HIGHWAY USERS CENTRES I LTD Vs. STATE
SECURITIES APPELLATE TRIBUNAL
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(1.) M/s Highway Users Centres (I) Limited (herein after referred to as the company") mobilised funds from the investors/public under the collective investment schemes being operated by it. Despite the same, the company had neither filed any information with the Securities and Exchange Board of India (hereinafter referred to as SEBI) nor did they apply for registration under the SEBI (Collective Investment Schemes) Regulations, 1999 (hereinafter referred to as the Regulations) for carrying on a collective investment scheme.
(2.) Furthermore, investor complaints were received by SEBI against the company regarding the company operating collective investment schemes and mobilising funds from the investors under the same as well as the non repayment of their invested money and the assured returns. It is noted from a letter dated February 4, 2002 addressed by the company to an investor that the company had informed the investor that the schemes launched by it are now under the purview of the regulations. An information memorandum, allegedly in terms of the Regulations, was also sent to the investors, in those schemes to wind up under the pretext of the Regulations.
Hence a notice dated July 18, 2002, was issued to the company asking the company to show cause as to why the action mentioned therein should not be initiated against the company and the promoters/directors/persons in charge of the scheme(s) in terms of the provisions of the SEBI Act, 1992 (hereinafter referred to as "the Act") and the regulations made thereunder. The company vide its reply dated August 30, 2002 inter-alia contended that as it was not operating any collective investment scheme, it was not required to file any information with SEBI and that the provisions of the Regulations are not applicable to it. It was further contended that no money had been mobilized from the investors or the public under the collective investment schemes. The company further requested that they may be afforded an opportunity of personal hearing in the matter before any action was taken on the show cause notice dated July 18, 2002.
(3.) HENCE, the company was granted personal hearings. First of such personal hearings took place on November 30, 2002 before me. However as the company requested for an adjournment, the date of the hearing was scheduled for December 28, 2002. However, the company, vide its fax dated December 27, 2002 once again requested for an adjournment. Accordingly the hearing was fixed for February 12, 2002. During the course of the said hearing, Shri Burzin Somandy, Advocate appearing on behalf of the company reiterated the submissions made by the company earlier and inter-alia contended that the company had never mobilized money from the public either under a collective investment scheme or through an initial public offer. Shri Somandy further requested that the company be provided with inspection and copies of all the documents on the basis of which the show cause notice dated July 18, 2002 was issued to it. Accordingly permission was granted to the company to do the same. Thereafter Shri Surendra Khandhar, Director and Ms N.S. Bharati, Advocate visited the SEBI Office on February 14, 2002 and perused the said documents. Copies of investor complaints received by SEBI against the company and forwarded to the company earlier, were also sent by SEBI once again to the company. However, although M/s Vinod Mistry & Co, Advocates for the company, vide their letter dated February 21, 2003, confirmed, the perusal of the documents, till date, they have not send any further communication in this regard.;
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