Tuesday, October 1, 2013

Official liquidator to assess, pay Rs 180cr to City Limo claimants

Official liquidator to assess, pay Rs 180cr to City Limo claimants

Swati Deshpande, TNN | Sep 24, 2013, 02.29 AM IST

MUMBAI: There is finally some hope for thousands of investors duped by alleged fraudulent schemes of Mumbai-based City Limouzines (India) Ltd. The Bombay high court on Monday directed that the official liquidator (OL) would now be the one-window authority for assessing and disbursing claims. The court also asked the Economic Offences Wing (EOW) to forward the 60,000 complaints it has received so far to the OL.

Lawyer for the EOW Uma Palsuledesai said, "The department was ready to hand over the recovered amount to the OL in the interest of investors' claims.'' It had recovered about Rs 180 crore. The scam is believed to be worth over Rs 1,000 crore. But Justice Nitin Jamdar said "no amounts will be distributed (to claimants) without leave of the court".

The development marks a cohesive effort for claims disbursement.

Now only the official liquidator will handle all claims, even future claims,'' the judge said. He clarified that his order would not affect criminal proceedings pending in various courts against the firm and its owner Sayed Masood, including the one initiated by the EOW under the Maharashtra Protection of Investors and Depositors Act and money laundering cases filed by the Enforcement Directorate.

The HC was hearing a plea filed by the City Group Investors Welfare Association against the EOW for its claims. The issue on Monday was whether the claim to recovered amounts would first rest with the ED or investors. Additional solicitor general Kevic Setalvad and advocate Som Sinha said the ED had precedence and added that properties-worth Rs 130 crore-attached by the ED across metros, would not be handed over to the OL.

After hearing J P Sen, counsel for the OL, Justice Jamdar said, "The money given by EOW must be invested in short-term deposits in nationalized banks, its interest used for claim assessment." The commerce ministry must consider providing funds to the liquidator, the HC saidand ordered all authorities to coordinate with the OL.

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