ex CJI RM Lodha
ex CJI RM Lodha
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Supreme Court entrusts RM Lodha J. to oversee refund of money by PACL

Murali Krishnan

Former Chief Justice of India, RM Lodha’s hectic retired life will continue. After the BCCI and “cleaning up cricket”, Lodha J. has now been entrusted by the Supreme Court with the task of overseeing the refund of money by PACL Limited to its investors.

A Division Bench of Justice Anil R Dave and Justice AK Goel appointed Lodha J. to head a committe that will oversee the refunds to investors. The Court has also debarred PACL from accepting any deposits from the public.

Arvind Datar appeared for SEBI Today
Arvind Datar appeared for SEBI Today

Senior Advocate Arvind Datar appeared for the SEBI today while Senior Advocates Anil Divan, Kapil Sibal and Aryama Sundaram appeared for PACL Group Companies.

Advocates Vipin Nair, PB Suresh and Prithu Garg appeared for the PACL Customers and Employees Association.

The PACL Ponzi scam has been likened to the SEBI Sahara dispute and has even been called “Sahara 2” by the Bench.

By way of background, the Pearls group of companies that include PACL Limited and P.G.F. Limited, had launched a scheme by the name of Collective Investment Schemes (CIS) and managed to collect above Rs. 45,000 crores from roughly 6 crore investors.

Unsurprisingly a number of complaints of fraud and serious irregularities were filed by various investors in Haryana, Punjab, Maharashtra, New Delhi etc., pursuant to which statutory authorities including SEBI had initiated investigations into the Pearl companies.

Aryama Sundaram appeared for the PACL group

The Supreme Court, in 2013, directed that the SEBI shall pass fresh orders as regards the business activity of PACL as to whether it falls under the category of CIS or not and, depending upon the ultimate order to be passed, it shall proceed further in accordance with law.

Subsequently, orders were passed by SEBI against PACL and PGF to stop their schemes and refund all the money collected.

Last year, a group of employees of PACL Ltd had impleaded themselves in the petition seeking a direction to be issued to SEBI to initiate proceedings against PACL Limited in respect of almost 500 crores which had allegedly been swindled.

The Court after hearing the parties at length today passed the direction debarring PACL from collecting any further deposits.  It has also directed that title deeds of various lands belonging to PACL be handed over by the CBI to SEBI, so that the market regulator can sell the land and use the proceeds to refund the money to the investors. The Court has also directed that no court shall interfere with the sale.

The case will now be taken up for hearing on August 2.

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