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The Supreme Court bench consisting of Justice Rohinton Nariman and Justice Navin Sinha in a recent case has stayed the proceedings under NCLT Mumbai suspecting the existence of complicity between the petitioners and the promoters of the company against whom insolvency proceedings have been initiated.
The petition was filed by the Royal Twinkle star club Ltd. and crystal check Inns Ltd. after the application to begin the insolvency resolution proceedings were admitted by the NCLT Mumbai bench. Both the companies were part of a joint investment scheme run by ten investors. Previously, the SEBI had ruled against the directors of the Royal Twinkle Star club Ltd. asking them to stop collecting any more money under the Collective investment scheme and had also asked them pay back investors’ money within 3 months. SAT also approved SEBI’s ruling and banned the scheme under which a collection of Rs 75 Crores was made by 18 lakh investors.
The Apex court held that it has come to its notice that there has been collusion between the petitioners and the promoters as the respondent has not really opposed the appointment of the insolvency resolution professional under the order dated 02.05.2017. Allowing the petitioners request of adding SEBI as a party and directing the IRP to submit a report on the action taken till now, the SC has stayed the proceedings.
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