The Supreme Court today ruled that a 2003 court decision to sell around 5.5 million shares of the late Harshad Mehta’s family was wrong.
The apex court said the decision to permit the custodian to sell 54,88,850 shares of Apollo Tyres once held by the family was "vitiated" and done in violation of "principles of natural justice." But, since any decision to quash the entire sale was difficult, the court directed the Special Court (Trial of Offences Relating to Transactions in Securities) Act, to recover the 4.95 per cent unused shares from Apollo Tyres or its management and put these to fresh sale.
A bench of judges D K Jain and A K Ganguly passed the judgment while allowing an appeal filed by Ashwin S Mehta and other family members of the ‘Big Bull’ who shot into infamy in early 90s.
The family had challenged a Mumbai special court's decision of May 2003 to permit the custodian to sell the shares of Apollo Tyres Ltd at Rs 90 per share to the same company without making efforts for proper bids. The shares had earlier been attached by the custodian.
"Having examined the impugned order in the light of the statutory provisions and the norms laid down for sale of the subject shares, we are of the opinion that there is substance and merit in the submissions made by learned counsel for the appellants to the extent that the special court failed to make a serious effort to realise the highest possible price for the said shares. We also feel that the special court overlooked the norms laid down by it in its order dated August 17, 2000, ignored the afore-extracted directions by this court contained in order dated August 23, 2001, and glossed over the procedural irregularities committed by the Custodian," the apex court said.
