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SC to hear case against Sardar Sarovar Nigam on Feb 23

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Press Trust of India New Delhi
Last Updated : Jan 19 2013 | 11:08 PM IST

The Supreme Court will hear on February 23 a matter related to the premature redemption of deep discount bonds by public sector Sardar Sarovar Nigam Ltd (SSNL), allegedly a unilateral move aimed at depriving investors and bond-holders of their legitimate dues.

A bench headed by Chief Justice K G Balakrishnan tagged the two petitions filed by a trust of the Hotel Janpath Employees Provident Fund and SSNL Investors Grievance Forum with the Gujarat government's plea seeking transfer of all the related cases from Maharashtra to Gujarat.

Alleging that SSNL cannot unilaterally seek premature redemption of deep discount bonds (DDBs), the petitions had challenged the SSNL (Conferment of Power to Redeem Bonds) Act, 2008, on the grounds that it was contrary to the guarantee given by the state.

The petitions also challenged the validity of SSNL's notice issued on November 3, 2008, informing investors about the early redemption of the bonds at a face value of Rs 50,000 on Jan 10, 2009, and the payment of money through the electronic clearing system, which was contrary to the terms and conditions of the prospectus dated March 29, 1993.

SSNL had no call option unless the bond-holder prematurely encashed the bonds at the end of 7, 11 and 15 years or on maturity on January 11, 2014, at a maturity value of Rs 1,11,000, according to the trust.

"As such it is illegal and unjust on the part of SSNL to seek premature redemption of DDBs after the expiry of 15 years from the date of issue, whereas these were issued for a tenure of 20 years. It amounts to breach of trust," the petition filed through advocate A D N Rao stated.

SSNL had issued non-convertible bonds and also DDBs in September 1993 to part-finance constructing the Sardar Sarovar Dam over the Narmada.

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First Published: Jan 24 2009 | 11:48 AM IST

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