Authority: Supreme Court of India

Order Date: 30-09-2026

Case Overview

  • Parties: Appellant – Securities and Exchange Board of India (SEBI); Respondents – Rajesh Sureshchandra Sheth & Ors., representing Pancard Clubs Limited (PCL) and a large group of investors (respondent nos. 3‑102).
  • Background: SEBI received multiple complaints alleging that PCL operated an un‑registered Collective Investment Scheme (CIS) and fraudulently mobilised funds across India. SEBI claims the company owes Rs 7,035,00,01,000/- to investors.
  • Regulatory Actions: SEBI initiated auction of all PCL properties, directed the company and its directors to refund collected amounts with returns, and launched recovery proceedings.
  • Parallel Proceedings: The Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 was invoked, leading to attachment of PCL assets by the Maharashtra Government.
  • Insolvency Proceedings: Investors filed a Section 7 application under the Insolvency and Bankruptcy Code (IBC) before the NCLT. The NCLT admitted the application, rejected SEBI’s impleadment request, and later approved a Resolution Plan valued at Rs 707 crore. Under the plan, the Successful Resolution Applicant (SRA) was to pay Rs 200 crore, of which Rs 69.80 crore has already been paid to investors.
  • Appeal: Dissatisfied with the NCLT’s rejection of its impleadment, SEBI appealed to the NCLAT, which dismissed the appeal. The present appeal is filed under Section 62 of the IBC before the Supreme Court.

Final Outcome

1. Constitution of Asset Sale Committee: The Court appointed Justice Sudhanshu Dhulia (former Judge of this Court) as Chairman of an “Asset Sale Committee”. The Committee will include one nominee each from SEBI, the investigating team under the MPID Act, and the investors (as decided by Justice Dhulia). SEBI will provide secretarial assistance.

2. Valuation Findings (Committee Report):

  • 19 properties listed in the Information Memorandum (IM) were valued at Rs 662.14 crore during the CIRP; after adjustments, the value attributable to PCL is Rs 518.41 crore.
  • 2 properties (office units in Thane and Pune) valued at Rs 121.44 crore do not belong to PCL and are subtracted.
  • 1 property where PCL holds 78.79 % ownership is valued at Rs 105.08 crore; the non‑PCL share (21.21 %) amounts to Rs 22.29 crore and is subtracted.
  • 30 additional properties exclusively owned by PCL, not in the IM, are valued at Rs 101.17 crore.
  • Total valuation of PCL‑owned properties (47 properties) = Rs 619.57 crore.
  • 217 properties belonging to PCL’s associated companies (214 valued) total Rs 814.19 crore.
  • Aggregate valuation of PCL, its subsidiaries and associated entities = Rs 1,433.76 crore (Table D). This excludes 15 properties already sold by SEBI.

3. Auction Directive: The Committee shall prepare a comprehensive list of all properties, conduct auctions, and consider any objections raised. Proceeds will first satisfy the claim of the SRA’s client (who wishes to withdraw) and then be distributed to investors, adjusting for amounts already paid.

4. Stay of Proceedings: All other proceedings pending as of the order date are stayed until the Committee completes its valuation and auction exercise.

5. Additional Instructions:

  • The Committee will investigate alleged undervaluation of assets by SEBI (subject of a separate High Court matter).
  • Claims of ownership by third parties (e.g., a client of Mr. Vikram Chaudhri) will be examined.
  • The Committee will identify and value any assets of PCL located abroad, with assistance from the Union of India and other authorities.
  • Remuneration of Justice Dhulia and Committee members will initially be borne by SEBI and later recovered from auction proceeds.
  • The Court scheduled further hearings of related appeals (Civil Appeal No. 5089/2019 and No. 20971/2017) on 27‑Nov‑2026.

Topics: Asset Valuation, Investor Recovery