NEW DELHI: The Supreme Court on Monday refused to grant more time to the Sahara group to refund Rs.24,000 crore to investors who bought securities sold by two group firms. The court also pulled up the group for not complying with its earlier order to refund investors by the first week of February.
“If you have not refunded the amount as per our order then you have no business to come to court,” the chief justice said, adding that the court had earlier given the group companies additional time only to ensure that investors got their money back.
Sahara India Real Estate Corp. (SIREC) and Sahara Housing Investment Corp. (SHIC), along with Sahara chief Subrata Roy, are facing contempt proceedings in the apex court before another bench, which had on 6 February allowed the market regulator Securities and Exchange Board of India (Sebi) to freeze accounts and seize properties of the two companies for defying the court’s orders by not refunding investors.
As soon as the matter was taken up for hearing on Monday, Supreme Court Bar Association president M. Krishnamani said the bench headed by the chief justice should not hear the case as the order for refunding investors had been passed by another bench.
He said the “proper recourse would be for the other bench to hear it.”
Justice Kabir said Krishnamani was making a statement without knowing anything about the case and asked him to sit down. “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 31 August directed the two companies to refund Rs.24,000 crore to their investors within three months with 15% interest per annum for raising the money in violation of rules.
But the case was later heard by a bench headed by chief justice Kabir, which on 5 December granted nine weeks to the Sahara group to refund the money to some 30 million investors in the two companies, with an immediate upfront payment of Rs.5,120 crore.
At that time too, Sebi and an association of investors urged the chief justice to refer the case to the bench headed by Radhakrishnan, but Kabir turned down their plea and passed the order keeping in mind the interest of investors.
SIREC had collected Rs.19,400.87 crore from investors as of 13 March, 2008 and SHIC Rs.6,380.50 crore. The total balance on 31 August was Rs.24,029.73 crore after premature redemptions.
The group might have to fork out around Rs.38,000 crore, which includes the principal amount of Rs.24,029.73 crore and interest of around Rs.14,000 crore.
The Sahara group has said that a large portion of the amount had been paid to investors before the court ruling was delivered.
Sahara has filed a defamation case in a Patna court against Mint’s editor and some reporters over the newspaper’s coverage of the company’s disputes with Sebi. Mint is contesting the case.