INDIAN BANK MUTUAL FUND Vs. SEBI

JUDGEMENT

(1.) BY this Writ Petition, the petitioners-Indian Bank Mutual Fund and Indian Bank have challenged the Order dated 30th November, 1999 passed by Chairman, Securities and Exchange Control Board of india (hereinafter referred to as SEBI, for short) and the Order dated 18th February, 2000 passed by the Central Government. By the impugned Orders, the petitioners have been directed to pay dividend for the Financial Year 1996-97 to respondent no. 2-Asian Institute of transport Department (hereinafter referred to as AITD, for short ).

(2.) AITD is an NGO which had applied and was issued Units under the Ind-Jyoti Scheme, 1990 (Plan A) (hereinafter referred as the said scheme, for short) promoted and floated by the petitioners. It is admitted by the petitioners that as per Plan A the Unit holders were assured of minimum return as per the offer document. The minimum assured return was as under:- <FRM>JUDGEMENT_331_ILRDLH19_2009Html1.htm</FRM>

(3.) RESPONDENT no. 2-AITD was paid minimum assured return dividend upto the Financial Year ending 31st March, 1996. Thereafter, the petitioners did not pay the minimum assured return for the Year ending 31st March, 1997. This was probably on account of the fact that the petitioners did not have sufficient capital balance and income to pay the assured return as is apparent from the letter dated 9th june, 1999 written by the petitioners to SEBI.