December 14, 2015
PR No. 288/2015

SEBI attaches assets of M/s PACL Ltd.

SEBI has initiated recovery proceedings on December 11, 2015 against (1) M/s PACL Ltd. and its Promoters/Directors, viz., (2) Mr Tarlochan Singh (3) Mr Sukhdev Singh (4) Mr Gurmeet Singh (5) Mr Subrata Bhattacharya(6) Mr Nirmal Singh Bhangoo (7) Mr TygerJoginder (8) Mr Gurnam Singh (9) Mr Anand Gurwant Singh (10) Mr Uppal Devinder Kumar("Defaulters") for their failure to refund an amount of Rs. 49,100 Crores (Rupees Forty Nine Thousands One Hundred Crores) with return due to investors, along with further interest and all costs, charges and expenses incurred in the recovery proceedings. The recovery proceedings have been initiated for their failure to comply with the directions of SEBI vide order dated August 22, 2014 wherein SEBI had directed the defaulters to wind up the schemes, and refund money to the investors within a period of three months from the date of the order.
 
In the said recovery proceedings SEBI has attached all bank and demat accounts and Mutual Funds folios of the aforesaid Defaulters with immediate effect and communicated the same to all the banks, depositories and mutual fund houses. The recovery notices were also sent to the aforesaid Defaulters. All the banks / financial institutions / depositories or any other persons holding assets of the defaulters have been advised not to part with the same and report the same to the Recovery Officer, at SEBI's Northern Regional Office, New Delhi.
 
The mobilisation of funds by M/s PACL Ltd. traces back prior to 1997. Upon receipt of a complaint, SEBI issued letters dated November 30, 1999 and December 10, 1999 to PACL inter alia advising it to comply with the provisions of the CIS Regulations. PACL challenged these letters before the Hon'ble High Court of Rajasthan in December 1999, claiming inter alia therein that its scheme does not fall under the definition of CIS as defined under the CIS Regulation/ SEBI Act. PACL also challenged the constitutional validity of the CIS Regulations.
 
The Hon'ble High Court of Rajasthan vide its order dated November 28, 2003, held that PACL's schemes were not CIS as defined under Section 11AA of the SEBI Act and quashed SEBI's letters dated November 30, 1999 and December 10, 1999, issued to PACL.
 
SEBI preferred an appeal before the Hon'ble Supreme Court of India against the order of Hon'ble High Court of Rajasthan. Hon'ble Supreme Court vide its order dated February 26, 2013 while allowing the appeal upheld the constitutional validity of CIS Regulations, and directed SEBI to investigate the matter and take appropriate actions.
 
After conducting inquiry, SEBI passed the order dated August 22, 2014, wherein, inter-alia, PACL Limited, its promoters and directors were directed to wind up all the existing Collective Investment Schemes of PACL Limited and refund the monies collected by the said company under its schemes with returns which are due to its investors as per the terms of offer within a period of three months from the date of the said Order.
 
The appeal filed by the Defaulters before the Hon'ble Securities Appellate Tribunal (SAT) against the said order dated August 22, 2014 was dismissed on August 12, 2015 directing the Defaulters to refund the money within a period of three months. Since the defaulters failed to refund the money to the investors as per the directions of SEBI and SAT, SEBI has initiated the recovery proceedings.

Mumbai
 
December 14, 2015

For full copy of order against PACL LTD., MR.TARLOCHAN SINGH, MR.SUKHDEV SINGH, GURMEET SINGH, MR.SUBRATA BHATTACHARYA, MR.NIRMAL SINGH BHANGOO, MR.TYGER JOGINDER, MR.GURNAM SINGH, MR.ANAND GURWANT SINGH AND MR.UPPAL DEVINDER KUMAR click here.