Madras HC remanded matter back as SEBI failed to fix liability on writ-applicant
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- Last Updated on 27 September, 2021
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Case Details: Golden Trees Plantation Ltd. v. Securities & Exchange Board of India - [2021] 130 taxmann.com 410 (Gujarat)
Judicial and Counsel Details
- J.B. Pardiwala and Ilesh J. Vora, JJ
- Jaimin R. Dave and Hirva R. Dave for the Petitioner. Ms. Dharmishta Raval for the Respondent.
Facts of the Case
In this case, the market regulator, SEBI, noted that the schemes floated by Applicant Company squarely fell within the definition of a “Collective Investment Scheme” as defined under section 11AA of the SEBI Act and that investors had lodged several complaints alleging that the company was not resolving their grievances regarding dues repayment.
High Court Held
Consequently, the SEBI issued an order requiring the applicant business to stop its current plan and repay money received under the scheme (with returns due to investors in accordance with terms of offer).
However, the directive included no mention of or explanation for how the amount was to be calculated. As a result, the ruling did not specify any specific responsibility that writ-applicants must discharge.
If upon such order, recovery was sought to be undertaken of an amount of Rs. 1068 crores, then it was expected of concerned authority to at least issue a notice to writ-applicants and give an opportunity of hearing before arriving at a particular figure
Hence, impugned recovery notice was to be quashed and set aside and the matter was to be remanded back for adjudication afresh.
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