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In a jolt to Sahara chief Subrata Roy, the Supreme Court today rejected his plea to put on hold the auction process of the group's Aamby Valley property in Pune district of Maharashtra valued at Rs 34,000 crore.
The apex court told Roy that his proposal of paying Rs 1,500 crore, if the auction process was halted or postponed was allowing it to make a statement "willing suspension of disbelief" (believe the unbelievable).
A bench, headed by Justice Dipak Misra, said the auction process will go on according to the schedule and if Rs 1,500 crore is paid by the contemnor (Roy) into the Securities and Exchange Board of India (SEBI)-Sahara refund account by September 7, then it may pass an appropriate order.
"We are not inclined to entertain the prayer of the contemnor. The prayer is hereby rejected. If any agreement is reached by the group to raise money, then appropriate orders will be passed," a bench also comprising Justices Ranjan Gogoi and A K Sikri said.
During the hearing, senior advocate Kapil Sibal said that the auction process of Aamby Valley which would start with the publication of a notice on August 14, should be postponed at least till September 16 to enable Roy arrange the money.
"Your proposal is making us to make a statement that it is willing suspension of belief", it said.
Sibal said that hotels in New York have been sold and soon money would be coming into the Sahara account after which Rs 1,500 crore would be deposited into the SEBI-SAHARA refund account by September 7, as had been directed by the court.
"Our request is that the auction process for Aamby Valley, which will be initiated by way of publication of a notice should be postponed till September 16, as the value of property will fall drastically once it is put on sale in public domain," Sibal said.
He said that Sahara has been on verge of entering an agreement with a Mauritius-based company to raise money, but for that purpose, the auction process has to be postponed for the time being.
"We are negotiating a deal of subscription agreement whereby an investor will invest 1.67 billion dollars in Aamby Valley out of which around Rs 5000 crore will given to the SEBI-Sahara refund account," he said.
Senior advocate Arvind Datar, representing the SEBI, opposed the proposal of the Sahara chief saying that every time a process starts, the group came up with some objection in order to delay the process.
He said that it was a global auction and interested parties from across the world would participate and Rs 4.4 crore hasd already been spent in initiating the process.
"It will not be approrpiate, if the auction process is stalled," he said and added that according to SEBI's research, the said Mauritius-based company, named by Sahara, did not exist.
To this, the bench said it was not going to pass any order and the auction process would not be stalled or postponed.
It said the group could pursue the negotiation with the investor and the court would pass an order at the appropriate time.
The apex court had on July 25 asked the embattled Sahara chief to deposit Rs 1,500 crore in the SEBI-Sahara account by September 7 and said that it might then deliberate upon his plea seeking 18 months more time for making complete repayment.
The court had simultaneously approved the draft sale notice and terms to dispose of the property prepared by the official liquidator of the Bombay High Court.
"The official liquidator shall publish the sale notice as given by him and the notice shall be published on August 14. The steps which are required to be taken for the publication of the sale notice, are allowed," the court had said.
The Sahara Group had earlier sought 18 months' time to repay around Rs 9,000 crore balance amount of the principal amount of Rs 24,000 crore.
Sibal, however, had said that according to the group, the remaining amount was around Rs 8,000 crore and it had made all efforts to deposit the money.
Roy, who has spent almost two years in jail, has been on parole since May 6 last year. The parole was granted the first time to enable him attend the funeral of his mother. It has been extended since then.
Besides Roy, two other directors -- Ravi Shankar Dubey and Ashok Roy Choudhary -- were arrested for failure of the group's two companies -- Sahara India Real Estate Corporation (SIRECL) and Sahara Housing Investment Corp Ltd (SHICL) -- to comply with the court's August 31, 2012 order to return Rs 24,000 crore to their investors.
Another company director Vandana Bhargava was not taken into custody.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)