The court held that Rommel failed to prove ownership of the shares sold and did not substantiate claims regarding financial agreements with the mutual fund, resulting in the Court directing the release of assets to the Special Committee.

JUDGMENT

Jayant Nath, J.

CA No.1132/2017

1. This application is filed by the Special Committee constituted by order of this court dated 29.5.2013 for appropriate directions to the National Stock Exchange of India Limited (hereinafter referred to as to the `NSEIL') for release of 1,00,000 shares of Reliance Industries Limited including all corporate benefits thereon together with Rs.43.75 lacs on account of Fixed Deposit standing with NSEIL.

2. It is submitted in the application that in 1993, CRB Capital Markets Limited had applied to SEBI to set up a mutual fund known as CRB Mutual Fund. As per rules, CRB Asset Management Company Limited was incorporated to manage and supervise various operations of CRB Mutual Fund. In terms of Regulations a Trust called CRB Trustee Limited was also constituted. Thereafter the said company CRB Capital Markets Limited was authorised by SEBI to set up and establish the mutual fund known as CRB Mutual Fund. The said CRB Mutual Fund floated a close ended scheme known as Arihant Mangal (Growth) Scheme. The scheme opened for subscription on 19.8.1994 and closed on 5.9.1994. The scheme collected Rs.299.28 crores and was subscribed by 19,396 investors.

3. RBI subsequently in exercise of its powers under the RBI Act, 1934 read with section 433/434 of the Companies Act, 1956 instituted a winding up petition against CRB Capitals Markets Limited. This Court appointed a Provisional Liquidator who was directed to take into custody all the properties, books of accounts etc.

4. To safeguard the interest of the investors of Arihant Mangal Scheme SEBI instituted a Trust Petition on 3.6.1997 against CRB Capital Markets Ltd. and others including CRB Trustee Limited and CRB Asset Management Company Ltd before the Bombay High Court. This petition was numbered as Trust Petition No. 3/1997. Bombay High Court was pleased to appoint a Provisional Administrator for CRB Trustee Limited and CRB Asset Management Company Limited vide order dated 3.6.1997. The Supreme Court vide its order dated 13.08.2007 transferred the said petition to this Court which was renumbered as the present company petition i.e. CP 379/2009. On 29.5.2013 this court by a consent order constituted a Special Committee to carry out functions of the Trustee and to proceed to wind up the Scheme in terms of the Regulations 41 and 42 of the Security Exchange Board of India (Mutual Funds) Regulations 1996. As per the said order of this court dated 29.05.2013, the Committee was directed to dispose of the assets of the scheme at the best available market price. The present application has been filed by the Committee in exercise of the powers entrusted to it by the said order of this court.

5. It is further pleaded that the Special Committee got knowledge about the issue which is raised in the present application on coming to know about pendency of a Civil Suit being No.2158/2008 filed by one Rommel Investment Private Limited which was pending adjudication before this court. It is stated that after going through the suit and the sketchy and incomplete record received, the background facts came to light. As per the facts which have come to the knowledge of the committee the said CRB Mutual Funds had purchased shares of two different Reliance Companies. On account of a merger that took place of the two companies with Reliance Industries Limited the said CRB Trustee Limited a/c CRB Mutual Fund were allotted shares of Reliance Industries Limited. It is stated that in June 1996