A bench comprising Justice Sanjiv Khanna, Justice M M Sundresh, and Justice Bela M Trivedi stated that a practical solution is needed to refund the investors, as the issue has remained unresolved for over a decade.
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NEW DELHI: The Supreme Court on wednesday (4th Sept) instructed the Sahara Group to provide details of its current leadership, shareholders, and a list of unencumbered properties that can be sold to raise Rs 10,000 crore. This amount must be deposited in the SEBI-Sahara refund account to return investors’ money.
In a 2012 ruling, the court had ordered Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation Ltd (SHICL) to refund the money collected from investors with 15% annual interest, to be paid to SEBI within three months of receiving the subscription amount.
A bench comprising Justice Sanjiv Khanna, Justice M M Sundresh, and Justice Bela M Trivedi stated that a practical solution is needed to refund the investors, as the issue has remained unresolved for over a decade.
This matter cannot be prolonged indefinitely. Over 10 years have passed since the court directed a deposit of Rs 25,000 crore, yet only Rs 15,000 crore has been deposited so far,”
the bench remarked.
“We need to know the current organizational structure, including the names of the directors and shareholders,” the bench remarked, noting that on Thursday (September 5, 2024), the court will first address the issue of property sales, followed by the matter of refunding money to investors.
Justice Khanna also highlighted senior advocate Kapil Sibal’s statement, representing the Sahara Group, that a roadmap for the remaining deposit would be submitted.
The court also requested that senior advocate Shekhar Naphade, serving as amicus curiae, begin his submissions on Thursday (September 4, 2024).
“We need to know the current organizational structure, including directors and shareholders,”
the bench noted, adding that the court will first address the sale of properties before discussing the refund to investors.
“We will review the roadmap submitted by Mr. Sibal, along with previous roadmaps. We also require a comprehensive list of all encumbered and unencumbered properties, excluding Aamby Valley, for appropriate directions,”
the bench added.
The court appointed senior advocate Shekhar Naphade as amicus curiae and instructed him to make submissions the next day. Earlier, the court clarified that Sahara Group is not prohibited from selling its properties to deposit Rs 10,000 crore into the SEBI-Sahara refund account.
The court expressed displeasure over Sahara’s failure to deposit the full amount, stating,
“Sahara Group can sell its properties to deposit the remaining Rs 10,000 crore of the Rs 25,000 crore ordered. The only condition is that properties should not be sold below the circle rate unless prior court permission is obtained.”
In November 2023, Sahara Group chief Subrata Roy, who had previously been ordered by the court to be taken into custody, passed away at a private hospital in Mumbai. Prior to this, SEBI had informed the court that, in accordance with the Supreme Court’s 2012 ruling, Sahara companies had so far deposited Rs 15,455.70 crore, which had been invested in fixed deposits in various nationalized banks.
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As of September 30, 2020, the total amount, including interest, in the SEBI-Sahara refund account stood at Rs 22,589.01 crore.
SEBI also stated that Subrata Roy and his companies, Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation Ltd (SHICL), were in “gross violation” of multiple court orders regarding the full deposit of collected monies along with interest. A contemnor is defined as an individual or entity found in contempt of court.
The market regulator further reported that out of the total outstanding principal liability of Rs 25,781.32 crore, it had recovered only Rs 15,455.70 crore from the Sahara Group and the sale of its properties. “The remaining Rs 10,325.62 crore (principal amount) is still owed by the Sahara Group.
As of September 30, 2020, the total net liability of the Saharas was Rs 62,602.90 crore, factoring in 15% interest as directed by the court in its August 31, 2012 order,” SEBI stated in its 2020 application filed with the court.