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Delhi High Court on Monday issued notice to the Trustee and Asset Management Company of Franklin Templeton Mutual Fund and SEBI on the plea of writ petitioner Amruta Garg, challenging the Winding Up notice to close its 6 debt funds.

The Writ Petition also challenges a consequent notice issued for E-voting and SEBI’s Mutual Fund Regulations. The Petitioner has requested for refund of her money invested in Franklin Templeton Short Term Income Plan. 

The Petitioner contended in the petition that the reason assigned by the company for winding up of the scheme are a mare hogwash and the company has chosen a very convenient excuse of present COVID-19 pandemic to cover up its deliberate deficient actions, illegalities and irregularities in lending and investing which has severely jeopardized rights and interests of a large number of investors. Further the Petitioner claims that the Trustees have failed to make prudent investments and faulted in proper administration of the Fund. Franklin Templeton has been falling short in following the Circulars of SEBI, which were for increasing transparency of investment, time and again. Also, the Fund invested in the securities which were of low credit rating. 

A Division Bench presided by Justice Sidharth Mridul and Justice Talwant Singh has directed SEBI to ensure compliance of the Regulations and take action if it finds any substance in the audit (ordered by SEBI) which is already underway. Further, the petitioner has also been given the opportunity to submit further documents before SEBI against Franklin Templeton.  All decision to be taken on winding up of the scheme would be subject to the outcome of the Writ Petition.

Mr. Ravindra Shrivastava, Senior Advocate argued the case on behalf of Petitioner and The Writ Petition was filed by Mr. Abhinav Shrivastava, Partner GSL Chambers and Mr. Manish Yadav Advocate. Mr. Tushar Mehta, Solicitor General, appeared for SEBI and Franklin Templeton was represented by Mr. C.A. Sundaram, Senior Advocate.

India Legal Bureau

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