Latest as on June 26 2013 -- SAROVER NIGAM BOND CASE HEARING

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The issue is sub-judice before Hon’ble Supreme Court and  it is for Hon’ble Supreme Court to decide the correct redemption date in the matter considering all the facts. The brief of the matter are as following:  .



1.   In the captioned matter, some of the DDB holders filed Writ Petitions before Gujarat High Court and Bombay High Court inter-alia challenging the constitutional validity  of the Sardar Sarovar Narmada Nigam Limited (Conferment of Power to Redeem Bonds) Act, 2008, whereby  SSNNL DDB's were prematurely redeemed.



2.   In response, State of Gujarat filed the Transfer Petition No. 1-2 of 2009, before the Hon’ble Supreme Court to transfer the W.P. No. 2812 and 2869 of 2008, pending before the Bombay High Court to Gujarat High Court, respectively.



3.   The Transfer Petition was taken up on January 12, 2009, by the Hon’ble Supreme Court. After hearing the argument at some length, the Hon’ble court was pleased to issue the notice in the matter and suspended the proceeding of the petitions pending before Gujarat and Bombay High Court.



4.   SEBI also filed Transfer Petition No. 193-202 of 2009-SEBI Vs. State of Gujarat, praying Hon’ble Court to transfer petitions pending before Gujarat and Mumbai High Court or any other proceeding before any other court related to the matter to the Hon’ble Supreme Court.



5.   SEBI informed the Hon'ble Supreme Court in its Transfer Petition that the premature redemption of DDBs at Rs. 50,000/- each on 10.01.09 completely ignores the fact that the DDBS were listed on ten stock exchanges and were traded at a price higher than the redemption price prior to the enactment of the impugned Act. These bondholders who purchased DDBs in the secondary market will suffer capital loss as well as loss of interest for the holding period.



6.   Further, SEBI stated that the Company in its prospectus dated 29.09.1993 had promised the payments of Rs.1,11,000/- at the end  of the maturity period of 20 years on the discounted Bonds of Rs. 3,600/- which was duly guaranteed by the Government of Gujarat.  The Government of Gujarat and the Company, are thus estopped on the principle of promissory estoppel from seeking to resile from the contractual obligations under the DDBs as also under the guarantee by the Government of Gujarat.



7.   SEBI also stated in its transfer petition that the  basic challenge  to the impugned Act is on account of lack of legislative competence of Gujarat Legislature to legislate the enactment on a subject matter which is in the teeth of Central Legislations like The Companies Act,1956, Securities and Exchange Board of India Act, 1992, Securities Contracts (Regulation) Act, 1956, Contract Act, 1872 and the Negotiable Instruments Act, 1881 and specifically to avoid the statutory  mandatory compliances under such Acts which are not permissible in law enacted by a State  as the same is ultra vires the provisions of the aforesaid Central Legislations.  The impugned Act deals with matters which are provided under the  laws made by the Parliament and thus amounts to usurping the  legislative functions of the Parliament by the State Legislature .



8.   The Transfer Petition was allowed by the Hon'ble Supreme Court vide order dated September 17, 2010. After the transfer Petitions were allowed, the Cases get transferred from the respective High Courts to Hon'ble Supreme Court. The matter is now pending in Supreme Court as T.C. (Civil) No. 25 of 2011- Maharashtra State Electricity Board Cont. P.F. Vs. Sardar Sarover Narmda Nigam Ltd & Ors.



9.   SEBI advocate vide e-mail dated April 2, 2013 has informed that the copies of all the W.P.'s pending in various High Court has been filed before the Hon'ble Supreme Court on 12.02.2013 & 14.02.2013.



10.       The matter was listed before the Learned Registrar on 08.03.2013 and Learned Registrar of Hon'ble Supreme Court has given direction to the concerned High Court to  forward the report on status of certificate of service with respect of the respondent, on priority basis.



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