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2017 (11) TMI 662 - HC - Companies LawValidity of Cash down land purchase scheme and scheme of land purchase by instalments - SEBI had initiated action against the company for violation of Sections 11-AA and 12(1-B) of the SEBI Act as the company had not obtained a certificate of registration as required under Section 12(1-B) of the SEBI Act - Held that:- Having regard to the number of depositors and the huge stakes involved, it would be a mammoth task to identify the investors, identify the lands that have been purchased, value the land and realize the actual value by way of sale of properties. Learned Amicus Curiae have suggested that it would be appropriate if a committee is constituted consisting inter-alia of Competent Authority under TNPID Act, representatives from the Revenue Department, representatives from the legal fraternity, representatives from the Economic Offences Wing, representatives of SEBI and a team of Chartered Accountants to carry out the task of identifying the investors, identifying the lands that have been purchased, getting the land valued and raising funds for settlement of dues of investors / depositors by actual sale of landed properties. This Court deems it appropriate to constitute a Committee headed by Hon'ble Mr.Justice N.Paul Vasanthakumar, Retired Chief Justice of the Jammu and Kashmir High Court. The Committee shall consist of two senior members of the legal fraternity, namely, Mr.B.Kumar, Mr.M.S.Krishnan, who have been assisting this Court as Amicus Curiae and also Mr.C.Manishankar, Senior Advocate and Additional Advocate General. In addition, the Committee shall include the Competent Authority under TNPID Act, namely, Additional Commissioner of Land Administration or a person nominated by the Additional Commissioner of Land Administration not below the rank of the Joint Secretary to the State Government, two nominees of the Revenue Secretary to the State of Tamil Nadu of the rank of Revenue Divisional Officer, a nominee of the Additional Director General of Police, Economic Offences Wing, not below the rank of Superintendent of Police and a nominee of the Regional Director, SEBI not below the rank of Deputy General Manager. All depositors / investors of the Company should apply to the Committee with details of their investments and documents in support of their claims within the time stipulated in the advertisement. The claims shall be processed by the Committee and the list of depositors and their respective claims shall be finalised. Bogus claims can obviously be rejected. The Committee shall take necessary steps to identify the properties of the Company, its sister concerns, Directors and transferees, to ascertain the location, marketability and title thereto and thereafter proceed to sell the properties. The committee may obtain the assistance of a team of experts of the Revenue Department and a competent legal team to perform the acts mentioned above. The committee may also constitute an Accounting team to look into the bank accounts and other financial documents of the company, its Directors, its sister concerns, etc. and to ascertain whether there has been secretion of funds of the Company. The amounts realized from out of the sale of the properties shall be deposited in a special account opened for this purpose, which may jointly be operated by any two members of the committee nominated by the Chairperson. The Company and each of its Directors shall make an initial deposit of ₹ 10,00,000/- (Rupees ten lakhs only) each for the expenses required for implementation of this order. The Company, its Directors, its sister concerns shall also provide the Committee a befitting office space and infrastructure in Chennai to carry out this order. The office space shall be provided by the Company either at its office in Masilamani Street, T.Nagar, Chennai or at Old Door No.59/1, New No.119, Canal Bank Road, CIT Nagar, Chennai-600 035. In case the amounts realized are not sufficient to settle the claims of all depositors / investors in full, the depositors / investors shall be paid on pro rata basis in proportion with the amounts deposited by them in the Company as substantiated by cogent documents. The FIR shall, however, be kept alive as the prosecution may have to continue if the amounts realized are not sufficient to pay the amounts due to all depositors / investors.
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