NEW DELHI: Sahara group has argued in the Supreme Court that contempt proceedings should not be initiated against its promoter Subrata Roy and directors for its failure to pay back about Rs 24,000 crore to investors through market regulator Sebi.
The group’s lead counsel Ram Jethmalani on Tuesday , August 6, 2013 argued that civil contempt proceedings did not apply to this case since Sebi had not alleged or shown that Sahara had wilfully failed, or even neglected, to comply with the directions.
Sebi’s counsel Arvind P Datar had earlier pressed the court for action against Roy and the directors for failing to pay back the money collected from investors in two group companies. Datar had demanded action against Roy under the Sebi Act and the Companies Act, which attract imprisonment as well as Rs 25 crore in fines. “He (Roy) cannot get away by claiming now that he has nothing to do with the company,” Datar said while pressing for contempt proceedings as well, arguing that Roy was guilty of both wilfully disobeying the court’s orders and violating the group’s undertakings to the top court.
Sahara has paid only Rs 5,120 crore so far despite an extension granted by another apex court bench to pay up the amount in tranches by Feb, 2013. The group had claimed that it had refunded the rest of the amount to investors directly in violation of the top court’s order of August 31, 2012 to pay the money to Sebi to be returned to the investors.
Jethmalani argued that the entire contempt petition must fail if fails on even one count of alleged breach of undertaking. He also argued that the court should only take into account those facts that subsisted before the filing of the contempt petition.
Sahara had delivered more than 127 truckloads carrying 35,000 cartons of documents to Sebi as directed by the court, Jethmalani said, citing this as evidence that the group had not wilfully disobeyed the court’s directions.
Jethmalani also argued that the group did not undertake refunds in contravention of the apex court’s orders since even in the past the Securities Appellate Tribunal and the Supreme Court had acknowledged that redemptions had been made by Sahara.