Calcutta High Court (Appellete Side)
Mps Greeneary Developers Ltd. & Anr vs Securities And Exchange Board Of India & ... on 9 May, 2024
09.05.2024
rpan/04
Ct. No.22
WPA 27927 of 2012
+
IA No.: CAN 1 of 2014 (Old No.: CAN 8548 of 2014) [Not
found]
MPS Greeneary Developers Ltd. & Anr.
- Versus -
Securities and Exchange Board of India & Others
Mr. Swatarup Banerjee,
Mr. Ratul Biswas,
Mr. Kaushik Chowdhury,
Mr. Santanu Chatterjee
... for the Petitioners.
Mr. Rupak Ghosh,
Mr. Prasanta Kumar Dutt,
Mr. Susanta Kumar Dutt,
Mr. Syamantak Banerjee
... for the SEBI.
A legal wrangle over a question whether the present
writ petition should be placed before the Hon'ble Division
Bench taking 'Ponzy matters', has suddenly clogged the
passage and resultantly obstructed dispositive motion of
the Court. As such, to proceed further, the clog is to be
removed.
For this limited purpose, the background facts which
are responsible for such stalemate situation must be noticed.
In 1995, the petitioner no.1/company (hereinafter, the
company) was incorporated in the Registrar of companies in
terms of Companies Act, 1956. Further the objectives of the
company, it started collecting funds from investors with
promise of high return. On 15.10.1999, SEBI (Collective
Investment Scheme) Regulations, 1999 was notified creating
an embargo upon any person, any company etc. in raising
2
and/or collecting fund from any investor without obtaining
certificate of registration from SEBI. By preferring a writ
petition being WP no. 2151 of 2000, the company challenged
the propriety of the Regulations and prayed for a direction
upon the SEBI to consider its application for grant of
certificate of registration, which was presented before SEBI
by the company under its covering letter dated 8.3.2000.
The writ petition was disposed of directing the SEBI to
consider the application. The application was rejected on
3.9.2002. Such order of rejection faced a challenge in WP no. 1971 of 2002 However, the writ petition being WP no. 1971 of 2002 was disposed of granting liberty to the company to submit best documents and the SEBI was directed to consider the best documents and take decision.
On 21.8.2009, a provisional certificate was issued but the company was prohibited from launching any scheme and raising any fund from the investors.
Then the company started issuing prohibitory letters to its marketing agents one after another who in their turn started filing civil suits in different civil courts of State and obtained the orders of injunction against their own company and utilizing the interim orders to its fullest extent, they started raising funds. When SEBI came to know about initiation of such suits and the interim orders passed therein, it entered appearance in those suits and went on filing applications under Or. 7 R.11 CPC seeking rejection of those plaints. In some suits, plaints were rejected but still some 3 suits are pending in different courts of the State and the interim orders passed in those suits are still in operation.
In the meantime, by an order dated 6.12.2012, the SEBI issued following directions upon the company:
'to wind up its scheme(s) identified as Collective Investment Schemes and refund the money collected by it under the scheme(s) with returns which are due to the investors as per the terms of the offer within a period of one month from the date of this order.' Questing the sustainability of the order dated 6.1.2012, the present writ petition has been instituted.
Mr. Ghosh, learned advocate for the SEBI seeks to contend that the company introduced a 'ponzy' scheme and collected huge funds from the commoners of the State and ultimately, the funds have been misappropriated. He informs that some of the investors have filed a writ petition before this Court which is pending consideration before the Hon'ble Division Bench taking 'ponzy matters'.
Mr. Banerjee took serious exception in using the words 'ponzy matters'. He vociferously contends that issue raised in this writ petition is still unresolved and at this stage, branding the writ petition as 'ponzy matter' would not be justified. Inviting my attention to an interlocutory order passed by a Hon'ble coordinate Bench of this Court in this writ petition, he seeks to argue that in that interlocutory order, the expression 'chit fund' was used. The interlocutory order was carried in an intra-court appeal. The Hon'ble 4 Division Bench disposed of the appeal granting liberty to the company to prefer an application for review of that interlocutory order and accordingly, an application for review was taken out, which was ultimately disposed of holding that the view taken in that interlocutory order is not conclusive.
Since the pleadings used by the parties in the matter pending before the Hon'ble Division Bench were not placed before this Court, this Court granted liberty to the petitioners as well as the SEBI to submit their supplementary affidavits to enable the Court to ascertain whether or not the subject matter of these two proceedings are identical. As such, the petitioners as well as the SEBI filed their respective supplementary affidavits.
Mr. Banerjee, learned advocate, representing the petitioners seeks to argue that the present writ petition was instituted in 2012 whereas the Hon'ble Special Bench was constituted in 2020 and he riposted the claim of Mr. Dutta that both the matters are similar and contended that in the present writ petition, the petitioners have prayed for a writ of mandamus commanding the SEBI to grant certificate of registration in favour of the company.
Heard the learned advocates. Perused the materials on record.
A bird eye's view of the order under challenge in the present writ petition would reveal that the company collected huge funds amounting to Rs. 1520 crores from the 5 investors. Admittedly, till date, SEBI did not permit the company to collect any fund from any investor. In this writ petition, challenge has been thrown to the legality of the order dated 6.12.2012 issued by the SEBI and no prayer to grant certificate of registration has been appended to the writ petition.
In a decision, reported at (2014) 8 SCC 768 (Subrata Chattoraj vs. Union of India & Ors.), the Hon'ble Apex Court lamented that in the State, some of the companies floated several schemes to allure the depositors, who fell prey to temptation to get high return, to deposit their hard-earned money but ultimately the investors did not get back their funds.
Considering the gravity of this issue and its huge impact upon a large secti0n of the people of the State, this Hon'ble Court deemed it fit to constitute a Hon'ble Division Bench to deal with such matters with an objective to avoid any conflict of decision, multiplicity of litigation etc. Admittedly, the words 'ponzy matters' were coined to signify the matters of like nature. In the judgment delivered in case of Subrata Chattoraj (supra), the Hon'ble Apex Court also coined these words for same purpose.
Mr. Banerjee apprehends that use of words 'ponzy matters' in the order or reference of this writ petition to the Hon'ble Special Bench will lead to an automatic presumption that the Court with a pre-conceived mind has put its seal of 6 'ponzy matters' on this writ petition also. I am of view that there cannot be any justification of such apprehension.
Admittedly, like other cases, the CBI has been probing the allegations brought against the company. Indisputably, a group of investors preferred a writ petition being WP no. 4059 (W) of 2015 primarily seeking a direction upon the company to pay back their money. I have been informed that the order passed in WP no. 4059 (W) of 2015 was carried in an intra-court appeal vide. MAT no. 559 of 2015 which is pending before the Hon'ble Special Bench taking 'ponzy matters'.
By the order dated 6.12.2012 which is under challenge in this writ petition, SEBI directed the company to refund the money collected by it under the scheme(s) with returns which are due to the investors as per the terms of the offer within the time specified in the order.
Therefore, it is quite vivid and luminescent that there is thematic unity of issues involved in the appeal and in the present writ petition since the subject matters of both the lis being the funds collected by the company from the investors are same.
Therefore, in view of foregoing analysis, I am of the considered view that this matter should also be placed before the Hon'ble Special Bench for appropriate resolution of the issues raised in this writ petition as well.
In view thereof, let this matter be placed before the Hon'ble the Chief Justice for passing appropriate order to 7 assign the matter before the Hon'ble Special Bench taking 'ponzy matters'.
(Partha Sarathi Chatterjee, J.)