Constitution of India – Art.142 – Invocation of Art.142 for constitution of a High-Powered Sale Committee chaired by a former judge of the Supreme Court of India – Committee tasked with the responsibility of liquidating the assets to generate funds to satisfy claims of the investors:
Held: Writ Petition under Article 32 of the Constitution filed by the Promoters/Directors of the company against which respondent- SEBI has initiated proceedings for illegal mobilization of funds – Suggestion made by counsel appearing for parties for constitution of High-Powered Sale Committee (HPSC) to auction the immovable assets of the companies, to the extent they are required to satisfy the investors’ claims and liquidate all other statutory liabilities of the Companies – Appointment of HPSC chaired by Justice Ravindra Bhat, former judge of the Supreme Court of India [Paras 5, 7] Auction – Of immovable assets of companies – Reasons for constitution of High-Powered Sale Committee (HPSC) – SEBI facing an uphill task in conducting public auctions: Held: Constitution of the HPSC suggested since the Petitioners are languishing in jail as undertrials for over 8 years – Innocent investors have been eagerly awaiting the refund of their hard- earned money for more than a decade – SEBI is facing an uphill task in conducting public auctions of the assets of the company in a timebound manner – SEBI or MPID Court 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 – The conclusion of trials in the pending criminal cases is marred by uncertainty – 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 [Para 6]
Auction – Of immovable assets of companies – Duties and responsibilities of High-Powered Sale Committee (HPSC) – HPSC to have powers of a civil court:
Held: HPSC to obtain all property documents/original title deeds and other relevant records from the SEBI/EOW/MPID Court and Sub-Registrars of different States, where the properties of the company are located – A database of the property documents, along with material details, shall be created – The HPSC shall take necessary steps to ensure that all the properties are shown to be entrusted/encumbered in its favour in the State Government land records – The HPSC shall appoint a pool of Certified Valuers to evaluate the Company’s assets in each State – All the powers of a Civil Court in the HPSC for taking necessary actions to speed up the liquidation of the Companies’ properties vested and conferred in HPSC [Para 7(h)]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Mukund P Unny, Hony. Associate Editor (Verified by: Liz Mathew, Sr. Adv.). Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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