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The Securities Appellate Tribunal has deferred the hearing in the case for recovery of ₹49,100 crore from PACL. The case was initiated by securities market regulator SEBI on January 29.
An appeal by one of the promoters Nirmal Singh Bhangoo was heard on Friday and a single member bench decided to defer the hearing.
SEBI had initiated recovery proceedings against 10 entities — PACL and its promoters/directors — for not returning ₹49,100 crore to investors.
The amount includes interest, costs and charges incurred in the recovery proceedings.
The SEBI action came three months after the SAT dismissed the appeal filed by PACL and its promoters/ directors against the SEBI order of August 22, 2014, directing them to wind up their collective investment scheme (CIS) and refund the monies to investors.
SEBI said it had sent the recovery notices to the defaulters who in turn filed a writ petition before the Delhi High Court against the recovery proceedings.
Fund mobilisationSEBI observed that PACL had been mobilising funds prior to 1997.
On receiving a compliant, SEBI wrote two letters in November and December 1999 to PACL asking it to comply with the provisions of the CIS Regulations.
PACL challenged these letters before the Rajasthan High Court in December 1999, claiming that its scheme did not fall under the definition of CIS. It also challenged the constitutional validity of the CIS Regulations.
Apex court overrulesThe Rajasthan High Court in its order dated November 28, 2003, held that PACL’s schemes were not CIS as defined by the SEBI Act and quashed both the SEBI letters of 1999.
The matter then went to the Supreme Court.
The Supreme Court vide its order dated February 26, 2013, while allowing the appeal, upheld the constitutional validity of CIS Regulations. It directed SEBI to investigate the matter and take appropriate action.
After inquiry, SEBI on August 22, 2014, ordered PACL and its promoters/ directors to wind up all existing CIS and refund the monies collected to investors within a period of three months.
PACL then approached SAT which dismissed their appeal on August 12, 2015, and gave them three months to refund ₹49,100 crore.
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