NEW DELHI: The Supreme Court on Monday sought to know how the Sahara Group was refunding money directly to investors while warning against attempts to override its order.
On August 31, 2012, the court had asked Sahara — whose business interests range from realty to retail — to return Rs 24,000 crore within three months to investors in two schemes via Sebi. These funds had been collected by two group firms.
Sahara later approached another bench of the top court, headed by Chief Justice Altamas Kabir and received a further extension of time to deposit the money. In an order issued on December 5, 2012 that bench had told Sebi to accept a sum of Rs 5,120 crore.
Two installments of Rs 10,000 crore each were to be paid by Sahara to Sebi by the first week of January and February, respectively. Sahara, however, failed to meet this deadline. It is seeking more time to deposit this amount, but the original bench, comprising Justices KS Radhakrishnan and JS Khehar, has not allowed this so far.
Sebi has since filed two applications, one seeking contempt of court action against Sahara for not abiding by the order and the second seeking civil detention of three Sahara directors, including Chairman Subrata Roy, to get the company to pay up. These applications from Sebi were heard by the original bench on Monday.
At the outset, Sebi counsel Arvind P Dattar told the court that Sahara was talking in different voices at different fora. The company had told the top court that it had paid all investors whereas it gave out a different version to another forum, he said.
Dattar said that Sahara told another forum that the money collected was invested in various companies and schemes and that the funds could be brought back at any time. They (Sahara) have told the Securities Appellate Tribunal (SAT) that they have sold off these assets to pay investors, he charged.
The bench then accused Sahara of trying to manipulate its orders. It is “pretty strange” that you went to Sebi seeking extension of time given by the top court and then went to SAT, the bench observed.
“You are manipulating the court,” Justice Khehar told Sahara. Sebi also pointed out that Sahara had also moved the Allahabad High Court as well at one point against an order to attach the properties of Sahara owner Roy and accused it of resorting to various ruses to avoid complying with the top court order.
Roy’s counsel C A Sundaram objected to Sebi attaching Roy’s personal property, but justice Khehar shrugged it off. “If you have approached the HC, then it is contempt of this court. You are not cooperating with Sebi and you are not complying with our orders…. You must rectify your mistakes instead of repeating them,” he said.
Justice Radhakrishnan also said: “If your attempt is to overeach the orders of this court, it is contempt. Sebi has its obligations to fulfill.” Sundaram also claimed that papers relating to all investor claims had been furnished to Sebi, a claim Dattar contested.
Dattar said that different documents were supplied at different fora. But the bench said that it was not Sebi’s job to trace depositors. If documents were not supplied and the depositors could not be traced, the money should go to the government, Justice Radhakrishnan said.
At one point, the court seemed inclined to ask Roy’s counsel to give an assurance that he would not leave the country, but did not ultimately do so. The court was, however, very sarcastic when Sundaram sought more time for Sahara to file a reply to Sebi’s contempt plea.
“You sought time last time. Since then a couple of months have passed. Do you sit and relax when (court) notice is issued?” The bench ultimately gave Sahara time till April 29 to reply to the Sebi’s plea of contempt and also the directors to reply to Sebi plea to detain them under civil laws and listed the case for hearing on May 2.