The Karnataka High Court on Monday is likely to pronounce its ruling in the case filed against Franklin Templeton Mutual Fund by a clutch of unitholders of the six debt schemes that were shut down abruptly. The outcome of the case could decide the timing of the winding up process of the schemes, delayed by the legal disputes between the fund house and the unitholders.
“We have received a communication that it is fixed for order,” said Paritosh R Gupta of Gupta Law Associates, a lawyer appearing for one of the unitholders. “This means the court could pronounce its final order or judgement on Monday.” Lawyers familiar with the matter said the judgement is likely to be made on Monday afternoon.
An email sent to Franklin Templeton did not elicit any response.
The court would have examined whether Franklin followed the correct processes to shut down the schemes. The findings of the Securities and Exchange Board of India’s forensic report on the six debt schemes could also have been taken into account.
Franklin Templeton had abruptly closed down the six debt schemes handling Rs 26,000 crore of investor money on April 23 citing redemption pressure and lack of liquidity in the bond market. The fund house was facing four separate sets of suits by its investors in Gujarat, Delhi and Madras High Courts. In July, the Supreme Court clubbed all the cases and directed Karnataka HC to hear the matter expeditiously.
The hearing of the case was initiated on July 8 in the Karnataka High Court. The division bench headed by Justice Abhay Shreeniwas Oka and Justice Ashok S Kinagi had completed the hearing of the case on September 24 and had subsequently reserved its order.
In a letter released on September 28, the fund house had informed investors that the Karnataka High Court has finished hearing all the arguments and it is now awaiting the judgement.