Allowed

Banashree Mohanty & Ors. v. Recovery Officer, Securities & Exchange Board of India (Sebi) & Ors.

Delhi HC10 Feb 2020W.P.(C)/1534/2020

Case brief

AI extract

What is this about?

The writ petition against the SEBI Recovery Officer regarding non-disbursal of funds recovered from NCD violations was disposed of. The court directed the Recovery Officer to consider the petitioners' request for disbursal and ordered SEBI to hasten recovery proceedings.

What did the court decide?

Petition allowed with directions to Recovery Officer to consider petitioners' request for disbursal and to SEBI to hasten recovery process.

Banashree Mohanty & Ors. Vs Recovery Officer, Securities… — Company and Corporate | Delhi HC (2020)

¶1

$~36

¶2

IN THE HIGH COURT OF DELHI AT NEW DELHI

¶3

- W.P.(C) 1534/2020

¶4

BANASHREE MOHANTY & ORS ..... Petitioners

¶5

Through: Mr. Shivanath Mahanta, Advocate.

¶6

versus

¶7

RECOVERY OFFICER, SECURITIES & EXCHANGE BOARD OF INDIA (SEBI) & ORS ..... Respondents Through: Mr. Sanjay Mann, Advocate for respondent no. 1 & 2.

¶8

CORAM:

¶9

HON'BLE MR. JUSTICE RAJIV SHAKDHER

¶10

O R D E R

¶11

% 10.02.2020

¶12

CM APPL. 5359/2020 (Exemption)

¶13

Allowed, subject to just exceptions.

¶14

W.P.(C) 1534/2020

¶15

Issue notice to the respondents.

¶16

Mr. Sanjay Mann accepts notice on behalf of respondent no. 1 & 2.

¶17

In view of the prayers made in the writ petition, for the moment, no notice needs to be issued to respondent no. 3.

¶18

The prayers made in the petition are directed against respondent no. 1 & 2, though they emanate on account of the infractions committed by respondent no. 3 company.

¶19

page 1 of 3

¶20

W.P.(C) 1534/2020

¶21

The record shows that the Securities and Exchange Board of India (in short “SEBI”) vide order dated 24.07.2015 had directed respondent no. 3 company and its Directors and Promoters to refund the money illegally mobilised by them via Non- Convertible Redeemable Debentures (in short “NCDs”) which were issued contrary to public norms stipulated under the Companies Act 1956.

¶22

The direction to refund the money entailed that the money refunded would include repayment to the investors.

¶23

Since this order of SEBI was not complied with, recovery proceedings were commenced by SEBI’s Recovery Officer.

¶24

Vide order dated 21.07.2017, the Recovery officer issued a slew of directions which are contained in paragraph 9 of his order.

¶25

The petitioners claim that there has been no movement in the matter since then.

¶26

The petitioners also claim that they are small investors and therefore SEBI should ensure that the money recovered through sale of assets or otherwise should be distributed amongst them.

¶27

Mr. Sanjay Mann, who, appears on advance notice on behalf of respondent no. 1 & 2 i.e. Recovery Officer and, in effect, the SEBI says that only Rs. 5,60,000/- has been recovered.

¶28

Learned counsel says that steps are being taken to recover the further sums in terms of the orders passed by the SEBI and its Recovery Officer. 14. I may indicate that petitioners claim that they had made a representation to the SEBI on 10.07.2018 for disbursal of funds has which not been disposed of.

¶29

W.P.(C) 1534/2020

¶30

page 2 of 3

¶31

Given the aforesaid circumstances, the writ petition is disposed of with a direction to respondent no. 1 & 2 to consider the request of the petitioners for disbursal of amounts out of the recoveries made, albeit , as per law and keeping in mind its own orders.

¶32

Furthermore, SEBI is directed to hasten the process of recovery so that the difficulties faced by the petitioners and similarly circumstanced investors are redressed.

¶33

RAJIV SHAKDHER, J

¶34

FEBRUARY 10, 2020

¶35

¶36

W.P.(C) 1534/2020 page 3 of 3

Banashree Mohanty & Ors. v. Recovery Officer, Securities & Exchange Board of India (Sebi) & Ors.

Case brief

What is this about?

What did the court decide?

Banashree Mohanty & Ors. v. Recovery Officer, Securities & Exchange Board of India (Sebi) & Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

Similar cases

Vitthal College of Education and Anr. Vs National Council for Teacher Education and Anr.

Sanjay Bhandari Vs Union of India & Ors.

Sarju Rai Memorial Degree College Vs National Council for Teacher Education & Anr.

Sayala College Sayala Vs National Council for Teacher Education & Ors.

M/S. Bas Engineering Pvt. Ltd. Vs Karamvir Singh

S K Cosmetics Vs the Controller General of Patents, Designs and Trade Marks and Ors.

M. D. Overseas Limited Vs Union of India and Ors.

Alok Kumar Vs Jawaharlal Nehru University & Anr.

Vitthal College of Education and Anr. Vs National Council for Teacher Education and Anr.

Sarju Rai Memorial Degree College Vs National Council for Teacher Education & Anr.

Sayala College Sayala Vs National Council for Teacher Education & Ors.

Shree Ramakrishna B. T. College through Its Principal Vs National Council for Teacher Education and Ors.

Pandua College of Education Vs National Council for Teacher Education and Anr.

Rahul Kumar and Ors. Vs Union of India and Anr.