SC orders refund of 70% of principal amount to Golden Forests'' investors

Satya Prakash

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Tribune News Service

New Delhi, August 12

In a relief to lakhs of investors of Golden Forests (India) Ltd, the Supreme Court has ordered refund of 70% of the principal amount they invested in the ill-fated company which went bust in the 1990s.

Ordering the refund process to be completed in three months, a bench headed by Justice Arun Mishra noted that an amount of Rs 700 crore was available for disbursement to the investors. Plus, Rs 100 crore had also been attached by the Income Tax Department, it added.

In its order dated July 30, the bench said claims for refund of Rs 900 crore had been received for refund of principal amount invested in the company.

“…first, we take care of the principal amount to be distributed amongst the investors. Amount of payment of interest/maturity value as assured shall be considered later after property is sold, said the bench.

“In the circumstances, we direct that 70% of the principal amount be distributed out of the amount of Rupees seven hundred crores to each of the investors; whose claims have been received by the Committee,” it said.

It appointed M/s Karvey Investors Services Limited; whose services may be availed by the court-appointed committee for disbursement of the 70% of the principal amount which was invested by each of the investors.

The disbursement order came after investors’ counsel Narender Hooda submitted that huge amount of money was lying in deposit with the court-appointed committee and it was needed to be distributed to the investors.

What the top court said

— Refund to be completed in 3 months with help of M/s Karvey Investors Services Ltd

— Refund of assured maturity amount to be considered later

— Rs 700 crore available for refund against Rs 900 crore principal amount invested

— SC also sets up a three-member panel of senior IT Department officials

— Panel will do valuation of property to be sold for further refund to investors

The bench also appointed a three-member team comprising Principal Chief Commissioner of Income Tax (Delhi) SS Rathore, Principal Chief Commissioner of Income Tax-4 (Delhi) Sanjay Mishra and Commissioner of Income Tax (OSD, Delhi) Anup Kumar Dubey to do valuation in two months of the property sought to be disposed of for refund of money to the duped investors.

The order came after it was pointed out to the top court that its May 9 order inviting further fresh bids for auction of land was done without proper valuation being done.

“The valuation made in the year 1998 or by Hawk Group cannot be relied upon for making auction of the property as the value of the property has gone very high since then,” the bench noted.

“...we are of the considered opinion that it is absolutely necessary to obtain the current valuation of the property which may be sold and only thereafter to proceed further with the sale of property,” it said.

For identifying the particular property, the bench ordered that “Collector shall nominate the Revenue Officer of the rank of Sub-Divisional Officer or Tehsildar, of the district concerned and the valuation report shall be submitted to this court”.

It also directed that the rate prescribed by the Collector for the property be furnished along with the report in two months.

Taking into account the objections raised by governments of Punjab and Uttarakhand against surplus land being included in the auction notice, the bench said, “That the land that has been declared surplus and has vested in the state cannot be sold and consequently put to auction…We will take a final call upon this aspect at a later stage.”

The bench decided not to proceed further with the auction notice published following its May 9 order and made it clear that, “The property can be auctioned only after fixing minimum price.”

It will further take up the matter on August 16.

The Chandigarh-based company – which was in creating social forestry and developing agricultural land had attracted lakhs of innocent investors but it went bust in late 1990s leaving them in lurch. The company has huge land assets which is now being sold to refund its investors.