The Calcutta High Court today dismissed a petition by the Rose Valley Real Estates and Construction Limited seeking to declare certain sections of the SEBI Act on collective investment schemes as unconstitutional.
The court also imposed a fine of Rs 10 lakh on the company for filing such a petition.
Delivering the verdict, a Single Bench of Justice Dipankar Dutta said the company would deposit Rs 5 lakh of the fine money to the Legal Aid Service of the High Court and rest to the state legal aid services.
Justice Dutta added that the SEBI Act was introduced in the interest of the general people and to protect the interest of the investors, and that there were no illegalities in the Act.
After the verdict, Chairman, Rose Valley Group, Gautam Kundu said the company will approach the Division Bench of the High Court in a few days and challenge the Single Bench’s
Rose Valley had stopped all operations and activities since 2010, added Kundu in a press statement.
On January 3, 2011, the Securities and Exchange Board of India (SEBI) had directed Rose Valley not to collect any money from investors or to launch any scheme.
According to the order issued by the market regulator, the company had collected money from public under collective investment scheme in violation of the
legal provisions of the SEBI Act.
Rose Valley challenged the SEBI’s order in the
Calcutta High Court. Its petition was, however, dismissed.
The company then filed another petition challenging the constitutional validity of the SEBI Act.
Advocate Prasanta Kumar Dutta, counsel of the SEBI, said Rose Valley challenged section 11A of SEBI Act on collective investment scheme and other sections of the SEBI Act.
Dutta said the High Court had directed SEBI in July 2011 not to proceed against the company.
SEBI can take action against Rose Valley after today’s verdict, added Dutta.