In a landmark ruling, the Delhi High Court has directed a forensic audit of the Special Committee overseeing the winding up of the CRB Mutual Fund’s Arihant Mangal Growth Scheme, citing serious concerns over transparency, alleged collusion, and prolonged delays. The matter, which has remained entangled in litigation since 1997, involves nearly ₹229 crore collected from close to 19,400 investors three decades ago.
The bench of Justice Prathiba M. Singh directed the Special Committee to transfer funds worth ₹122.86 crore to the Delhi High Court’s Registrar General. Of this, ₹21.12 crore was earmarked for Rommel in line with the apex court’s status quo order.
The court ordered the committee to provide a detailed chart of all disbursements (₹211 crore so far). Submit accounts of office, staff, and operational expenses. Halt any further monetary transactions without court approval.
The case dates back to the early 1990s, when CRB Capital Markets Ltd. (founded by financier C.R. Bhansali) launched the Arihant Mangal Growth Scheme through its asset management and trustee companies. However, regulatory inspections by SEBI in 1994 revealed massive violations, leading to restrictions and subsequent winding-up proceedings. The Reserve Bank of India and SEBI initiated parallel actions against CRB group entities, culminating in a protracted legal battle.
After the death of the court-appointed Provisional Administrator in 2012, the Delhi High Court constituted a Special Committee in May 2013 to manage the winding up of the scheme. Over the years, the committee redeemed 15.7 crore units worth approximately ₹211 crore. Yet, questions arose regarding its functioning.
Applications filed by SEBI and third parties alleged that the committee:
- Released funds to CRB’s ex-management and group firms, despite a Bombay High Court embargo in 1999.
- Functioned under the influence of CRB’s former directors.
- Failed to provide transparent details of disbursements, unlike its predecessor who filed quarterly balance sheets.
Rommel Investments Pvt. Ltd. intervened in the proceedings, alleging wrongful transfer of Reliance Industries Ltd. (RIL) shares and ₹43.75 lakh in fixed deposits. The Delhi High Court in 2019 ordered NSE to hand over these assets to the Special Committee, a decision Rommel challenged. The dispute eventually reached the Supreme Court, which in 2021 ordered a status quo on the contested assets pending appeal.
Acknowledging allegations of conflict of interest and lack of transparency, the High Court has ordered a forensic audit of the committee’s functioning since 2013. It also reconstituted the Special Committee in September 2023 to ensure impartial oversight in winding up the fund and refunding remaining investors.
Nearly 28 years after the collapse of CRB Capital Markets, thousands of investors are still awaiting closure. With Rs. 122 crore now under the custody of the Registrar General and forensic scrutiny ordered, the High Court’s ruling may finally pave the way for a transparent and equitable resolution.
Case Details
Case Title: Securities & Exchange Board Of India Versus CBR Capital Market
Case No.: CO.PET.379/2009 & CO.APPL. 420/2022, 351/2023, 546/2023, 37/2024, 38/2024, 39/2024, 203-04/2024, 506/2024, 403-04/2025.
Date: 1st September, 2025
Counsel For Petitioner: Pratap Venugopal, Sr. Adv.
Counsel For Respondent: Avneesh Garg
