; likewise a large number of properties were acquired in the name of Golden Tourist Resorts and Developers Ltd and others in the name of Himachal Country Resorts Ltd and some other companies. HELD THAT - Given the constraints and limitation as well as the uncertainities associated with the task of applying a uniform principle to ensure fairness to investors the Court had heard submissions on behalf of the Committee the SEBI and the representatives of investors. Initially the suggestion of the Committee to make slab-wise disbursements to investors who had deposited/paid Rs. 5000/- in a graded manner did not appeal to the Court because the proposal was premised upon the assumption that those who deposited more than Rs. 5000/- (the principal limit proposed to be finally supplied with one-time interest payment) were affluent. In these circumstances the Court directed the Committee to revise the claim and apply a non-discriminatory principle because it was felt that an assumption that someone who deposited Rs. 20, 000/- in 1996 or 1997 is more affluent than one who deposited Rs. 5, 000/- would not be accurate. It is quite likely that those who participated deposited amounts higher than Rs. 5000/- have not parted with substantial amounts of their live savings could not ruled out especially because of the nature of claims held out by the GFIL and its group companies. With this objective the Court examined the feasibility of applying one principle i.e. for instance making-up one-time payment to all depositors to the extent of Rs. 5, 000/- with a one-time interest payment. Court was informed that this would take care finally of the claims in respect of 1110098 depositors who had paid Rs. 216.25 crores. In addition so far as 363.7 depositors who had paid Rs. 5000/- and above were concerned the Committee outgoings would have been Rs. 181.91/- only towards the principal amount. This Court is of the opinion that even though the adoption of one principle is fair yet the possibilities of disbursements (specifying investors who have paid Rs. 3000/-) regardless of the total amount deposited result in an outgoing of Rs. 309.60 crores. As on date there is uncertainty with respect to the litigation pending in regard to at least three properties; the Committee is facing a possible reimbursement claim to the tune of Rs. 65 crores. We were also informed that an income tax payment of Rs. 32 crores towards capital gains has been made. Having regard to all these aspects this Court is of the opinion that at this stage it would not be appropriate to direct any claim. Instead the Court is of the opinion that an expert ought to be appointed to assist the Committee in its task of ensuring the management of its funds and evolving a method of disbursing the amounts whenever the position becomes clear. Accordingly the Court hereby directs the RBI to nominate an expert not necessarily in its employment and preferably residing in Chandigarh or near that city with sufficient expertise in such matters to advise the Committee in its task of (a) Managing the funds available with it to optimise their returns having regard to the previous orders of the Court; (b) To evolve a feasible practicable method for disbursement of various amounts to depositors and investors. For the moment this Court feels that this would be the most appropriate course given the fluid situation. The Court proposes to consider the question of disbursement at a later stage after obtaining the report of the expert. Governor RBI is requested to indicate the name of a suitable professional or individual preferably including one amongst its former officials who can assist in the task indicated above.
Issues Involved:
1. Management and Sale of Assets of Golden Forests (India) Ltd (GFIL) and its Group Companies. 2. Claims and Disbursement to Depositors/Investors. 3. Legal Proceedings and Orders Affecting the GFIL Group. 4. Appointment and Role of the Committee in Managing GFIL's Affairs. 5. Issues Related to Identification and Sale of Properties. 6. Distribution Scheme for Investors and Related Challenges. 7. Appointment of an Expert for Fund Management and Disbursement. Issue-wise Detailed Analysis: 1. Management and Sale of Assets of Golden Forests (India) Ltd (GFIL) and its Group Companies: The judgment addresses the management and sale of assets of GFIL and its group companies, which were involved in collecting large sums from investors through various schemes. The Supreme Court constituted a committee to manage and take custody of the company's assets, issue public notices for claims, and oversee the sale of properties. The committee was empowered to sell the properties by auction, subject to court confirmation, to discharge liabilities. 2. Claims and Disbursement to Depositors/Investors: The court dealt with the claims of approximately 15 lakh investors who had not been paid. The Supreme Court directed that claims be accepted only with original receipts, and no claims for deposits after January 1, 2001, were to be entertained. A scheme for disbursement was proposed, giving preference to 'small' investors. The court emphasized equitable distribution based on non-discriminatory principles and considered various proposals for disbursing funds, including slab-wise payments. 3. Legal Proceedings and Orders Affecting the GFIL Group: Multiple legal proceedings were consolidated and transferred to the Supreme Court, which issued several orders to manage the affairs of GFIL. The court restrained the company from alienating properties and appointed a provisional liquidator. The judgment outlines the history of legal orders, including those from the Bombay High Court and the Supreme Court, which aimed to protect investors and manage the company's assets. 4. Appointment and Role of the Committee in Managing GFIL's Affairs: A committee was appointed by the Supreme Court, initially chaired by Justice K.T. Thomas and later by Justice R.N. Aggarwal, to manage GFIL's assets and liabilities. The committee was tasked with inviting claims, managing funds, and overseeing the sale of properties. The court directed the committee to prepare a scheme for disbursement and report on the status of funds and properties. 5. Issues Related to Identification and Sale of Properties: The judgment highlights challenges in identifying and recovering GFIL's properties. The committee faced difficulties due to incomplete information and lack of cooperation from GFIL. The court directed state authorities to assist in identifying and recovering properties. The committee reported the status of properties and funds, including incomplete sales and pending litigation. 6. Distribution Scheme for Investors and Related Challenges: The court considered various proposals for distributing funds to investors, including final payments and interim payments based on investment slabs. The committee proposed several alternatives, each with different financial implications. The court sought a fair and practical approach, considering the available funds and the need for equitable treatment of all investors. 7. Appointment of an Expert for Fund Management and Disbursement: Given the complexities and uncertainties, the court decided to appoint an expert to assist the committee in managing funds and devising a disbursement method. The Reserve Bank of India (RBI) was requested to nominate a suitable expert to advise on fund management and disbursement strategies, ensuring optimal returns and fair distribution to investors. The judgment reflects the court's efforts to balance the interests of investors with the practical challenges of managing and distributing GFIL's assets, emphasizing transparency, fairness, and legal compliance throughout the process.
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