Case: FRANKLIN TEMPLETON TRUSTEE SERVICES PRIVATE LIMITED AND ANOTHER Vs. AMRUTA GARG AND OTHERS ETC

to be the best way to ensure a fair and equitable distribution of monies to unitholders while minimizing erosion in value for investors. It is also the contention of the trustees that they were required to justify and explain the reasons for winding up of the six schemes and hence the notice was worded in this manner. The notice had also informed the investors that there would be suspension of subscription and redemption post the cut-off time from 23rd April, 2020. All Systematic Investment Plans, Systematic Transfer Plans and Systematic Withdrawal Plans into and from the above- mentioned funds stood cancelled post the cut off time from 23rd April, 2020. The notice had also furnished information and clarification regarding distribution of monies from the Fund Assets, inter alia stating that following the decision to wind up the six schemes, the trustees would proceed for orderly realization and liquidation of the underlying assets with the objective of preserving value for unitholders. Their endeavour would be to liquidate the portfolio holdings at the earliest opportunity, to enable an equitable exit for all investors in the unprecedented circumstances. We do not think, in the facts of the present case, the notice for e-voting and the contents would justify annulling the consent given by the unitholders for the winding up of the six schemes. 38. We will now refer to and deal with some of the other objections to the consent/e-voting results which, in our opinion, are merely assertions, or at best minor irregularities, which do not have any substance. These contentions are: (i) Mr. T.S. Krishnamurthys appointment as the Observer by SEBI vide its letter dated 18th December, 2020 was made public belatedly on 26th December, 2020; (ii) Notice for e-meeting dated 6th December, 2020 issued under the name of Mr. Alok Sethi, Director of the Trustees, was not digitally signed by him. However, Mr. Alok Sethi had digitally signed the notice subsequently on 28th December, 2020; (iii) M/s. J. Sagar and Associates should not have been appointed as the Scrutiniser to oversee the conduct of the e-voting and the Observer Mr. T.S. Krishnamurthy should have acted as the Scrutinser; (iv) KFin Technologies was appointed for providing electronic platform for e-voting vide meeting of the Board of Directors of the trustees dated 29thApril, 2020 and thereafter the agreement dated 8th June, 2020 was entered into, but this agreement was digitally signed on 30th June, 2020. Similarly, M/s. J. Sagar and Associates, the law firm, was appointed as the Scrutiniser by letter of engagement dated 13th May, 2020 and the law firm had conveyed its willingness to act as the Scrutiniser. However, the resolution by the Board of Directors of the trustees was approved by circulation on 21st May, 2020. Further addendum to their letter of engagement was issued on 22nd December, 2020; and (v) Notices for e-voting did not specify with clarity whether e-voting was possible on any technology platform, viz. laptop/ desktop or smartphone, etc., though such facility was available. 39. These contentions are mere nitpicks and would hardly justify rejection of the consent to winding up which has been expressed by more than 95% of the unitholders who had voted. Mr. T.S. Krishnamurthy was appointed as the Observer by SEBI in view of the directions given by this Court to ensure fairness and transparency. He was not to conduct the meeting or the process, but only to oversee and give his report on the entire process. Being an independent observer, his observations and comments vide the report would help resolve any debate, doubt or questions. The observer is the eyes and ears, which the Court could rely. Mr. T.S. Krishnamurthy in his report has mentioned that many calls, messages and e-mails were received by him expressing difficulty in voting, non-receipt of passwords and difficulty in reaching the helplines. He had, therefore, conveyed these messages to the trustees and KFin Technologies. Based on the response, the number of helplines were increased. Missed calls were returned and answered. The Observers report vide Annexure-10 refers to the complaints/calls made to Mr. T.S. Krishnamurthy and also records that these were redressed. No unitholder has expressed or stated that they could not vote or their queries were not answered. Absence or lack of digital signatures on the notice is a technical and not a substantive objection. Moreover, the trustees have explained that in view of the objection raised by the Technical Assistance Team, Mr. Alok Sethi had digitally signed a copy of the notice for the purpose of the record. This digitally signed notice was made available to the Technical Assistance Team. M/s. J. Sagar and Associates and KFin Technologies had been earlier appointed by the trustees possibly for compliance of clause (c) to Regulation 18(15) of the Regulations. Agreements earlier in point of time with KFin Technologies and M/s. J. Sagar and Associates would not, in any manner, be an irregularity. Further, Mr. T.S. Krishnamurthy was not to himself count the votes as this exercise had to be undertaken essentially by the Scrutiniser, M/s. J. Sagar and Associates. To conduct the e-voting, for the purpose of consent, the trustees had engaged services of KFin Technologies and M/s. J. Sagar and Associates. M/s J. Sagar and Associates being a law firm, it is obvious, are not experts in information technology. Necessarily, they would rely on the data and details made available by KFin Technologies. We have already dealt with the question of integrity and authenticity of the e-voting data and that it was checked by two technical experts who are Assistant Directors at CFSL, Hyderabad. The comments of the forensic experts have been examined and considered in detail. 40. In the present case, we do not think the procedure prescribed by Regulation 4117 is required to be followed as the trustees themselves have stated that the process of winding up, which would include liquidation of the securities and distribution/payment to the unitholders, should be undertaken by a third party. The objectors had also made similar submissions.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]Pertinently, after receipt of the forensic audit report, SEBI has issued show cause notice which is pending adjudication. Common people invest in mutual funds driven by factors such as simplicity in purchase and redemption of units, flexibility of holding and tenure, and liquidity by conversion into money. In the light of this, immediate directions are required as embargo prohibiting redemption of the units, effected by Regulation 40 from the date of publication of notice under Regulation 39(3)(b) on 23rd April 2020, for over ten months. Thereby the unitholders have suffered privation and harassment. This, in same manner, also undermines public sentiments and confidence vital for investments in mutual funds.Hence, in view of larger public interest, presentlywe are only deciding the limited aspect of unitholders consent to winding up [assuming that Regulation 18(15)(c) would apply even where the trustees form an opinion that a scheme should be wound up under Regulation, and are persuaded to direct winding up of the six schemes to ensure disbursement of funds and liquidation of assets/securities.Lastly and importantly, during the course of hearing on 2nd February, 2021, counsels for the objecting unitholders have agreed to disbursal of Rs.9,122 crores amongst the unitholders, which, it has been directed would be in proportion to the unitholders respective interest in the assets of the scheme, as suggested by SEBI. It is obvious that this disbursal to unitholders is possible only when we accept that the six schemes should be wound up.7. Interpreting the term consent with reference to clause (c) of sub- regulation (15) to Regulation 18, the judgment under challenge holds:221. Obviously, there can be a consent of the unit- holders to a proposed of winding up of a Scheme only if the majority of the unit-holders give consent to do so. Sub-clause (c) of clause (15) of Regulation 18 is silent on the nature of majority. Obviously, it is not a specific majority like three-fourth majority. Wherever three-fourth majority of the unit-holders was intended, the Mutual Funds Regulations say so. For example, sub-clause (b) of clause (15) of Regulation 18 and sub-clause (b) of clause (2) of Regulation 39. Therefore, it has to be a simple majority. For this purpose, we must make a reference to a decision of a Full Bench of the Allahabad High Court in the case of Wahid Ullah Khan v. District Magistrate, Nanital. In paragraph 32, the Allahabad High Court held thus:32. The word majority speaks, of greater number out of the total number which cannot be a fixed number. In fact, the starting point of majority is more than half, but any number more than half still continues to be majority. Majority cannot be said only confining to more than half. Majority of three-fourths of the total number, two-thirds of the total number would all come within the sphere of the word majority. A person is said to have won by a majority of fifty thousand votes or thirty thousand votes. All speak about the extent of majority. A majority may start from a number which is more than half and would continue till the balance of the number excluding one number. In the matter of votes if a resolution is carried either in favour or against by all it is said to be unanimous. Majority is used in contradiction to minority. Thus, there must exist a minority vote. So, even where one vote is cast in favour or against resolution the balance of the total number of votes cast would all be a number of majority vote.222. The meaning assigned by the Allahabad High court to the word majority appears to be most correct meaning. The Blacks Law Dictionary provides that a majority means a number that is more than half of a total. Therefore, consent, as contemplated by sub- clause (c) of clause (15) of Regulation 18 will have to be by a simple majority of the unit-holders of a particular Scheme which is decided to be wound up.While we partly agree with the aforesaid observations, we would like to emend the meaning given to the expression the consent of the unitholders for the purpose of clause (c) to sub- regulation (15) of Regulation 18.8. However, we begin by rejecting the argument raised by some of the objecting unitholders that consent would be binding only on those who have consented to winding up of the mutual fund schemes and cannot be imposed on others. The word consent, in the context of the clause, clearly refers to consent of the majority of the unitholders, and not consent given by individual unitholders who alone would be bound by their consent, that is, it excludes unitholders who are not agreeable. To accept the second or contra view, as pleaded by some of the objecting unitholders, would be to negate the very object and purpose of clause (c) to sub-regulation (15) of Regulation 18. In fact, the submission, if accepted, will make the Mutual Fund schemes and the winding up provisions in the Mutual Fund Regulations unworkable as there would be two different classes of unitholders – one bound by the consent, and others who are not bound by consent. Consequently, the scheme would not wind up. The intent behind the provision is to bind even those who do not consent.The word/expression consent in sub-regulation (15) to Regulation 18 refers to affirmative consent to winding up by the majority of the unitholders. Conversely, consent is denied when majority of the unitholders do not approve the proposal to wind up the scheme.12. Clause (c) to sub-regulation (15) of Regulation 18 per se does not prescribe any quorum or specify the criterion for computing majority or ratio of unitholders required for valid consent for winding up. Clause (b) of Regulation 39(2), on the other hand, specifies that seventy-five per cent of the unitholders of a scheme can pass a resolution that the scheme be wound up. Similarly, Regulation 41(1) requires the trustees to call a meeting to approve, by simple majority of the unitholders present and voting, a resolution for authorising the trustees or any other person to take steps for winding up of the scheme. Section 48 of the Companies Act, 2013 states that where share capital of a company is divided into different classes of shares, the rights attached to the shares of any class may be varied with the consent in writing of the shareholders of not less than three-fourths of the issued shares of that class. Sub-section (3) to Section 55 of the Companies Act, 2013 in case of failure to redeem or pay dividend refers to consent of holders of three-fourths in value of the preference shares. Section 103 of the Companies Act, 2013 prescribes minimum quorum for shareholder meetings.14. The concept of absurdity in the context of interpretation of statutes is construed to include any result which is unworkable, impracticable, illogical, futile or pointless, artificial, or productive of a disproportionate counter mischief (See Bennion on Statutory Interpretation, 5th Edition, at 969.). Logic referred to herein is not formal or syllogistic logic, but acceptance that enacted law would not set a standard which is palpably unjust, unfair, unreasonable or does not make any sense.(Ibid at 986.) When an interpretation is beset with practical difficulties, the courts have not shied from turning sides to accept an interpretation that offers a pragmatic solution that will serve the needs of society( Ibid at 971, quoting Griffiths LJ.). Therefore, when there is choice between two interpretations, we would avoid a construction which would reduce the legislation to futility, and should rather accept the construction based on the view that draftsmen would legislate only for the purpose of bringing about an effective result. We must strive as far as possible to give meaningful life to enactment or rule and avoid cadaveric consequences(See Principles of Statutory Interpretation by Justice G.P. Singh, 14th Edition, at 50.).15. We would neither hesitate in stating the obvious, that modern regulatory enactments bear heavily on commercial matters and, therefore, must be precisely and clearly legislated as to avoid inconvenience, friction and confusion, which may, in addition, have adverse economic consequences(See Bennion on Statutory Interpretation, 5th Edition, at 980.). The legislator in the present case must, therefore, reflect and take remedial steps to bring about clarity and certainty in the Mutual Fund Regulations.16. Reading prescription of a quorum as majority of the unitholders or consent as implying consent by the majority of all unitholders in Regulation 18(15)(c) of the Mutual Fund Regulations will not only lead to an absurdity but also an impossibility given the fact that mutual funds have thousands or lakhs of unitholders. Many unitholders due to lack of expertise, commercial understanding, relatively small holding etc. may not like to participate. Consent of majority of all unitholders of the scheme with further prescription that fifty percent of all unitholders shall constitute a quorum is clearly a practical impossibility and therefore would be a futile and foreclosed exercise.In the case of unitholders, the number is fluctuating and ever changing and, therefore, indefinite. Numbers of unitholders can increase, decrease and change with purchase or redemption. Therefore, in the context of clause (c) of Regulation 18(15), we would not, in the absence of any express stipulation, prescribe a minimum quorum and read the requirement of consent by the majority of the unitholders as consent by majority of all the unitholders. On the other hand, it would mean majority of unitholders who exercise their right and vote in support or to reject the proposal to wind up the mutual fund scheme. The unitholders who did not exercise their choice/option cannot be counted as either negative or positive votes as either denying or giving consent to the proposal for winding up.18. Investment in share market, though beneficial and attractive, requires expertise in portfolio construction, stock selection and market timing. In view of attendant risks, diversification of portfolio is preferred but this consequentially requires a larger investment. Mutual funds managed by professional fund managers with advantages of pooling of funds and operational efficiency are the preferred mode of investment for ordinary and common persons. It would be wrong to expect that many amongst these unitholders would have definitive opinion required and necessary voting in a poll on winding up of a mutual fund scheme. Such unitholders, for varied reasons, like lack of understanding and expertise, small holding etc., would prefer to abstain, leaving it to others to decide. Such abstention or refusal to express opinion cannot be construed as either accepting or rejecting the proposals. Keeping in view the object and purpose of the Regulation with the language used therein, we would not accept a construction which would lead to commercial chaos and deadlock. Therefore, silence on the part of absentee unitholders can neither be taken as an acceptance nor rejection of the proposal. Regulation 18(15)(c), upon application in ground reality, must not be interpreted in a manner to frustrate the very law and objective/purpose for which it was enacted. We would rather accept a reasonable and pragmatic construction which furthers the legislative purpose and objective. The underlying thrust behind Regulation 18(15)(c) is to inform the unitholders of the reason and cause for the winding up of the scheme and to give them an opportunity to accept and give their consent or reject the proposal. It is not to frustrate and make winding up an impossibility.Way back in 1943, Sutherland in Statutes and Statutory Construction, Volume 2, Third Edition at page no. 523, in Note 5109, had stated:Where a statue has received a contemporaneous and practical interpretation and the statute as interpreted is re-enacted, the practical interpretation is accorded greater weight than it ordinarily receives, and is regarded presumptively the correct interpretation of the law. The rule is based upon the theory that the legislature is acquainted with the contemporaneous interpretation of a statue, especially, when made by an administrative body or executive officers charged with the duty of administering or enforcing the law, and therefore impliedly adopts the interpretation upon re- enactment.With some modifications, the principle can be applied in the present case. Practical interpretation should be accorded greater weight than it ordinarily receives, and can be regarded as presumptively correct interpretation as the draftsmen legislate to bring about a functional and working result.19. We would not read into Regulation 18(15)(c) a need to have affirmative consent of majority of all or entire pool of unitholders. The words all or entire are not incorporated and found in the said Regulation. Thus, consent of the unitholders for the purpose of clause (c) to sub-regulation (15) of Regulation 18 would mean simple majority of the unitholders present and voting.29. The objectors to the e-voting results are sixteen in number and, as per details, they hold 20,02,114.041 units in the six schemes of value of Rs. 8,69,28,507.62. In percentage terms, the share of objectors in the total units is merely 0.024% and their share in the total AUM is 0.033%. (Chennai Financial Markets and Accountability, one of the parties and an objector, does not hold any unit in the six schemes. Trustees/AMC have questioned the locus and the role of CFMA. We are not presently examining the said aspect which is left open to be examined and decided, if required, later.)Though we have not been provided with scheme-wise break-up of the votes which should have been given, it does not matter in view of the overwhelming consent for winding up of the schemes.The rejected votes represent 1,997 unitholders holding approximately 68.10 crore units valued at Rs. 2,464 crores. Further, an overwhelming majority of the rejected votes – Rs. 2,420 crores by value, 98.6% by units and 97.5% by number of unitholders – were in favour of the scheme. Accordingly, if these rejected votes are taken into consideration, the total votes being polled in proportionate terms would increase from approximately 54% to approximately 62%.31. We do not think we are required to go into the said aspect in great detail. As already held above, the unitholders were given a chance and option to vote and about 38% of the unitholders in numerical terms and 54% in value terms had exercised their right to give or reject consent to the proposal for winding up. In the absence or need for minimum quorum, which is not provided or stipulated in the Regulations nor mandated under law, the e-voting result cannot be rejected on the ground that 38% of the unitholders in numerical terms and 54% in value terms, even if we do not account for the rejected votes, had participated. This cannot be a ground to reject and ignore the affirmative result consenting to the proposal for winding up of the six mutual fund schemes.The submission being that KFin Technologies is an associate/sister of M/s. Karvy Stock Broking Limited. This company, M/s. Karvy Stock Broking Limited, indicted by an adverse order dated 24th November, 2020 under Sections 11(1), 11(4) and 11B of the SEBI Act read with Regulation 35 of SEBI (Intermediary) Regulations, 2008, is barred from accepting new clients on grounds of investor fraud, falsification of records of investors/clients and misuse of client funds.33. This argument does not impress us and cannot be a ground to reject the results. KFin Technologies, it has been pointed out, has been providing e-voting platform services to listed public limited companies ever since the Ministry of Corporate Affairs mandated them to secure approval of the resolutions by the shareholders through electronic voting. The e-voting platform of KFin Technologies is certified by the Ministry of Corporate Affairs approved certification agency, viz. STQC Website Quality Certification Services. KFin Technologies has conducted more than 4,500 e-voting events since 2013. To reject the voting results on this rather specious submission would cast doubts with serious repercussions on e-voting results of several reputed companies. The objectors are unable to point out even a single instance where KFin Technologies has been indicted. In the present case, the e-voting exercise was also supervised by a team of technical experts, including Mr. M. Krishna and Mr. Ch E. Sai Prasad, Assistant Directors, CFSL, Hyderabad.35. The trustees/AMC and KFin Technologies have disputed paragraph 5 of the report stating that database monitoring logs were provided to the forensic experts. However, we need not go into the said aspect, for, in our opinion, paragraph 4 of the report is being misread and misunderstood by the objectors. It is correct that for some of the votes, the IP address 10.41.3.252 as captured was that of the Load Balancing Server of KFin Technologies. However, the report also records that KFin Technologies has explained that due to technical or implementation issues it was able to capture public IP address of e- votes after 1231 hours on 26th December, 2020. Paragraph 4 states that details of the customers, scheme-wise, where the same IP address has been logged for multiple e-votes, had been provided to the forensic experts. Clearly, the details of each customer /unitholder where one or same IP address was used for casting multiple votes was furnished. It is not the case of the objectors that any of the unitholders/voters have complained of impersonation or misuse of their identity. KFin Technologies has explained that in total 1,17,416 votes were registered in the system. The source IP address was captured in 88,293 cases. In 29,123 cases, votes with Load Balancing Server IP was captured in the IIS logs for which end-user IP report in the firewall between 26th December 2020 (09:00 a.m. till 12:31 p.m.) was available. They have, by way of data flow diagram, elucidated and explained the e-voting platform. The e-voting platform on valid login would issue a one-time password which would be sent via e-mail or SMS to the unitholder. This one-time password was randomly and automatically generated without human intervention. The unitholder was required to enter the one-time password and thereupon cast their vote. After the vote was cast, acknowledgement/ confirmation e-mail/SMS was sent to the registered voters ID/mobile number. Further, the data stored in the database was one-way encrypted. E-voting window was not open and the application would not allow the user or the unitholder to enter any details. Importantly, the Observers report mentions that before the e-voting, a thorough examination of the system was done by the experts. The report (Annexure-11) records that to check, 0.5% of the votes were selected randomly and on verification, e-logs were matched with the master database. Further on examination and analysis of the event logs of the two web servers no abnormal events were witnessed, indicating normal functionality of the system. We are satisfied with the explanation given by the trustees/AMC and KFin Technologies with reference to the observations in the report of the forensic experts from CFSL.37. At the first blush there does appear to be merit in the contention, albeit the notice for e-voting and meeting of the unitholders has to be read in entirety. We must also account for the history leading to the e-voting process. It is but obvious that the trustees had already taken a decision to wind up the six schemes. Regulation 39(3) requires the trustees to disclose the circumstances leading to winding up of the schemes. The trustees accordingly, in the notice for e-voting and meeting of the unitholders, had furnished their explanation and reason for winding up of the six schemes37. At the first blush there does appear to be merit in the contention, albeit the notice for e-voting and meeting of the unitholders has to be read in entirety. We must also account for the history leading to the e-voting process. It is but obvious that the trustees had already taken a decision to wind up the six schemes. Regulation 39(3) requires the trustees to disclose the circumstances leading to winding up of the schemes. The trustees accordingly, in the notice for e-voting and meeting of the unitholders, had furnished their explanation and reason for winding up of the six schemesand had also stated as under:The Trustee is providing the following explanation to help Unitholders assess the pros and cons of the voting options available to them. There can be no guarantee that the outcomes will be exactly as the Trustee expects. We urge Unitholders to carefully consider the following and seek appropriate advice and guidance in making this important decision.The controversy relating to winding up of the six mutual fund schemes has been in the public domain for a long time. The court would also take judicial notice that the unitholders were aware and conscious of the litigation against the winding up, including the procedure. At the same time, many in the general public may not be fully aware of the commercial considerations and niceties relating to mutual funds and debt securities market. This is the precise reason why most people do not make direct investment in the securities market and prefer mutual funds. Further, the trustees had earlier vide document No. 16 (enclosed at pages 1253 to 1255 in the appeal arising out of Special Leave Petition (C) No. 14288 of 2020) communicated the reasons for their decision to wind up the six schemes. The relevant portions this notice read as under:The unprecedented lockdown of the Indian economy in the wake of Covid-19 has impacted livelihoods and businesses across the country. Despite several measures by the Reserve Bank of India (RBI), the liquidity in certain segments of the corporate bond markets has fallen-off dramatically and has remained low for an extended period.In this scenario, mutual funds are facing unprecedented liquidity challenges due to a variety of factors – rising redemption pressures due to heightened risk aversion, mark to market losses following a spike in yields and lower trading volumes in the bond markets. These factors have together caused a significant and worsening liquidity crunch for open-end mutual fund schemes investing in corporate credits across the credit rating spectrum.Important Announcement: In this situation, we find that the ability to liquidate assets at a reasonable price to fund redemptions for the schemes identified below is under severe stress and it is no longer possible for certain schemes of Franklin Templeton to generate adequate liquidity to fund daily redemptions. Accordingly, we wish to inform you, that the Trustees of Franklin Templeton Mutual Fund in India have, after careful analysis and review of the recommendations submitted by Franklin Templeton AMC, and in close consultation with the investment team, voluntarily decided to wind up its suite of six yield-oriented fixed income funds, post cut-off time from April 23, 2020 (refer to Annexure I- Notice to Investors) as they are of the considered opinion that an event has occurred, which requires these schemes to be wound up. This decision has been taken in light of the severe market dislocation illiquidity caused by the Coid-19 pandemic, and in order to protect value for investors via managed sale of the portfolio. The list of schemes being wound up is as follows:1. Franklin India Ultra Short Bond Fund (FIUBF)2. Franklin India Short Term Income Fund (FISTIP)3. Franklin India Credit Risk Fund (FICRF)4. Franklin India Low Duration Fund (FILDF)5. Franklin India Dynamic Accrual Fund (FIDA)6. Franklin India Income Opportunities Fund (FIIOF)Factors leading to Winding-Up: The impact schemes of Franklin Templeton were able to meet their redemption obligationacross all market conditions and even during the initial phase of the Covid-19 pandemic lockdown despite redemption pressures and increased market illiquidity. However, the extension of the lockdown has heightened redemption volumes and reduced inflows to unsustainable levels. The schemes even resorted to borrowings within permissible limits in line with market practice to fund redemptions during this time but given the situation, we felt that it would not be prudent to leverage the schemes further. While the respective valuations of these schemes have been marked promptly and conservatively thus far, continuous redemption pressures in the backdrop of a severe dislocation in the corporate bond markets would place great strain on our ability to ensure equitable treatment of all investors.Further, given the current unprecedented situation even the committed borrowing lines maintained by the funds are inadequate to meet the demand for sustained narrowing across the schemes.We explored the possibility of suspending redemptions until market conditions stabilize without winding up the schemes. However, conditions for such a suspension under the current regulatory framework, such as a maximum suspension period of 10 working days (in 90 days) and the requirement to honour redemptions up to INR 2 lakh per day per investor, rendered this approach unviable to meet the severe sustained impact of the current crisis (refer Annexure III-FAQ for options considered besides winding up).The Trustees were hence left with no option except to initiate the winding up of the schemes with a view to protect the interests of unitholders, Winding up the schemes was determined to be the best way to ensure a fair and equitable distribution of monies to unitholders while minimizing erosion in value for investors.It is also the contention of the trustees that they were required to justify and explain the reasons for winding up of the six schemes and hence the notice was worded in this manner. The notice had also informed the investors that there would be suspension of subscription and redemption post the cut-off time from 23rd April, 2020. All Systematic Investment Plans, Systematic Transfer Plans and Systematic Withdrawal Plans into and from the above- mentioned funds stood cancelled post the cut off time from 23rd April, 2020. The notice had also furnished information and clarification regarding distribution of monies from the Fund Assets, inter alia stating that following the decision to wind up the six schemes, the trustees would proceed for orderly realization and liquidation of the underlying assets with the objective of preserving value for unitholders. Their endeavour would be to liquidate the portfolio holdings at the earliest opportunity, to enable an equitable exit for all investors in the unprecedented circumstances. We do not think, in the facts of the present case, the notice for e-voting and the contents would justify annulling the consent given by the unitholders for the winding up of the six schemes.38. We will now refer to and deal with some of the other objections to the consent/e-voting results which, in our opinion, are merely assertions, or at best minor irregularities, which do not have any substance.39. These contentions are mere nitpicks and would hardly justify rejection of the consent to winding up which has been expressed by more than 95% of the unitholders who had voted. Mr. T.S. Krishnamurthy was appointed as the Observer by SEBI in view of the directions given by this Court to ensure fairness and transparency. He was not to conduct the meeting or the process, but only to oversee and give his report on the entire process. Being an independent observer, his observations and comments vide the report would help resolve any debate, doubt or questions. The observer is the eyes and ears, which the Court could rely. Mr. T.S. Krishnamurthy in his report has mentioned that many calls, messages and e-mails were received by him expressing difficulty in voting, non-receipt of passwords and difficulty in reaching the helplines. He had, therefore, conveyed these messages to the trustees and KFin Technologies. Based on the response, the number of helplines were increased. Missed calls were returned and answered. The Observers report vide Annexure-10 refers to the complaints/calls made to Mr. T.S. Krishnamurthy and also records that these were redressed. No unitholder has expressed or stated that they could not vote or their queries were not answered. Absence or lack of digital signatures on the notice is a technical and not a substantive objection. Moreover, the trustees have explained that in view of the objection raised by the Technical Assistance Team, Mr. Alok Sethi had digitally signed a copy of the notice for the purpose of the record. This digitally signed notice was made available to the Technical Assistance Team. M/s. J. Sagar and Associates and KFin Technologies had been earlier appointed by the trustees possibly for compliance of clause (c) to Regulation 18(15) of the Regulations. Agreements earlier in point of time with KFin Technologies and M/s. J. Sagar and Associates would not, in any manner, be an irregularity. Further, Mr. T.S. Krishnamurthy was not to himself count the votes as this exercise had to be undertaken essentially by the Scrutiniser, M/s. J. Sagar and Associates. To conduct the e-voting, for the purpose of consent, the trustees had engaged services of KFin Technologies and M/s. J. Sagar and Associates. M/s J. Sagar and Associates being a law firm, it is obvious, are not experts in information technology. Necessarily, they would rely on the data and details made available by KFin Technologies. We have already dealt with the question of integrity and authenticity of the e-voting data and that it was checked by two technical experts who are Assistant Directors at CFSL, Hyderabad. The comments of the forensic experts have been examined and considered in detail.40. In the present case, we do not think the procedure prescribed by Regulation 4117 is required to be followed as the trustees themselves have stated that the process of winding up, which would include liquidation of the securities and distribution/payment to the unitholders, should be undertaken by a third party. The objectors had also made similar submissions.41. As per the consolidated affidavit filed by the trustees and AMC, securities equivalent to more than Rs.17,000 crores are yet to be realised. This is a substantial amount. The trustees and SEBI were not at ad idem and have given different time frames within which they felt the securities can be liquidated. However, both the trustees and SEBI, have stated in unison that the liquidation/realisation has to be proceeded with caution, as an attempt to offload the securities in haste can result in losses which would be detrimental and cause reduction in realisable value.We would not like to enter into this debate or give any specific directions but would observe that M/s. SBI Funds Management Pvt. Ltd. shall follow the best effort principle so as to ensure expeditious and timely payment to the unitholders and assure the best possible liquidation value of the assets/ securities to the unitholders. However, we have no hesitation in directing that distribution/disbursement of funds to the unitholders can be made in tranches without waiting for liquidation of all the securities/assets.42. In view of the aforesaid discussion, we hold that for the purpose of clause (c) to Regulation 18(15), consent of the unitholders would mean consent by majority of the unitholders who have participated in the poll, and not consent of majority of all the unitholders of the scheme. In view of the findings and reasons stated above, we reject the objections to poll results and hold that the unitholders of the six schemes have given their consent by majority to windup the six schemes.