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TMI Blog2021 (11) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... Adv., Mr. Aman Lekhi, ASG, Mr. Mukesh Kumar Maroria, AOR, Ms. Shirin Khajuria, Adv., Ms. Binu Tamta, Adv. And Ms. Swarupma Chaturvedi, Adv. For the SEBI : Mr. Pratap Venugopal, Advocate, Ms. Surekha Raman, Advocate, Mr. Akhil Abraham Roy, Advocate, Mr. Vijay Valsan, Advocate, for M/s. K.J. JOHN & CO., Dr. Abhishek Manu Singhvi, Sr. Adv., Mr. Vikram Nankani, Sr. Adv., Mr. Nitesh Jain, Adv., Mr. Syed Jafar Alam, Adv., Ms. Shivani Khandekar, Adv., Mr. Adrish Majumder, Adv., Mr. Gokul Holani, Adv., Mr. Vinod Sharma, AOR, Mr. Ritesh Agrawal, AOR, Mrs. Anil Katiyar, AOR, Mrs. Rachana Joshi Issar, AOR, Mr. Amit Kumar, AOR, Mr. Sanveer Mehlwal, Adv., Mr. Dhiraj Kumar, Adv., Ms. Geetanjali Mehlwal, Adv., Ms. Kamakshi S. Mehlwal, AOR, Mr. Somiran Sharma, AOR, Mr. Aditya Singh, AOR, Mr. Prashant Bhushan, AOR, Mr. P.S. Patwalia, Sr. Adv., Mr. Gagan Gupta, AOR, Mr. Suren Uppal, Adv., Mr. Aviral Kashyap, AOR, Ms. Samiksha Gupta, Adv., Mr. Arvind Kumar Tripathi, Adv., Mr. Rajiv Ranjan Dwivedi, AOR, Mr. Pratap Shanker, Adv., Mr. Rakesh Kumar Singh, Adv., Ms. Nupur Prasad, Adv., Ms. Shilpi Shrivastava, Adv., Mr. Ankit Kumar, Adv., Mr. Swetank Shantanu, AOR, Mr. Shantanu Kumar, AOR, Mr. Darpan KM, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Adv., Ms. Girjesh Chaturvedi, Adv., Mr. Yadaiah Jetti, Adv., Mr. Abhishek Singh, AOR, Ms. Mohini Priya, AOR, Mr. Md. Shahid Anwar, AOR, Mr. Vikas Singh Jangra, AOR, Mr. Abhinav Bajaj, Adv., Dr. Rajeev Sharma, AOR, Mr. Prashant Sharma, Adv., Mr. Raghuvir Sharma, Adv., Mr. Vipin Kumar Sharma, Adv., Mr. Dharmendra Sharma, Adv., Ms. Shipra Shukla, Adv., Mr. Girdhari Singh Chauhan, Adv., Ms. Meena Hasan, Adv., Mr. Avijit Mani Tripathi, AOR, Mr. Pradeep Kant, Sr. Adv., Mr. Abhinav Agrawal, AOR, Mr. Aditya Sinha, Adv., Mr. Aman Mishra, Adv., Ms. Swati Bhardwaj, Adv., Mr. Mohit Paul, AOR, Mr. Kedar Nath Tripathy, AOR, Mr. Ratnesh Kumar Shukla, AOR, Ms. Garima Bajaj, AOR, M/s. KSN & Co., Mr. Shivendra Singh, AOR, Mr. Gp. Capt. Karan Singh Bhati, AOR, Ms. Chitrangda Rastravara, Adv., Mr. Manvendra Singh Rathore, Adv., Ms. Ameya Thanvi,Adv., Mr. Dashrath Singh, Adv., Ms. Gunjan Negi, Adv., Dr. Joseph Aristotle, Sr. Adv., Ms. Priya Aristotle, AOR, Mr. Pradeep Rai, Sr. Adv., Mr. Sandeep Bajaj, Adv, Mr. Soayib Qureshi, AOR, Ms. Aakanksha Nehra, Adv, Mr. Parag Rai, Adv, Mr. Akarsh Sharma, Adv, Mr. Mohnish Nirwan, Adv, Ms. Ritika Gaur, Adv, Ms. Uttara Babbar, AOR, Mr. Manan Bansal, Adv., Mr. Rame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before SAT to the effect that the moneys which are lying in specified bank accounts would, upon de-freezing/lifting of the attachment imposed by SEBI, be used for meeting the company's expenses and payments in the ordinary course of business, until the appeals are disposed of by SAT. 3 The genesis of these proceedings traces back to an order dated 2 February 2016 of this Court, by which a Committee chaired by Justice R M Lodha, former Chief Justice of India was constituted for disposing of the land parcels of PACL in order that the sale proceedings could be utilized for the payment of investors. Without dwelling in detail on the factual background, it would suffice to note that SEBI, by an order dated 22 August 2014, concluded that PACL had mobilized an amount of Rs. 49,100 crores from investors under a collective investment scheme without registration and in violation of the SEBI (Collective Investment Schemes) Regulations 1999. The order passed by SEBI on 22 August 2014 was affirmed by SAT on 12 August 2015 following which multiple appeals were filed before this Court, resulting in the order dated 2 February 2016. 4 The order dated 2 February 2016 makes it abundant clear tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to investments/deposits etc. in/with PACL Ltd. or its Directors/Promoters/Group Companies/Entities/Individuals etc.;" 5 SEBI has, in its IA, set out the fact that the Enforcement Directorate intimated the Justice Lodha Committee that twenty five associates of PACL had transferred funds into Systematix Venture Capital Trust "Systematix", as noted in the first Status Report of the Committee. The Committee found, upon examination, that an amount of Rs. 19.04 crores had been repaid directly by Systematix to twenty five front/associate entities and recommended the initiation of recovery proceedings. SEBI issued an attachment notice dated 30 April 2019 with respect to twenty five entities. A further investigation was conducted and placed before the Committee by SEBI to examine broadly all fund transfers of Systematix. The result of the examination is elaborated in paragraph 17 of the IA filed by SEBI, which, inter alia, records that: "17. The examination also revealed Systematix has just launched one scheme i.e. Scheme I since its inception. Also, out of total 26 investors in Scheme I of Systematix, 25 were admitted associate entities of PACL as per information provided by PACL itself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost completely held the shareholding of both companies. 25. It may be noted that NSB which had shareholding in DDPL after Systematix investment and in Unicorn prior to Systematix investment was company of Mr. Prateek Kumar who sold/transferred 80% stake in NSB to PACL later on. 26. As per PACL Ltd.'s letter dated 30th September, 2016, PACL had transferred around Rs. 1500 Crores to Mr. Prateek Kumar and Prateek Kumar had entered a Definitive Agreement for Settlement with PACL on 2nd October, 2013. As per statement of one of the Directors of PACL, Mr. Prateek Kumar used to procure land for PACL. 27. The Investigation Report gave a finding that Mr. Prateek Kumar was front of PACL. PACL held 51 % stake in DDPL and 67% in Unicorn, directly and also indirectly through Mr. Prateek Kumar and NSB, at the time of investment by Systematix. 28. In 2015, Systematix subscribed to rights issue of DDPL and Unicorn bringing up its shareholding to 58.02 percent in DDPL and 59.92 percent in Unicorn." 7 After considering the above material, the Justice Lodha Committee has taken note of the following facts: "a. PACL had transferred Rs. 110.95 crores to 5 companies (as noted in para 5 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 4 August 2017 9 Accordingly, a notice of demand and attachment order was issued by SEBI on 1 March 2021. The attachment notice was challenged before SAT. SAT, while entertaining the appeals, stayed the attachment orders and permitted both DDPL and Unicorn to operate their accounts in the ordinary course of business. 10 Mr Pratap Venugopal, learned counsel appearing on behalf of SEBI, has navigated the Court through the contents of the IA and the underlying annexures while explaining the object and purpose of the orders passed by this Court from time to time. It has been urged that SEBI's action is in the implementation of the directions of this Court under Article 142 of the Constitution and that, in consequence, the assumption of jurisdiction by SAT as well as the order dated 26 March 2021 would virtually negate the directions which have been issued by this Court. 11 On the other hand, Dr Abhishek Manu Singhvi, learned Senior Counsel appearing on behalf of DDPL and Unicorn, objected to the IA instituted by SEBI on the following grounds: (i) SEBI, instead of instituting an appeal under Section 15Z of the SEBI Act, has chosen to move an IA in the pending proceedings; (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the directions of this Court. It was duty bound to and has brought the order of this Court to the notice of SAT. The stay on the order of the attachment would effectively obstruct the implementation of the directions of this Court. The entertaining of the appeals by SAT and its interim order are contrary to the directions issued by this Court dated 2 May 2016 in terms of prayer (a) of IA 5 of 2016. As a matter of fact, it was inappropriate for SAT to entertain the appeals. Deference to the order of this Court required that the parties should be permitted to move this Court for appropriate directions. In the above view, we are not, at this stage, expressing any opinion on the merits of the defense which has been raised by DDPL and Unicorn to the order of attachment since that would preclude a hearing before, and a report by Shri R S Virk. 13 We accordingly allow the IA on the following terms: (i) The order dated 26 March 2021 passed by SAT in Appeal Nos 161 and 162 of 2021 shall stand vacated; (ii) Further proceedings before SAT in Appeals Nos 161 and 162 of 2021 shall remain stayed; (iii) DDPL and Unicorn shall be at liberty to submit their objections to the order of atta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its authorized representative. 2 Mr Ashok Mathur, learned counsel appears on behalf of the Official Liquidator of the Delhi High Court. Learned counsel states that the property in question was a rented property which was in the occupation of the company in liquidation. The Delhi High Court, this Court is informed, has directed the Official Liquidator to hand over the property to the rightful owner. Learned counsel submits that the Official Liquidator will hand over possession to the Justice R M Lodha Committee provided requisite title documents are produced. 3 At this stage, Mr Pratap Venugopal, learned counsel appearing on behalf of SEBI states that SEBI is in possession of copies of such documents as were handed over to it by the Central Bureaus of Investigation in pursuance of the order of this Court dated 2 February 2016. Hence, it has been submitted that the Official Liquidator may be directed to hand over possession to the authorized representative of SEBI. The Committee, it has been stated, would duly publish a notice so that if any person has a claim in respect of the property, an opportunity would be given to have it adjudicated before Shri R S Virk, former Additional D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12085/16, 12081/16 and 18704/16 so that land in question could be removed from the list of properties attached by the Committee 4 198795/2019 Directions Allow the present application with an appropriate order confirming the Orders dated 06.07.2018 and 31.07.2018 passed by Shr. R.S. Virk Judge (Retd.) in File No.472 having MR Nos.18710/16, 12079/16, 12077/16 so that land in question could be removed from the list of properties attached by the Committee 5 56536/2021 Appropriate orders/directions (a) Accept the recommendation of District Judge (Retd.) Mr. R.S.Virk, made in orders in file No.730 and 730A dated 11.03.2020 and 28.08.2020. (b) Direct the Hon'ble Justice (Retd.) Mr. R.M. Lodha Committee or concerned department to delete the detail of property from the auction website www.sebipaclproperties.com of plot 6 No. 139, Plot admeasuring 810 Sq. Mtrs. in Block-A of Sushant Lok Phase 3, a Township of M/s. Ansal Properties & industries ltd. and situated at sector 57, Gurgaon -122003 from the list of property, maintained for property of PACL and further declare that the property No.139 Plot admeasuring 810 Sq. Mtrs. In Block-A of Sushant Lok Phase 3, a Township of M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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