- (1.) These appeals are by way of a challenge to the order dated 02.11.2007 passed by the Special Court of Bombay constituted under the Special Court (Trial of Offences Relating to Transactions in Securities) Act (hereinafter referred to as 'the Act'). By the impugned common order, Miscellaneous applications filed by Mr. Sudhir S. Mehta, Ms. Deepika A. Mehta, Mr. Ashwin B. Mehta, Gromore Research Assets Management Ltd., Ms. Jyoti S. Mehta and Mr. Hitesh S. Mehta, as also Ms. Pratima Mehta were disposed of by the learned single Judge. In that order, the Special Court directed the Custodian under the Act to refer two questions for the opinion of Disposal Committee. They were : (i) What would be the appropriate time to be given to the bidders for submitting bids after publication of the notice inviting bids (ii) Whether it will be admissible to break up the shares into appropriate groups and to give options to the bidders to bid either for whole lot or for a limited number of groups The Custodian was further directed to take legal and professional opinion in relation to the liability to pay Capital Gains Tax. The learned Judge further directed that if the notified parties wanted to make any submission on the above questions, the same may be submitted to the Custodian within the period of 4 days and such submissions would be transmitted by the Custodian to the Disposal Committee for its consideration, and after the opinion of the Disposal Committee is given, the Custodian shall take steps in accordance with the said opinion, as also in accordance with the legal and professional advice. The learned Judge further directed that the Custodian would be free to approach the Court and seek appropriate orders. With these directions, the learned Judge disposed of the report of the Custodian, as also the applications made by the parties. All the applicants are the family members of late Sh. Harshad S. Mehta, while respondent No. 1 herein, is the Custodian appointed under Section 3(1) of the Act. The respondent No. 2 is the Disposal Committee in all the appeals, which are filed under Section 10 of the Act. Each of the individual appellant is in close relation with late Sh. Harshad S. Mehta and have filed 6 appeals, while Gromore Research Assets Management Ltd. have filed 2 appeals. The questions are common and the learned counsel also apprised us treating all the questions involved, to be common. Hence, the appeals are being disposed of by this common Judgment.
(2.) All the common questions have arisen on account of the advertisements issued by the Custodian dated 28.10.2007 for the sale of the shares of Reliance Industries Ltd. As many as 24, 26, 376/- shares belonging to the individual appellants and 1, 75, 316 shares belonging to Fairgrowth Financial Services Ltd. and 5,300/- shares belonging to Mr. N.K. Aggarwal were covered by these advertisements. It was stated in the advertisements that these shares would be sold in bulk categories and the offers were to be submitted on or before 1.11.2007. Accordingly, the offers were received by the Custodian and the same were considered by the Disposal Committee, and the Custodian submitted his report for sale of the shares in favour of the Life Insurance Corporation of India (LIC of India), as the LIC of India had offered the highest price at the rate of Rs.2,701/- per share.
(3.) At this stage, the objections were raised by way of the Miscellaneous Applications before the Special Court at the instance of the appellants herein. The common grievances made in these objections cum applications were: (i) that the time given in the advertisements for making offers was too short for the intended investors considering the huge number of shares and the prevailing market price of the shares. (ii) that the shares could fetch more price if the Custodian had divided the shares into appropriate groups and given the option to the offerers to make offer for the whole lot or one or more groups. (iii) that in fact, this was not an appropriate time to sell the shares considering the prevailing market conditions. (iv) that if the shares were to be sold privately as wag being done, the Capital gains tax would be required to be paid and, therefore, the shares should have been sold at the stock exchange.;