SC refuses to grant more time to Sahara to refund Rs 24,000cr

The last hope of Sahara group to get more time to refund Rs 24,000 crore to its investors was today dashed in the Supreme Court which dismissed its plea and pulled it up for not complying court's earlier order to return the money by first week of February.

A bench headed by Chief Justice Altamas Kabir, which had earlier extended the deadline to two companies of the group for refunding the money from November end to first week of February, refused to grant more time.

"If you have not refunded the amount as per our order then you have no business to come to court," an angry Chief Justice said adding that it had earlier granted time only to ensure that investors get their money back.

Two companies of Sahara group--Sahara India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation (SHIC)--who along with Sahara Chief Subrata Roy are facing contempt proceeding in the apex court before another bench which had on February 6 allowed SEBI to freeze accounts and seize properties of its two companies for defying court orders by not refunding the money to investors.

As soon as the matter was taken up for hearing the Supreme Court Bar Association President M Krishnamani stood up and objected that the bench headed by the CJI should not hear the case as the order for refunding the amount to investors was passed by another bench.

"As a Bar leader I have to say keeping with the tradition of this court and this bench should not have heard this matter and the matter should go to the same bench for the modification of the order. Instead of going to hear, the proper recourse would be for the other bench to hear it. I am at pains to hear different types of rumours," he said.

Justice Kabir then got angry and said that he is making statements without knowing anything about the case and asked him to sit. "How do you know what is going to happen in the case. If something happens then you say. Kindly take your seat," he said.

A bench headed by K S Radhakrishnan had on August 31 last year directed the two companies to refund around Rs 24,000 crore to their investors within three months with 15 per cent interest per annum for raising the amount from its investors in violation of rules and regulations.

But the case was later on heard by a bench headed by Chief Justice Kabir which had on December 5 granted nine weeks time to the group to refund money to its three crore investors in its two companies, with an immediate upfront payment of Rs.5,120 crore.

At that time also SEBI and an association of investors urged the CJI to refer the case to Justice Radhakrishnan bench but Justice Kabir turned down their plea and passed the order keeping in mind "interest of investors".

SIREC had collected Rs.19,400.87 crore on March 13, 2008 and SHICL had collected Rs 6,380.50 crore. But the total balance on August 31 is Rs 24,029.73 crore after premature redemption.

The group might have to fork out around Rs 38,000 crore as of now which includes the principal amount of Rs 24,029.73 crore and interest of around Rs 14,000 crore.

The Sahara group, on the other hand, justified its stand on not refunding the amount and said that large portion of the amount has already been redeemed to investors before the judgement was delivered.