BALASAHEB KESHAWRAO BHAPKAR & ORS. versus SECURITIES AND EXCHANGE BOARD OF INDIA & ORS.

BALASAHEB KESHAWRAO BHAPKAR & ORS. versus SECURITIES AND EXCHANGE BOARD OF INDIA & ORS.

In view of exceptional and peculiar circumstances (long incarceration of petitioners, prolonged non-refund to investors, SEBI's practical difficulties in timebound country-wide auctions and uncertainty of criminal trials), the Court invoked Article 142 to constitute a High-Powered Sale Committee chaired by a former Supreme Court judge with specified membership, powers (including all powers of a Civil Court), duties and procedures to identify, secure, value and auction the companies' immovable assets, to deposit sale proceeds in a dedicated account and effect refunds to investors; the Court also prescribed procedures for valuation, e-auction, record custody, state cooperation, remuneration...

Parties
Petitioners: Balasaheb Keshawrao Bhapkar & Ors.; Respondents: Securities and Exchange Board of India & Ors.
Jurisdiction
India
Judgment Date
15 July 2024
Procedural Posture
Writ Petition (criminal) No. 546 of 2023 Under Article 32 / Order Disposing Petition (directions Issued)
Outcome
Writ petition disposed by issuing directions under Article 142; HPSC constituted and measures prescribed to auction assets and refund investors; interim bail granted to Petitioners Nos.1 and 2
Legal Topics
Article 142 Relief, High Powered Sale Committee, Auction of Assets, Investor Refund Procedure, Interim Bail
Constitutional Law Securities Regulation Company Law Criminal Law Property Law Article 142 Relief High Powered Sale Committee Auction of Assets +2 more

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Parties

Balasaheb Keshawrao Bhapkar & Ors.

Petitioners

Securities and Exchange Board of India & Ors.

Respondents

Procedural Posture

Writ Petition (criminal) No. 546 of 2023 Under Article 32 / Order Disposing Petition (directions Issued)

Legal Issues

  1. 1 Whether Article 142 could be invoked to constitute a High-Powered Sale Committee to auction immovable assets of the companies to satisfy investors' claims and liquidate statutory liabilities
  2. 2 What powers and procedural steps the constituted committee should have to identify, value, and auction properties spread across States and to effect refunds to investors
  3. 3 Whether interim bail should be granted to Petitioners in view of the auction and refund process

Ratio Decidendi

In view of exceptional and peculiar circumstances (long incarceration of petitioners, prolonged non-refund to investors, SEBI's practical difficulties in timebound country-wide auctions and uncertainty of criminal trials), the Court invoked Article 142 to constitute a High-Powered Sale Committee chaired by a former Supreme Court judge with specified membership, powers (including all powers of a Civil Court), duties and procedures to identify, secure, value and auction the companies' immovable assets, to deposit sale proceeds in a dedicated account and effect refunds to investors; the Court also prescribed procedures for valuation, e-auction, record custody, state cooperation, remuneration...

Court Disposition

Writ petition disposed by issuing directions under Article 142; HPSC constituted and measures prescribed to auction assets and refund investors; interim bail granted to Petitioners Nos.1 and 2

Orders

  • Constitution of High-Powered Sale Committee (HPSC) chaired by Hon'ble Mr. Justice S. Ravindra Bhatt, Former Judge, Supreme Court of India, with specified members including Dr. Justice Satish Chandra, a SEBI nominee, State revenue officers, Member Secretary Pardeep Kumar Sharma (Retd.), Registrar, and Secretary from...
  • HPSC directed to obtain all property documents/title deeds from SEBI/EOW/MPID Court and Sub-Registrars, create a database, digitise and uniquely number documents, and ensure properties are shown entrusted/encumbered in its favour in State land records