9911796707
TMI Blog2024 (7) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... " 2. The above-stated reliefs have been sought in light of the following set of events predicated in this factual background: - (a) Petitioner Nos. 1 and 2 are the founder-Directors of one Sai Prasad Properties Ltd, incorporated under the provisions of the Companies Act, 1956. Petitioner No. 3 also joined the aforesaid company as a Director in 2008, allegedly when he was still studying in college, and is claimed to have thereafter resigned in the year 2014. The Petitioners also floated various other companies, known as the Sai Group of Companies, consisting of: (i) M/s Sai Prasad Properties Ltd. (hereinafter, "SPPL"); (ii) M/s Sai Prasad Foods Ltd. (hereinafter, "SPFL"); (iii) M/s Sai Prasad Corporation Ltd. (hereinafter, "SPCL"); and (iv) M/s Shree Sai Space Creations Ltd. (hereinafter, "SSSCL"). (b) The Security and Exchange Board of India (hereinafter, "SEBI") received a complaint dated 02.06.2010 alleging illegal mobilisation of funds by SPFL. After processing the said complaint and in furtherance of the orders passed by the High Court of Madhya Pradesh and the Department of Financial Services, Ministry of Finance, the Whole Time Member of SEBI (hereinafter, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chemes. Upon investigation, SEBI found a prima facie violation of Section 11AA (2) of the SEBI Act. Consequently, an interim order-cum-show cause notice was issued on 23.01.2014, directing SSSCL and its Directors to abstain from collecting any money from the investors and from launching or carrying out any Collective Investment Schemes. WTM further directed SSSCL to wind up the existing Collective Investment Schemes, refund the monies collected by it under such schemes and submit a compliance report including the trail of funds claimed to be refunded, bank account statements indicating the refunds to investors, and replies from the investors acknowledging such refunds. In addition, proceedings under Chapter VI-A of the SEBI Act, 1992 were also initiated, and an Adjudicating Officer was appointed to inquire into the violations. (g) It may not be necessary to refer to the subsequent events in relation to the four companies referred to above, except to say that: (i) Penalties were imposed; (ii) Recovery proceedings for a sum of Rs. 30,561,041,451.69 (Three Thousand and Fifty-Six Crores approximately) were initiated; and (iii) All the immovable properties and jewelleries ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Crl.) D. No. 43363/2023, it has been directed that Petitioner No. 3 shall not be arrested in any fresh case registered against the Petitioners on the same or related issues. On 29.04.2024, it was further directed that Petitioner No.3 shall not be arrested in any of the cases registered against him until further orders. 3. Having understood the facts, we shall now advert to the Petitioners' prayer seeking a direction to SEBI to liquidate the attached assets in a time-bound manner and disburse the sale proceeds to genuine investors as early as possible. In this regard, SEBI noted that the Forensic Audit conducted by the Economic Offence Wing (hereinafter, "EOW") revealed that the Companies floated by the Petitioners were liable to refund Rs. 4700 crores, though as per the order passed by the WTM the refund amount was initially Rs. 3049 crores only. It is also not in dispute that there are 498+13 immovable properties owned by the companies; the details whereof have been furnished before the MPID Court, Mumbai. The parties are broadly ad idem that the entire liability of each Company regarding refund of the due amount to all the investors as well as various statutory, foreseen or u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng an uphill task in conducting public auctions in a timebound manner; (d) SEBI or MPID Court, Mumbai do not have the readily available infrastructural and strategical facilities to identify each property, to have fair assessment of their market value, and then to auction them to fetch the true market value; (e) The conclusion of trials in the pending criminal cases is marred by uncertainty; and (f) The Petitioners have shown their bona fide towards refunding the investors' amounts, and any further delay in this regard, will be prejudicial to one and all. 7. Keeping these exceptional and peculiar circumstances in view, we deem it fit to invoke our powers under Article 142 of the Constitution of India, so as to do complete justice between the parties and hence, constitute the HPSC comprising of the following: (a) Hon'ble Mr. Justice S. Ravindra Bhatt, Former Judge, Supreme Court of India - Chairperson; (b) Dr. Justice Satish Chandra, Former Judge, High Court of Allahabad - Member; (c) A nominee of SEBI who shall be an officer preferably in the rank of its Director - Member; (d) States of Chhattisgarh, Maharashtra, Madhya Pradesh, Rajasthan, Uttar Pradesh and Harya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of properties already sold under the supervision of the MPID Court, Mumbai, as well as a separate list of the properties that are yet to be sold; (m) The HPSC will engage/appoint e-auction service providers for auctioning of the assets; (n) Similarly, expert agencies may be empanelled for the valuation of the assets for initiating the public auction process and its advertisement; (o) The final decision regarding the disposal of the assets shall be at the complete discretion of the HPSC and once the sale is made the property shall vest in the buyer, free from all encumbrances. (p) The Petitioners or their nominees will be at liberty to join the auction proceedings and bring prospective buyers. They may submit their suggestions to the HPSC, if any. However, the HPSC will have full discretion to decide on those suggestions, and the Petitioners shall not be entitled to agitate on such issues before this Court or any other forum; (q) The objections, if any, submitted by the Companies against the Forensic Audit Report and which are stated to be pending before the MPID Court, Mumbai, are directed to be decided within two months. A copy of the order shall be forwarded by the MP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the bank account to be operated by HPSC; and (iii) In the event of any pending title dispute, the HPSC shall determine the rights of the Sai Prasad Group of Companies in such properties for the limited purpose of auctioning them. Except for when there are legal impediments, such property shall be auctioned without any delay, and the Petitioners or the authorised representatives of their Companies will execute the necessary documents, including sale deeds, in such cases also. Secretarial cum Administrative requirements 10. With respect to the administrative or secretarial assistance that is necessitated in the course of dealing with these directions, the following may be adhered to: (i) SEBI will assist HPSC in the opening of its office, for the purpose of overall coordination and receiving correspondence from the stakeholders. HPSC will also arrange other infrastructure and may engage secretarial assistance as may be necessary for its smooth functioning. If the SEBI has any adequate office space and infrastructure at a place where the HPSC decides to set up its Principal Office, SEBI may provide the same without prejudice to its right to recover user charges, which will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their own honorarium as it is likely to cause embarrassment to them. Considering all these aspects in view, we issue the following directions:- (i) The Chairperson of the HPSC shall be entitled to an honorarium of Rs. 2 lakhs per sitting day, when effective proceedings are held. This will be in addition to travelling, boarding and other miscellaneous expenses as may be incurred in discharging the assigned responsibilities; (ii) The learned Member, who is a former Judge of the High Court shall be entitled to an honorarium of Rs. 1.50 lakhs per sitting day, when effective proceedings are held. This will be in addition to travelling, boarding and other miscellaneous expenses as may be incurred in discharging the assigned responsibilities; (iii) The Member nominated by SEBI shall not be entitled to any remuneration-since he is a full-time officer of SEBI. However, he shall be entitled to travelling, boarding, and other miscellaneous expenses as may be incurred in discharging the assigned responsibilities; (iv) The Member Secretary cum Nodal Officer of the Committee shall be entitled to an honorarium of Rs. 75 thousand per sitting day, when effective proceedings are held. This ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
