The court interpreted the offer document in favor of the investors and considered the understanding of the majority of investors in reaching its decision.

Manmohan, J.

1. This appeal arises out of judgment and order dated 13.07.2006 passed by the learned Single Judge in Writ Petition (Civil) No. 7463/2000 titled as "Indian Bank Mutual Fund and Ors. v. SEBI", whereby the learned Single Judge held that though the offer document floated by the Respondent Fund was capable of two constructions, namely, either offering indicative returns or minimum assured returns, but as no investor was misled, the circumstances did not warrant issuance of any direction to the Respondent to treat the expression "minimum indicative return" as a minimum assured return and not an "indicative return".

.2. The brief facts of the case are as follows:

.(a) Respondent No. 2, Indian Bank which is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970, created Respondent No. 1, by way of a Trust and Respondent No. 1 as the Principal trustee by virtue of a Trust Deed dated 17th November, 1989.

.(b) In 1990, the Respondent No. 1 issued an offer document under the "INDJYOTHI" scheme whereby it offered Plan-A and Plan-B to the investors. Under both these plans, the investors were offered minimum assured returns. The language used in the said offer document is reproduced herein below for ready reference:

PLAN A

Assured minimum return at the following rates is payable annually to the investors-

PLAN B

Investors can opt for cumulative units, wherein the value of units will appreciate in tune with the minimum assured returns or at higher returns that may be declared.

.(c) On 27.06.1991, Respondent No.1 sought permission of the Reserve Bank of India to launch a new scheme under the name "Ind Prakash" (hereinafter referred to as the Scheme). As originally conceived, this Scheme also offered an assured return to the investors, but the Reserve Bank of India did not give its consent. In fact, the Reserve Bank of India vide its letter dated 19th July, 1991 advised Respondent No. 2 that the Scheme should not indicate specified guaranteed returns but only an approximate minimum yield should be mentioned. The Reserve Bank of India asked Respondent No. 1 to accordingly amend its advertisements and prospectus.

.(d) Pursuant to this direction, the Respondent No. 1 used the term "Indicative Minimum Return" in its offer document which was thereafter approved by Reserve Bank of India vide its letter dated 1st January, 1992. The relevant portion of the offer document is reproduced hereinbelow for ready reference:

3.THE SCHEME AND ITS OBJECTIVES

Indian Bank Mutual Fund has formulated "Annual Income and Growth Scheme, 1992" under which IND PRAKASH units are being issued by this offer.

The terms and conditions of this scheme are governed by Indian Bank Mutual Fund Scheme known as "Annual Income and Growth Scheme 1992 - IND PRAKASH" (approved by Reserve Bank of India vide their letter DBOD No. FSC.222/C-469-91/92 dated 1st January, 1992). All the expressions used in this Offer Document shall have accordingly the same meaning assigned to them respectively under the said scheme.

The objective of the scheme is to generate and distribute a reasonable annual return to the investors and also to attempt generation of capital appreciation by investing in Non-convertible/Convertible debentures, Equities, Other Equity related Investments and Money Market Instruments. Keeping in view the nature of the underlying investments, investment in IND PRAKAH is subjected to market risk. While past performance is not necessarily indicative of future results, owing to the diversification of investments across industries and instruments, it has been possible to minimize such risks and generate reasonable Income and capital appreciation-

7. RETURN ON INVESTMENT

This scheme is offered with two options viz. Plan "A" and Plan "B".

Plan "A"

INDICATIVE RETURN at the following rates is payable annual to the investors-..

Plan "B"

Investors can also opt for cumulative returns, wherein the value of units wil