Heera Gold Scam : Supreme Court Directs ED To Auction Two Properties, Asks Nowhera Sheikh To Deposit Rs 25 Crores
Gursimran Kaur Bakshi
12 Nov 2024 10:10 AM IST
The Supreme Court yesterday extended the period to surrender forf Nowhera Shaikh, the Managing Director of Heera Gold Exim Private Limited, to 3 months in a miscellaneous application filed in the main matter related to fraud and cheating of investors across the country. Apart from this, the Court has directed the Enforcement Directorate to auction 2 properties and pay 25 crores so that the investors' money could be paid back from the money recovered.
The main matter was disposed of after the Supreme Court cancelled her bail on October 18, on the failure to raise 580 crores to settle the claims of investors despite repeated chances given by the Court to do so.
A bench of Justices J.B. Pardiwala and Manoj Misra had ordered Shaikh to surrender within 2 weeks, and all FIRs registered against Shaikh in different States shall now proceed in accordance with law. It clarified that the present order shall not prevent the respondent-accused from applying for bail afresh.
After this, she filed a miscellaneous application which was heard by the same bench on November 4. In the miscellaneous application, Senior Advocate Kapil Sibal appeared for Shaikh and proposed that 3 properties (Naina Towers, Heera Foodex and Heera Retails (Hyd)) are encumbrance-free.
The Court inquired whether Shaikh owned the 3 properties. Based on this, the Court asked Advocate Venkatesh, for ED, to investigate the status of the 3 properties. It also directed the State of Telangana to investigate and file a report on the status of the 3 properties. Based on this, the Court extended the surrender period to November 12.
A bench comprising Justices J.B. Pardiwala and R. Mahadevan yesterday perused the report of the ED and ordered that the first 2 properties should be auctioned.
During the hearing, Sibal submitted that the report states that other properties are free of encumbrance. Counsel for the State of Telangana informed the Court that it has taken a similar stand in regard to the properties in question as that of the ED's report.
Senior Advocate Dushyant Dave, for intervenors, objected to the 3rd property and stated that it was encumbered. Senior Advocate Navin Pahwa, for intervenors, stated that there is an encumbrance against the 1st property in this favour.
Venkatesh suggested that for now, the 2 properties could be sold and Shaikh should deposit 50 crores so that some money could be paid to the investors. As for the 3rd property, he stated that its status could not be verified because it is encumbered.
Sibal added that there is a corporate officer worth 600 crores that the petitioners are willing to sell.
Raising the issue that objections to the properties should not be claimed like this, Justice Pardiwala said: "We will only go by what the ED has to say and the State of Telangana. If you have any right, go to the civil court and establish it. We cannot further stall the action...we dont know your credibility. We are not going to examine your title deeds to agreement to sale, whatever it is. We want money. We want to see the colour of money. This amount has to go to all those investors..."
Stating that they will give first priority to the pay investors, the Court ordered: "Our order dated 4th November reads thus...Today, when the matter was taken up, Mr. Venkatesh, learned counsel for ED, has produced the report as directed by this Court. The report reads thus "..." The State of Telangana was directed to file its report, however, due to some difficulties, the State was unable to file report. However, a statement is made by learned counsel appearing for the State of Telangana makes that State has verified and ascertained that 2 properties are free of all encumbrance. At this stage, senior counsel Navin Pahwa, appearing for intervenor, submitted that his client has a mortgage deed so far as first property is concerned, that is namely Naina Towers.
We are not getting into all these controversies at this stage. If any person has any interest in the property created by any document or so, that person will have to stablish his right in accordance with law. Today, we go by the statement and enquiry undertaken by the ED as well as the State of Telangana. Having perused the report of the ED, we are able to say that Naina towers and one more are attached by ED and free of all encumbrance. In such circumstances, we direct ED to put all these two properties to auction in accordance with law. We are informed that this may take 3 months time before entire proceedings are completed.
We permit the ED to proceed further with the issuance with auction notice in accordance with law after fixing offset price. The offset price shall be fixed after obtaining a report from a government-approved valuer. Having regard to what has been stated in para.8 of the report filed by ED, we direct the petitioner to furnish complete details about all other properties free from encumbrance within period of 2 weeks....Once information on all those properties are furnished, ED shall proceed to put those to auction and try to recover the maximum amount...We direct the petitioner to deposit an amount of 25 crores within 3 months to ED. This amount shall be paid directly to ED. Time period to surrender is extended further to 3 months from today..."
The Court did not state anything in regard to the 3rd property. It will take the matter after 1 month to monitor the development in this case.
Background
For context, Heera Gold Exim Private Limited, a company dealing in gold, collected huge deposits from the public with a promise to pay a 36% dividend on the invested amount. When the company failed to pay dividends and maturity amounts, investors across states lodged complaints, inter alia, alleging cheating and fraud.
In light of the same, Nowhera Shaikh was arrested and the matter was investigated by the Serious Fraud Investigation Office (SFIO). On January 19, 2021, the Supreme Court granted her interim bail on the condition that she would settle the claims of the investors. The interim bail order stated: "It is towards the aforesaid endeavour that we are willing to enlarge the petitioner on interim bail as a probation period for her to show her bona fides to settle the claims of the investors making it clear that lack of strict compliance will take her to the four corners of the custody once again with little chance of getting out thereafter."
The specific part of the order in this regard stated: "Therefore, today we have made ourselves very clear that failure on the part of the accused to raise the necessary finance may entail the following consequences: (i) The petition filed under Article 32 of the Constitution for clubbing of all the FIRs may be liable to be dismissed; (ii) The SFIO may be asked to proceed further in accordance with law; (iii) The bail granted by this Court may be liable to be cancelled; (iv) We may ask each State where the FIRs have been registered to investigate them in accordance with law; and (v) We may also ask the Enforcement Directorate to proceed in accordance with law."
Case Details:NOWHERA SHAIK AND ANR.v. UNION OF INDIA AND ORS.MA 2227/2024 in MA 2227/2024 in W.P.(Crl.) No. 31/2020
Apperances: Senior Advocate Kapil Sibal, Advocate Nizam Pasha, and AOR Lzafeer Ahmad (for petitioner), Senior Advocate Dushyant Dave (for intervenors), & Ventatesh (for ED)
