Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Securities and Exchange Board of India (Mutual Funds) Regulations 1996 |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Directions Issued |
Headnote | Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 – Regulation 18(15)(c), 39(2)(a) – Winding up of Mutual Fund Schemes – Consent of unitholders – Held: For the purpose of clause (c) to Regulation 18(15), consent of the unitholders would mean consent by majority of the unitholders who have participated in the poll, and not consent of majority of all the unitholders of the scheme – In the present case, the objections to poll results rejected – Unitholders of the six schemes have given their consent by majority to wind up the six schemes – With the consent of the parties, M/s. SBI Funds Management Private Limited appointed to undertake the exercise of winding up, which would include liquidation of the holdings/assets/portfolio and distribution/ payment to the unitholders – Winding up and disbursements to be in terms of the directions in earlier orders dtd. 2nd February, 2021 and 9th February, 2021 and paragraph 41 herein – Other aspects and issues including the questions whether Regulation 18(15)(c) would apply when the trustee’s form an opinion that the scheme should be wound up in accordance with Regulation 39(2)(a) and the contention of the objecting unitholders regarding misfeasance, malfeasances, fraud and the effect thereof, not examined. Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 – Regulation 18(15) (c) – Mutual Fund Schemes – Winding up of – Consent of unitholders – Plea of the objecting unitholders that consent would be binding only on those who have consented to winding up of the mutual fund schemes and cannot be imposed on others – Held: Rejected – ‘consent’, in the context of the clause, clearly refers to ‘consent of the majority of the unitholders’, and not consent given by individual unitholders who alone would be bound by their consent, that is, it excludes unitholders who are not agreeable. Interpretation of Statutes – Principles of interpretation – Held: When there is choice between two interpretations, the Court would avoid a ‘construction’ which would reduce the legislation to futility, and should rather accept the ‘construction’ based on the view that draftsmen would legislate only for the purpose of bringing about an effective result. Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 – Regulation 18(15) (c) – Winding up of Mutual Fund Schemes – Consent of unitholders – Held: Regulation 18(15)(c) mandates and requires consent of the unitholders for winding up, but does not prescribe any mode or manner for taking consent – Therefore, by implication, the Regulation gives option of holding a physical meeting, postal poll or e-poll. Words & Phrases – “consent” – Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 – Regulation 18(15) (c) – Held: ‘consent’ in sub-regulation (15) to Regulation 18 refers to affirmative consent to winding up by ‘the majority of the unitholders’– Conversely, consent is denied when ‘majority of the unitholders’ do not approve the proposal to wind up the scheme. |
Judge | Hon'ble Mr. Justice Sanjiv Khanna |
Neutral Citation | 2021 INSC 87 |
Petitioner | Franklin Templeton Trustee Services Private Limited And Another |
Respondent | Amruta Garg And Others Etc |
SCR | [2021] 14 S.C.R. 573 |
Judgement Date | 2021-02-12 |
Case Number | 498 |
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