No grounds to modify order on appointing panel to settle investors' dues: Madras HC

The Madras High Court has said it finds no ground to modify its order appointing a committee to settle dues of over 12 lakh depositors who had put more than Rs 1,137 crore with Tamil Nadu Disc Assets Lead India Limited for purchase of plots over 11 years ago.

The court vacated the "limited stay" granted by a vacation bench on an application from the firm praying for staying the operation of a letter from the committee seeking documents of immovable properties from the company.

It termed as "inappropriate" the company's action in moving such an application when the court had by an earlier order directed that the committee would take steps to identify the firm's properties and further proceed to sell them.

The court had also directed the company directors to submit all related documents to the panel, it said.

A company director Uma Shanker had filed an

application before the vacation bench seeking a stay on the operation of a letter dated December 21, 2017 issued by the committee calling for the original documents of immovable properties of the company.

The vacation bench passed a limited order of staying the letter issued by the committee.

When the matter came up for hearing recently, the first bench comprising Chief Justice Indira Banerjee and Justice Abdul Quddhose said if any of the parties were aggrieved by any directions passed by the court, the remedy was in approaching the Supreme Court by way of appeal or special leave petition.

The "limited stay" hereby stands vacated, it said.

"The respondents are bound to comply with the directions of the committee, which have in effect, been issued pursuant to the orders of this court," the court said.

The bench said it finds no ground at all either to modify its order appointing the committee or to stay the directions given by the committee.

It rejected the arguments of the counsel for the company directors that the high court had no jurisdiction and that provisions of the Tamil Nadu Protection of Depositors (Financial Establishments) (TNPID) Act 1997 should take its course.

"The orders of this court have been passed taking into account the submissions that there was an enactment in place and we do not find any conflict between our order and the TNPID Act," the court said.

On the arguments that as FIR was already filed under TNPID Act, the charge sheet should be issued under the said Act, the bench said "The FIR has been kept alive."

It clarified that TNPID Authorities may arrest the directors, if they deem it appropriate to do so and criminal proceedings may take their own course against the company and its erstwhile directors, notwithstanding the court orders.

The court had in October last year appointed retired Jammu and Kashmir High Court Chief Justice N Paul Vasanthakumar as the head of the nine-member committee.

It had then said it shall function as the administrator of the company, facing action by the SEBI for some violation.

The company had in 2006 floated schemes for purchase, development and maintenance of agricultural land by way of instalment payment and cash down plans.

A total of over 12 lakh customers had invested more than Rs 1,137  crore in the schemes, but they were neither alloted the plots nor refunded the deposit money.