A trust of Hotel Janpath Employees Provident Fund has moved the Supreme Court alleging that public sector Sardar Sarovar Nigam Ltd (SSNL) cannot unilaterally seek premature redemption of deep discount bonds and, thus, harass innocent investors.
It alleged that the "illegal and unjust" action with "ulterior motives" on the part of the Gujarat Government-owned company was meant to harass the innocent investors and bond holders and deprive them of their legitimate dues.
A bench headed by Chief Justice K G Balakrishnan refused to give any relief and directed that the matter be taken up for hearing on January 16, the notified date.
A trust of Hotel Janpath Employees Provident Fund, which safeguards its members - the employees of the hotel - and Investors Grievance redressal Forum had challenged the Sardar Sarovar Nigam Ltd (Conferment of Power to Redeem Bonds) Act, 2008 on the ground that it was contrary to the guarantee given by the state and was also beyond the legislative competence of the Centre.
It also challenged the validity of a notice issued on November 3 last year by SSNNL that informed the investors and bond holders about the early redemption of the bonds, which was contrary to the terms and conditions set out in the offer document/prospectus dated March 29, 1993.
According to the petitioners, the notice stated that deep discount bonds (DDBs) would be redeemed at a face value of Rs 50,000 on the redemption date (January 10, 2009) and the money would be paid to the bond holder's bank account through electronic clearing system.
SSNNL had no call option unless the bond holder itself 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.
