SC reserves order on issues relating to Sahara chief's release

The Supreme Court today reserved its order on various aspects relating to release of Sahara Chief Subrato Roy from jail saying it would decide how more money has to be paid and as to when SEBI may encash the bank guarantee in future.

A three-judge bench headed by Justice T S Thakur, while reserving the order, asked the counsel of Sahara Chief to furnish the "scheme" within two weeks giving details as to how the group proposes to proceed with the sale of its assets and payment to the SEBI.

The apex court on August 31, 2012 had said the group was required to refund Rs 24,000 crore with 15 per cent interest in three months to the depositors.

It had on March 26, 2014 asked 65-year-old Roy, who has been in Tihar Jail since March 4, 2014, to pay Rs 10,000 crore to get bail, out of which Rs 5,000 crore should be paid in cash and rest in bank guarantees.

During the hearing today, a battery of senior lawyers led by Kapil Sibal sought release of Roy from jail saying that he will by submitting a scheme on repayment in July and he can be sent back he defaults.

"As a goodwill gesture, please release him. Please give six weeks time to him and he be sent back to jail if he does not do the needful," Sibal said, adding "keeping him in jail does not serve any body's purpose".

"Please do not feel that we are insensitive... and for last 16 months, we had been asking your client about the payment of money," the bench, also comprising justices A R Dave and A K Sikri, said.

The counsel for Sahara also sought an order from the court that it be allowed to sell 72 properties attached by the SEBI.

"Tell us which property you (Sahara) want to sell," the bench, which also sought to know the views of SEBI on the issue, said.

At the outset, the bench, after being shown the format of bank guarantee to be furnished by the Sahara Group, posed a query as to what will be the "trigger" or the "situation' when SEBI may proceed with the encashment of bank guarantee.

"The question is when can the bank guarantee  be encashed? What will be the trigger and when and how you (SEBI) can seek encashment of bank guarantee. What is the default that will force you encash the bank guarantee," the bench said. PTI SJK RKS VSC 05142034

The bench then asked senior advocate Arvind Datar, who is appearing for SEBI, as to whether the amount to be paid by Sahara firms to the investors have been quantified or not.

Referring to the orders passed by the apex court, Datar said the money has been quantified and it is around Rs 25,000 crore, excluding the interest and "the theory of redemption or the plea of Sahara that most investors have been paid back has been rejected by the court."
However, the counsel for the Sahara opposed the submission of SEBI and said that this issue has been left open and a fair procedure needs to be adopted verify the redemption claim.

"Your (Sahara) redemption plea has been rejected and it has been said on no uncertain terms," the bench said, adding the group will have to pay SEBI first and it can later seek recovery on furnishing proofs of redemption.

"We will give you reasonable time and will not allow (SEBI) to pull the trigger right now," it said.

"This is not an ordinary case and its a case of its own kind. This man is in jail for the last 16 months...how do you ensure that money is recovered...," the bench said.

Later, SEBI also said that it has no objection if the 72 properties, attached by it, is being released by the apex court and payment of dues is ensured.

Meanwhile, the Income Tax department also told the court that the group owes over Rs 7,000 crore and an appeal is pending in the Income Tax Appellate Tribunal.

Earlier, the court had said that there was a need to resolve the dispute over the total amount which Sahara Group was liable to pay to its investors even if the group complied with the condition of paying Rs 10,000 crore to ensure the release of Roy from jail.

The issue of payment of balance amount had arisen as the claim of Sahara refunding the amount has been disputed by SEBI maintaining that there have been contradictions on refund theory by Roy's group and even the apex court in the past had not agreed to it.

The apex court had on March 23 expressed "prima facie satisfaction" and granted three months time to Sahara Group for selling its offshore properties for raising Rs 10,000 crore to ensure the release of Roy.

The bench had said in the eventuality of failing in negotiations, its properties would be put to auction by appointing a 'court receiver' for alienating its assets.

The court had also extended its August 1, 2014 order allowing Roy to use the conference room in Tihar jail complex to hold negotiations with potential buyers to sell his three luxury hotels--Dream Downtown and The Plaza in New York and Grosvenor House in London--to raise Rs 10,000 crore to get regular bail.