2013 (1) TMI 202 - SC - Companies Law

Refund amounts collected through RHPs - direction to furnish the details with supporting documents to establish whether they had refunded any amount to the persons who had subscribed through RHPs as directed in 2012 (9) TMI 559 - SUPREME COURT dated 31st August, 2012 - whether the time for implementing the directions contained in the earlier order of 31st August, 2012, may be extended or not? - Held that - Since, in the order of 31st August, 2012, it has been indicated that if any payments had been made, the details thereof, along with supporting documents, were to be submitted to SEBI to verify the same. Essentially, the appellants have failed on both counts, since neither the amount indicated in the order, together with interest @ 15% per annum, accrued thereon, has been paid, nor have the documents been submitted within the time stipulated in the said order. Appellants shall immediately hand over the Demand Drafts as produced in Court, to SEBI, for a total sum of Rs. 5120/- Crores and deposit the balance in terms of the order of 31st August, 2012, namely, Rs. 17,400/- Crores and the entire amount, including the amount mentioned above, together with interest at the rate of 15% per annum with SEBI, in two installments. The first installment of Rs. 10,000/- Crores, shall be deposited with SEBI within the first week of January, 2013. The remaining balance, along with the interest within the first week of February, 2013. The time for filing documents in support of the refunds made to any person, as claimed by the appellants, is extended by a period of 15 days. On receipt of the said documents, SEBI shall implement the directions contained in the order passed on 31st August, 2012 & if default occurs the directions contained in order dated 31st August, 2012, shall immediately come into effect and SEBI will be entitled to take all legal remedies, including attachment and sale of properties, freezing of bank accounts etc. for relisation of the balance dues.

Summary

Issues involved:
1. Prematurity of appeal against Securities Appellate Tribunal's order.
2. Extension of time for implementing directions regarding refund of amounts collected through public issue of Optionally Fully Convertible Debentures.

Analysis:
1. The appeal before the Supreme Court challenged the Securities Appellate Tribunal's order, which held the appeal premature as it was filed before the directions issued by the Supreme Court in earlier appeals were implemented. The Supreme Court declined to interfere with the Tribunal's order, focusing on extending the time for implementing the directions instead.

2. The Supreme Court had earlier directed the appellants to refund amounts collected through public issues along with interest, and to submit supporting documents within specified timelines. The appellants failed to comply with the timelines set by the Court. The Court emphasized the importance of fulfilling the obligations outlined in the previous order, highlighting that any payments made should be supported by proper documentation for verification by SEBI.

3. The appellants were directed to immediately hand over Demand Drafts totaling Rs. 5120 Crores to SEBI and deposit the remaining balance as per the previous order. The Court extended the deadline for depositing the remaining amount and supporting documents by 15 days. Failure to comply would empower SEBI to take legal actions for recovery, including attachment and sale of properties.

4. The Court reiterated the role of Mr. Justice B.N. Agrawal in overseeing the implementation of the directions and ordered the appellants to bear the costs of the respondents. Any excess payments made by the appellants would be refunded by SEBI. The Court concluded by disposing of the appeal, writ petition, and intervention applications as per the signed order.

By maintaining the focus on the timely implementation of directions related to refunding collected amounts and supporting documentation submission, the Supreme Court ensured compliance with its previous orders and safeguarded the interests of investors and regulatory authorities.