TMI Blog2022 (9) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of any legal or fundamental right of the petitioners. Hence, it cannot be observed that the CBI investigation of the petitioners and the framing of charges are vitiated in any manner, sufficient for the writ court to quash the same. Even if it is assumed for the sake of argument that the list furnished by the SEBI in connection with this writ, containing the name of the petitioner no. 1 company, has not been proved to have been furnished before the Supreme Court in Subrata Chattaraj [ 2014 (10) TMI 328 - SUPREME COURT] , due to the reasons as discussed above, even without relying on such list, and irrespective of the fact that the petitioners were not parties to the said litigation, the petitioners clearly come within the broad sweep of the Supreme Court s directions for investigation relating to the chit fund scam, since charges have been framed against the petitioners long back and after due investigation, the trial of the case is going on at present. Inasmuch as the formation of the One-Man Committee consisting of a retired Hon ble Judge of this Court is concerned, there cannot be any rhyme or reason for this Court, sitting in writ jurisdiction, to direct the said co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hit Funds, to be appointed by the State Government. Section 11AA(3)(vii) of the SEBI Act, 1992 provides that any scheme or arrangement falling within the meaning of chit business as defined in Section 2(d) of the Chit Fund Act, 1932 shall not be a Collective Investment Scheme (CIS). 3. It is contended that vide judgment and order dated June 25, 2009, Sanjib Banerjee, J., in WP No.19716(W) of 2009, directed the SEBI to reconsider the matter of grant of registration to the petitioner no.1 under the SEBI (CIS) Regulations, 1999 by giving an opportunity of hearing to the petitioner no.1 and to pass a reasoned order. Such direction, it is argued, shows clearly that MPS Greenery (petitioner no.1) is a SEBI Company and not a chit fund. 4. The learned Senior Advocate appearing for the petitioners next contends that the judgment of the Supreme Court in the case of Subrata Chattoraj Vs. Union of India and others, reported at (2014) 8 SCC 768 , where the present petitioners were not parties, deals with the financial scam commonly known as the chit fund scam . Since MPS is not a chit fund company or carrying on chit business, the said judgment is not applicable to the petitioner no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice to the petitioners. Hence, it is submitted that the One-Man Committee should be directed to forthwith return the said documents to the petitioners along with all litigation papers. 9. Learned counsel appearing for the SEBI places reliance on the affidavits filed by the SEBI and submits that the SEBI has granted the Provisional Registration Certificate to the petitioner no.1 under certain conditions, including that the petitioners would be restrained from operating in terms of such certificate during the two-year period of the tenure of such certificate. Moreover, it is submitted that the petitioners have flagrantly violated SEBI provisions for which the petitioner is still in custody. It is contended that the CBI investigation is independent of the SEBI measures and, as such, cannot be a ground in the present writ petition. 10. Upon hearing learned counsel for the parties at length, it appears from the communication by the SEBI dated August 21, 2009, to the petitioner no.1-Company that the grant of Provisional Registration Certificate under Regulation 71(1) of the SEBI (CIS) Regulations, 1999 was fettered with the rider that the petitioner no.1 shall not launch any new s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perception of the CBI regarding the petitioners involvement in the chit fund scam, the charges framed against the petitioners and the refusal of bail by a Division Bench of this Court, all point prima facie to the petitioner being involved in a financial scam, whether technically the petitioner no.1 is a chit fund or not. 16. A consideration of the Subrata Chattoraj case (supra) has certain salient features. In the said judgment, inasmuch as the State of West Bengal was concerned, the Supreme Court held specifically that investigation should be undertaken in similar cases and other companies , with reference to the Sarada Investment Company and its subsidiaries. 17. In fact, the Supreme Court repeatedly observed in Subrata Chattoraj (supra) that the role of the SEBI and other regulating authorities is itself suspect. Such observations clearly negate any advantage being lent by the SEBI grant of provisional registration to the petitioner, at least prima facie, which is sufficient to justify the CBI investigation to continue against the petitioner. 18. Inasmuch as the cited decision of Sanjib Banerjee, J. is concerned, the same did not decide the merits of the issue as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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