TaxTMI 
TaxTMI 
2014 (4) TMI 1316
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....mising handsome returns lured investors and depositors, and in 9-10 years collected several hundred crores of rupees. Huge tracts of lands and property were acquired by it; likewise a large number of properties were acquired in the name of Golden Tourist Resorts and Developers Ltd and others in the name of Himachal Country Resorts Ltd and some other companies. 3. The GFIL group were controlled controlled by a family consisting of A. L. Syal, R. K. Syal, Neena Syal, Pamila Syal, Bimla Syal (since dead), H. K. Sinha (Brother in Law of R. K. Syal). In 1997, the Securities Exchange Board of India (SEBI) inquired into the activities of GFIL group and a two member Committee was constituted. Its report was submitted on 21-04-1998. The report highlighted financial and other irregularities committed by the company. A writ petition was filed in the Bombay High Court by SEBI in which an order was passed against GFIL restraining it from alienating the properties; a similar order was passed by this High Court in the same year. SEBI on 09-01-1998 made an order prohibiting the company from alienating its properties. Justice M. L. Pendse (Retired) was appointed as Receiver and certain properties ....
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.... 25.10.2004. As required by the Supreme Court, the period for the receipt of the claims from the investors and creditors was extended by 3 months and this information was widely advertised in leading vernacular newspapers, in all States. Advertisements were published and the period was extended from 19.2.2005 to 20.5.2005. The period fixed in the first advertisement expired on 24.1.2005. Nevertheless, the Committee continued to receive the claims even after the expiry of that period and later the claims were received during the extended period. The Supreme Court in its order dated 05.09.2006 fixed 10.08.2006 as the cut-off date for receiving claims. Since claims from the depositors of GFIL continued, the Supreme Court directed that no deposit accepted by an Agent after 1st January 2001 is to be considered as GFIL had closed business in December 2000 and the Directors of the company were in the Jail in December 2000. The Court also directed that there should be clear proof of deposit of money with GFIL or its group. The relevant part of the Supreme Court's order of 5-9-2006 is extracted below:- "The committee should accept the claims of only those claimants, who have original auth....
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....evenue authorities of the respective States are also directed to help in removal of such illegal encroachments. C. Directions regarding sale of properties: 36. Directions for sale are sought in respect of the properties at Jharmari, lands at Village Kot Billa, Jaswant Garh and other adjoining villages and a Resort at Nalagarh, and the mode and procedure for the sale of the properties of GFIL, possession of which has been taken. 37. The Committee is put at liberty to put to sale the properties at Village Jharmari, lands at Village Kot Billa, Jaswant Garh and other adjoining villages and a Resort at Nalagarh and other properties of GFIL, possession of which has already been taken by the Committee, by auction after due publicity. The sale shall be subject to the confirmation by this Court. After the properties are put to sale, the Committee shall report to this Court about the auction sale effected which shall be subject to the final orders of this Court. D. Setting aside sale of immovable properties: 38. The Committee has sought the following directions : (a) to issue directions for setting aside the illegal sales of properties of GFIL and its subsidiary and associa....
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.... who have not been paid. On 15.10.2008 the Supreme Court made the following order: "........As regards the sale of properties is concerned, the Committee may make appropriate publication regarding the sale and sufficient notices be issued to the prospective purchasers by publishing the same in the local newspapers having wide circulation in the area where the property is situated. Any sale conducted by the Committee shall be based on valuation made by either by the Committee or by other approved valuer and upset price is fixed before sale is finalized. The sale is, however, subject to the confirmation by this Court. As soon as the sale is over, the details including the purchase price and all the details shall be made over to this Court for the purpose of confirmation. As soon as the bid is over the applicant/the prospective purchaser shall deposit 20% of the amount in a nationalized bank in the account maintained by the Committee. If there is any difficulty in getting the possession of any property owned by the respondents, the matter shall be reported to this Court and/or the Committee can also itself request for police aid or any other assistance from the governmental authorit....
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....d order reads as follows: "CM NO. 20351/ 2011 This application is dismissed as not pressed in view of the statement made by learned counsel for the respondent Chairman, Committee of Golden Forests Ltd. & Others, that more than Rs. 400 crores have already been collected by the Committee on disposal of various assets of the company. He further informs that another property is sold for Rs. 98 crores approximately and the amount shall be realized soon and with this, the collection would swell to about Rs. 500 crores. There is a proposal to devise a scheme vide which the Committee shall now start disbursing the said amount to various small investors. It is assured that all these aspects shall be pointed out in the main petition to seek appropriate orders from the Court. The petitioner is satisfied with the proposal. The application is dismissed as not pressed. Acting Chief Justice Rajiv Sahai Endlaw" 9. After notice was issued on the application, seeking directions to disburse amounts collected due to sale of assets of GFIL and its group companies, the Committee filed a status report as a step to assist in framing a scheme for disbursement of amounts. This court had occa....
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....or reimbursing the depositors beyond Rs. 5,000/- or having regard to the quantum of deposits made by them and give a preferential treatment to the small investors. In other words, this Court feels that before sanctioning the scheme which has been proposed, the Committee should work out another scheme which envisions the disbursement by adopting a slab or some such device so that all investors are treated alike in terms of the amounts deposited by them and proportionate, as the case may be." 11. The above revised scheme for disbursement of monies to depositors of the GFIL or its group companies made on 20.05.2013 was further revised; on 20.08.2013, the Committee in its second revision proposed several alternatives. In this proposal, the Committee disclosed that as on 31.03.2013, it had fixed deposits to the tune of Rs. 4,33,41,58,613/-. In the scheme proposed, the Committee states as follows: "2. The Committee has worked out various alternatives and calculated the total funds required for disbursement in each case. The Committee has prepared a chart (Annexure A-1) showing calculations in terms of different slab of investors, their principal amounts and one time interest amounts.....
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....hout interest accrued thereon), sale of which are incomplete, therefore, this amount has to be kept aside in calculating the available funds. So, the Committee is left with Rs. 302 crores only. However, the Committee is expecting Rs. 10 crore approx. to be added as interest. Financial Status and mode of distribution: 5. The Committee (GFIL) as on 31.03.2013 has in the Fixed Deposit Rs. 433,41,58,613/-. We have in our earlier scheme made certain recommendations, namely for appointment of Disbursing Agency either SEBI or Reserve Bank of India or any other suitable agency for payment of money slab wise, that is, upto Rs. 1000/- thereafter, upto Rs. 2000/- and so on. The Committee fears that a large number of cheques may be received back undelivered and arrangement shall have to be made for their being dealt with. 6. The Committee emphasise that all out effort should be made to make the payment to the investors in one go and not by instalments, since heavy expenditure is to be incurred in payment of each instalment. Also payment in instalment would mean, besides incurring heaving expenditure, other problem such as handling of the undelivered post. The committee prays that its ....
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....ors Amt./Part Payment (Rs. In crore) Rate Amount Amount to be paid (Rs. In crore) 1 to 5000 1110098 216.25 30% 64.88 281.13 5001 and above 363817 181.91 0% 0 181.91 Total 1473915 398.16 0 64.88 463.03 PROPOSALS ON THE BASIS OF CALCULATION NO.3 AS CONTAINED IN ANNEXURE A-1 Proposal-1 Final payment to investors upto Rs. 3000/- with one time 30% interest and interim payment of Rs. 3000 to rest of the investors (without interest) Amount deposit - SLAB No. of investors Principal Amt./Part Payment (Rs. In crore) Interest Rate Interest Amount Total Amount to be paid (Rs. In crore) 1 to 3000 861654 96.86 30% 29.06 125.92 3001 and above 612261 183.68 0% 0.00 183.68 Total 1473915 280.54 29.06 309.60 Proposal-2 Final payment to investors upto Rs. 3000/- with one time 30% interest and interim payment of Rs. 3000 to rest of the investors (With 10% interest) Amount deposit - No. of Principal Amt./Part Interest Interest Total Amount to SLAB investors Payment (Rs. In crore) Rate Amount be paid (Rs. In crore) 1 to 3000 861654 96.86 30% 29.06 125.92 3001 and above 612261 183.68 10% 18.37 202.05 Total 1473915 ....
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....ion with respect to assets not included in the valuation report spread over seven states, i.e. Punjab, Odisha, Karnataka, Andhra Pradesh, Madhya Pradesh, Delhi and Himachal Pradesh otherwise to the extent of 3520.90 acres. Thus, according to the information received by the Committee, the total land of the Golden Forest groups was 9914.90 acres. The Committee revealed that 485.73 acres had been sold and 2476.73 acres were put to sale but the transactions could not be completed. A consolidated chart of all the holdings were disclosed in the form of Annexure A-6. Furthermore, the Committee mentioned that some litigation pertaining to some properties are pending in this Court and in the Supreme Court, notably, SLP No. 24996-97/2013 in respect of property in Mussourie. The affidavit further states as follows: "FUNDS STATUS 17. The Committee under the order of the Hon'ble Court filed audited report for the year 2012-13. As per the audited report, the total funds lying in the bank accounts of the Committee were reported to be Rs. 433,41,58,613/-. As the banks credit interests on FDRs on quarterly basis, the present status of funds has slightly changed. Moreover, one of the auction-sa....
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....onstituted which consists of one member of SEBI, a member of RBI and a representative of one of the investors. The Board should identify and ascertain the exact number of properties of the company spread throughout the length and breadth of the country and thereafter, every effort should be made to ascertain the actual liabilities of all the investors of GFIL Group of companies. It is suggested that if the Advisory Board fails to take over the assets of GFIL companies spread throughout the country, the Board should hand over the land unit to the willing owners who originally deposited Rs. 5,000/- and above and was allotted units of land given in the guarantee-cum-performance deed by the GFIL. It was urged that the investors have waited for more than nine years and do not see any sight to the agony being suffered by them. In respect of SEBI dated 13.12.2013, made pursuant to this Court's directions, in the order of 30.10.2013, it is stated that the body (SEBI) is not legally empowered or competent to comment on the mode of utilisation of properties of GFIL and disbursement of funds to its investors. It is stated that in terms of Regulation 73 of SEBI (Collective Investment Schemes) ....
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....associated with the task of applying a uniform principle to ensure fairness to investors, the Court had heard submissions on behalf of the Committee, the SEBI and the representatives of investors. Initially, the suggestion of the Committee to make slab-wise disbursements to investors, who had deposited/paid Rs. 5000/- in a graded manner, did not appeal to the Court because the proposal was premised upon the assumption that those who deposited more than Rs. 5000/- (the principal limit proposed to be finally supplied with one-time interest payment) were affluent. In these circumstances, the Court directed the Committee to revise the claim and apply a non-discriminatory principle because it was felt that an assumption that someone who deposited Rs. 20,000/- in 1996 or 1997 is more affluent than one who deposited Rs. 5,000/- would not be accurate. It is quite likely that those who participated deposited amounts higher than Rs. 5000/- have not parted with substantial amounts of their live savings could not ruled out especially because of the nature of claims held out by the GFIL and its group companies. With this objective, the Court examined the feasibility of applying one principle, i....