Complete valuation of Golden Forest properties in 4 weeks: SC to Income Tax dept

The Supreme Court on Tuesday took up a bunch of petitions filed by investors seeking progress on the sale of company assets to get a refund of their hard-earned investments

New Delhi: The Supreme Court has directed the Income Tax department to complete the valuation of properties belonging to Golden Forests India Limited (GFIL) within four weeks as nearly 1.4 million investors who were duped by the company await the return of their investments. 

(Representative Photo)

As the Chandigarh-based company is stated to have acquired about 7,750 acres of land across the country, the top court on Tuesday took up a bunch of petitions filed by investors seeking progress on the sale of company assets to get a refund of their hard-earned investments. 

A bench of justices BR Gavai and Sanjay Karol, in its order passed on July 16 said, “With regard to valuation of certain properties, as directed by us in the earlier orders, learned senior counsel appearing on behalf of the Union of India states that the same is under process and he will be in a position to inform about the present status of the same on the next date of hearing.” 

Posting the matter for hearing on August 28, the court-appointed senior advocate Sunil Fernandes as amicus curiae to assist it in the matter. “We request the Income Tax authorities to complete the valuation within a period of four weeks from today,” the bench said.

The GFIL, which commenced business in 1987, came out with several schemes inviting funds from investors in lieu of which plots of land were purchased. The scheme attracted a large number of investors as it promised high returns of up to 20% for even a minimum investment of Rs.1,000. Within a year, the company mobilised Rs.311 crore and its capital base rose to Rs.1,037 crore. 

In 1997, the Securities and Exchange Board of India (SEBI) initiated an inquiry against the company and, a year later, based on the findings of the inquiry, prohibited the company from alienating its properties following serious financial and other irregularities committed by the company. 

Some of the investors who appeared before the apex court said the properties belonging to GFIL at Panchkula had been encroached on for carrying out illegal mining. The bench noted the details of the properties and directed the district magistrate of Panchkula to conduct an inquiry and submit a report on the same within four weeks. 

As multiple proceedings by investors arose in several high courts, the matter was transferred to the Supreme Court, which formed a committee in 2004 to invite claims from investors and creditors of GFIL and its group companies.

The task before the committee, headed by former Delhi high court chief justice RN Agarwal, was to also identify properties of the GFIL group to be put on sale for recovery of investments.

In 2018, the top court directed 70% of the amount collected, roughly around Rs.700 crore, to be disbursed to the investors upon verification of their claim. 

The top court has since been monitoring the progress made by the committee and that of the income tax authorities assisting the committee in the valuation of the properties.

In January last year, the apex court directed the committee to give a list of the entire properties to be auctioned to the Income Tax authorities and directed the valuation to be completed in two months, an exercise which is still pending. 

“We, prima facie, find that what is of paramount importance is getting the best price in the least complicated manner, so that the interest of the investors is safeguarded. We find it appropriate that if a composite auction of all the properties with the liabilities and encumbrances thereon is conducted, then the rigour of holding independent auctions will be avoided and, at the same time, it will fetch the best price,” the order passed on January 24, 2023 read.