$~ C1 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 7^th December, 2023 + CO.PET. 379/2009, CO.APPLs. 39/2023, 1007/2018, 262/2019, 489/2019, 813/2019, 40/2020, 160/2020, 161/2020, 240/2020, 241/2020, 282/2020, 283/2020, 294/2020, 330/2020, 430/2020, 431/2020, 449/2020, 653/2020, 660/2020, 26/2021, 732/2021, 737/2021, 33/2022, 420/2022, 351/2023, 546/2023, 736/2023, 797/2023, 866/2023 SECURITIES & EXCHANGE BOARD OF INDIA (TRUST PET. NO.3/1997) ..... Petitioner Through: Mr. Sujeet Gupta, Ms. Pious Shukla, Advs. (M. 6387229682)

Ms. Pinky Anand, Sr. Adv, Mr. Abhishek Baid, Mr. Praneet Das, & Ms. Asees Jasmine Kaur, Advs. for SEBI (M. 9999469777)

Mr. J Sai Deepak, Mr. Avneesh Garg, Mr. M. T. Reddy, Mr. R. Abhishek, Ms. Srika S. & Mr. Harsh Pal, Advs. (M: 8860518495)

Mr. Raj at Bhalla, Adv.

(M.9811661193)

versus CRB CAPITAL MARKETS LTD ..... Respondent Through: Mr. Nalin Kohli and Mr. Aman Leekha, Advs. for Special Committee.

(M: 9871455077)

Mr. Praveen Suri, Mr. Kartik Kumar & Mr. Shubham Jhunjhunwala, Advs.

for Applicant.

Mr. Bhuwan Gugnani, Adv.

CORAM:

JUSTICE PRATHIBA M. SINGH Prathiba M. Singh, J. (Oral)

1. This hearing has been done through hybrid mode.

2. The Petitioner – Securities & Exchange Board of India (hereinafter, Signature Not Verified Digitally Signed CO.PET. 379/2009 Page 1 of 14 ‘SEBI’) filed the present petition seeking certain directions against the Respondents in terms of SEBI (Mutual Funds) Regulations, 1996 (hereinafter, ‘1996 Regulations’). The background of the present petition is that in 1993, CRB Capital Markets Limited applied to SEBI to establish a mutual fund, named ‘CRB Mutual Fund’. To manage this fund, ‘CRB Asset Management Company Limited’ was incorporated. Additionally, a trust called ‘CRB Trustee Limited’ was formed vide Deed of Trust dated 15^th December 1993 under the 1996 Regulations.

3. Thereafter, the CRB Mutual Fund launched a close-ended scheme called ‘Arihant Mangal (Growth) Scheme’, which was open for subscription from 19^th August, 1994, to 5^th September, 1994. It is stated that around Rs.

229 crores were collected from around 19,396 investors.

4. In the meantime, the Reserve Bank of India (hereinafter, ‘RBI’) intervened. By exercising its powers under the RBI Act, 1934, and Sections 433&434 of the Companies Act, 1956, it filed a winding-up petition against CRB Capital Markets Limited. Vide order dated 22^nd May, 1997, a Provisional Liquidator was also appointed for CRB Capital Markets Ltd. to take charge of all properties and accounts of the said company.

5. It is stated that in order to protect the interests of investors in the Arihant Mangal Scheme, SEBI filed the present Trust Petition bearing Trust Petition No. 3/1997 titled ‘SEBI v. The CRB Capital Markets Ltd.’ before the Bombay High Court, under the provisions of the Indian Trusts Act, 1882 on 3^rd June, 1997, against CRB Capital Markets Ltd. and others, including CRB Trustee Limited and CRB Asset Management Company Ltd. The Bombay High Court appointed a Provisional Administrator vide order dated 3^rd June 1997 for the entities, CRB Trustee Ltd. and CRB Asset Signature Not Verified Digitally Signed CO.PET. 379/2009 Page 2 of 14 Management Company Ltd. The said Provisional Administrator hadtaken over the charge of all the assets of the mutual funds. One Mr. M.L. T Fernandes was appointed as the Provisional Administrator of CRB Trustee Ltd. and CRB Asset Management Company Ltd. till his demised in 2012.

6. Vide order dated 25^th January, 1999, passed by the Bombay High Court in Chamber Summons No. 796 of 1998 in Trust Petition No.3 of 1997, the Provisional Administrator was permitted to repay the small investors up to 300 units to those holding up to 10,000 units, in terms of the responses received by him till 31^st May 1998. In terms of the Scheme for repayment, individuals connected with Mr. C.R. Bhansali and his group of companies were excluded from this repayment scheme. Thereafter, on 13^th August, 2007, the Supreme Court transferred the