Supreme Court Issues Non-Bailable Warrants Against Managing Directors Of 32 Companies For Ignoring Its Order

Non-bailable warrants against managing directors of 32 Mumbai-based companies have been issued by the Supreme Court for not complying with its order as a result of which they face imminent arrest before being produced in court by the Mumbai Police if they fail to get preventive orders.

The list of defaulting companies includes Akshar Mercantile, Beta Trading, Vinay Mercantile, Anoop Multitrade, Anshul Mercantile, Everfame Trading, Highzone Trading, Inorbit Trading Co., Laksh Mercantile, Maginot Trading, Montreal Trading, Newtree Mercantile, Sarveshwara Trading etc.

The coercive action was taken after repeated failure by these companies to deposit a penalty of Rs 5 lakh each as ordered by the apex court in October 2016.

In its 2016 judgment, the Supreme Court had affirmed the Securities & Exchange Board of India’s (SEBI) order in 2013 in a case relating to former promoters of Bank of Rajasthan's (BoR) — the Tayal family, and other entities —indulging in fraudulent trade practices.

The SEBI had imposed a penalty of Rs 5 lakh each on Pravin Tayal, his brothers Sanjay Tayal and Navin Tayal, and his son Saurabh Tayal for acting in concert with around 100 other entities to misguide investors about the shareholding pattern of the bank.

The Supreme Court had upheld this order, and asked all these companies to pay up immediately. After they failed to deposit the fine, SEBI approached the Supreme Court in 2017 by filing a petition on contempt of court.

The Supreme Court bench gave time to the defaulting companies to comply with the court order and show adherence but many of these entities still did not deposit the penalty.

Later, the SEBI published notices in newspapers and the Supreme Court gave them a last opportunity but 32 companies did not comply, due to which the court has issued non-bailable warrants.