IN THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Appeal No. 182 of 2007
Date of decision : 3.1.2008
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Highway Users Centres (I) Limited
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…… Appellant
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Versus
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Securities and Exchange Board of India
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…… Respondent
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None present for the Appellant
Ms. Sejal Shah Advocate for the Respondent.
Coram : Justice N.K. Sodhi, Presiding Officer
Utpal Bhattacharya, Member
Per : Justice N.K. Sodhi, Presiding Officer (Oral)
Notice dated 14.12.2007 was sent to the appellant on the address mentioned by it in the memorandum of appeal informing it that the appeal would be taken up for hearing on 24.12.2007. The notice came back undelivered with the remarks of the postal authorities ‘left’. There is no other address on which the appellant could be served. We heard the appeal on 24.12.2007 and directed the respondent to produce the records. No one is present on behalf of the appellant and we are proceeding to dispose of the appeal on merits after perusing the records.
The primary question raised in the memorandum of appeal is that the scheme(s) run by the appellant are not in the nature of collective investment schemes and, therefore, such schemes need not comply with the provisions of Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999 (for short the Regulations) . It is not in dispute that the appellant provides emergency services such as break down assistance, towing accident relics and other services such as communication, rest facilities etc. by installing cabins on highways near Mumbai, Pune, Ahmedabad, Lucknow and other major cities. The appellant claims that the project [scheme(s)] run by it generate and provide employment to the locals. The Securities and Exchange Board of India (for short the Board) received several complaints from the investors of the appellant company complaining that the amounts due to them under the scheme(s) were not being paid. These complaints were forwarded to the appellant for redressal and necessary action. The appellant company wrote a letter dated February 4, 2002 to one of the complainants wherein it stated as under :
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“The Company’s experience to develop resorts in remote areas has led the Company to launch investment schemes which are now under the purview of SEBI (Collective Investment Schemes) Regulations, 1999. The Company has invested large amount received from these schemes in the real estate and liquidating these assets require some time. Further sluggishness in the real estate market also added fuel to fire.
Nonetheless the Company is continuing to repay investors gradually either in cash or by conversion of their investment in other non-collective investment schemes of your choice. For this purpose the Company has also designated senior officers to meet and resolve queries of the investors.”
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The aforesaid statement made by the appellant is a clear admission of the fact that it was running collective investment scheme(s). Admittedly, it has not redressed the grievances of its investors nor has it complied with the Regulations being an ‘existing collective investment scheme’. In this view of the matter, no fault can be found with the impugned order passed by the Board directing the appellant to wind up the scheme(s) in terms of the Regulations.
In the result, the appeal fails and the same is dismissed with no order as to the costs.
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Justice N.K. Sodhi
Presiding Officer
Sd/-
Utpal Bhattacharya Member
3.1.2008
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