SUDHIR S. MEHTA & ORS. v. CUSTODIAN & ANR.

A appellants did not think it proper either to challenge the same or to raise this argument of the individual liabilities viz. a viz., the group liabilities or the second argument that unless the denotification applications were decided upon, there should be no sale of shares. We have already pointed out the hollowness B of the argument regarding the denotification applications, which were claimed to be pending before the Special Court, which claim is also baseless. Therefore, on both these counts, there would be no question of finding fault with the impugned order of the Special Court.

C 47. This takes us to another contention raised more par- ticularly, in point number 2, 4 and 5. Apart from the fact that the contentions were never raised before the Special Court, it is pointed out that as in the earlier case of the sale of shares in 2005, the Disposal Committee which was formulated under the orders of the Special Court as also this Court, had found that it wa$ opportune time for the sale of Reliance Shares. The Cus- todian argues that the instant sale of Reliance Shares was be- ing carried out strictly in compliance with the procedure laid · down by the Special Court and this Court in the earlier referred judgments. It is pointed out by the Custodian that between 12.12.2000 to 1.11.2007, 12.12 crores shares valued at Rs.1792.77 crores were sold. Out of these, the shares worth Rs.1463.96 crores belonged to the various entities of Harshad Mehta Group including the appellants. The learned counsel very surprisingly did not refer to these facts during his arguments, instead, it was suggested that there was a loss of 6500 crores of rupees because of the sale. Such figure apart from being imaginary, has no basis. We cannot ignore that the Special Court is dealing with the scam which shook the whole financial world of India. We again cannot ignore the fact that the decision to sell the shares in 2005 was taken by the Disposal Committee, which consisted of the experts of the financial world who were well-experienced in the sale of shares and securities and who had a thorough study of the share markets. No ma la tides were ever alleged against the Disposal Committee. Under the cir-

---, SUDHIR S. MEHTA & ORS. v. CUSTODIAN 1147 & ANR. [V.S. SIRPURKAR, J.] • -; cumstances, we find no reason to accept the argument that the earlier sale caused huge loss and, therefore, the shares should not be sold. In our opinion, the Special Court was right in con- firming the advice and accepting the report filed before him on behalf of the Custodian justifying the sale of shares. However, all that exercise, we are afraid, would have to be repeated again, 8 ~- particularly, because more than six months have elapsed after ~ that decision and the sale has yet not taken place. The Special Court has referred back the matter and has passed the direc- tions for obtaining the legal and expert advice to deal with the taxes. We are told at the Bar that such exercise had already c been completed. It would, therefore, be proper for the Disposal Committee to again decide as to whether the shares should be sold at all and when. That would depend upon the market con- ditions and so many other factors which are certain to be con- + sidered by the Disposal Committee. The Custodian has re- D ferred all the happenings during the pendency of this appeal and has relied on the report dated 27.11.2007. We need not go into the question, since, it would be for the Disposal Com- mittee to decide upon the proper time and the manner in which .-. .~, the sale is to be executed, and it would be for the Special Court to further decide on the matter. E '

48. In view of what we have stated above, we are con- vinced that the appeals have no merits. However, one thing is certain that the sale, as well as thl decision to make the sale at a particular time, stand frustrated because of the lapse of time. F The whole procedure for sale of shares will have to be repeated now, meaning thereby, that the Disposal Committee would have to take a fresh decision in the light of the directions given by the Special Court, which are the correct directions. That shall be done at the opportune time. If the appellants so feel, they would G >- ~ be at liberty to put their objections subject to what has already been said in this judgment. The appeals are dismissed with the above obseNations under the circumstances. The cost is quan- tified at Rs.2 lakhs. S.K.S. Appeals dismissed. H