Ray of Madras HC hope for 9.51 lakh investors in failed firm

Chennai: In a major relief to 9.51 lakh investors allegedly cheated by Disc Assets Lead (India) Ltd to the tune of over Rs 761 crore, the Madras high court constituted a committee headed by Justice N. Paul Vasanthakumar, retired Chief Justice of the Jammu and Kashmir High Court, to identify the properties of the company and its sister concerns, and sell these to settle the claims of all investors/depositors.

The First bench comprising Chief Justice Indira Banerjee and Justice M.Sundar constituted the committee while passing further interim orders on a public interest litigation for settlement of dues of investors.

Directing the committee to give advertisements about its constitution in at least two English and two Tamil newspapers having wide circulation in the state, the bench also directed all depositors/investors of the company to apply to the committee with details of their investments, and documents in support of their claims within the time stipulated in the advertisement.

The claims shall be processed by the committee and the list of depositors and their respective claims finalised.  

The bench said that the committee shall take necessary steps to identify the properties of the company, its sister concerns, directors and transferees, location, marketability and title of the properties and proceed to sell these. The amounts realised from the sale shall be deposited in a special account opened for the purpose and jointly operated by any two members of the committee nominated by the chairperson. "In case the amounts realized are not sufficient to settle the claims of all depositors/investors in full, the latter shall be paid on pro rata basis in proportion with the amounts deposited by them in the company. The FIR shall be kept alive as prosecution may have to continue if the amounts realized are not sufficient to pay the amounts due to all depositors/investors," the bench added.

Stating that the committee shall function as an Administrator of the company, the bench restrained the company, its directors, its sister concerns from transferring or alienating any of their properties and assets, except through the committee. The bench listed the matter for further orders on December 4.

The bench appointed senior counsels B.Kumar and M.S.Krishnan who have been assisting the court as amicus curiae and also senior advocate and additional advocate general C.Manishankar to the committee. In addition, the committee shall include the competent authority under the TNPID Act,  two nominees of the Revenue, a nominee of the Additional Director General of Police, Economic Offences Wing, and a nominee of the Regional Director, the bench added.

The bench said that it will be open to the committee to engage chartered accountants, valuers, and lawyers and such other professional services as it might deem necessary.