Denied parole, Subrata Roy gets one week to surrender

SC move comes in the wake of Sebi submission that properties on auction were already under I-T attachment

In a day of dramatic developments, the Supreme Court terminated the parole and other interim arrangements allowed to Sahara chief Subrata Roy after the Securities and Exchange Board of India (Sebi) informed the court that it had received intimation from the Income Tax (I-T) department that the group’s properties that were being put on auction were already under provisional attachment by the I-T department.

Similar arrangements extended to two other group executives – Ashok Roy Choudhary and Ravi Shankar Dubey – were also covered by the order. The court took exception to the conduct of Sahara counsel Rajeev Dhavan, during proceedings, who termed the order “unfair” and one passed in “temper”.

Later in the day, Roy offered an unconditional apology for Dhavan’s conduct and sought the recall of the order cancelling his parole even though Dhavan stood his ground.

Appearing for Roy, senior counsel Kapil Sibal told the Bench headed by Chief Justice of India T S Thakur: “I apologise, offer unconditional apology. It will never happen again, I assure you...”

As Sibal offered the apology, Thakur said: “We don’t enjoy such things, but there has to be a limit.”

The court did not recall the order, but allowed a week’s time for contemnors to surrender and fixed the date of hearing on September 28.

This effectively means Roy and his colleagues would get another chance to be heard before the termination of parole takes effect, according to lawyers involved in the case.

Roy was released on a two-week parole in May to attend the funeral of his mother. He had since been allowed a few extensions on conditions of payment of part-dues. Two group firms – Sahara India Real Estate and Sahara Housing Invest – were ordered to repay Rs 24,029 crore to investors along with 15 per cent interest in 2012. The regulator claims the dues have now swelled to about Rs 40,000 crore.

Even as various efforts by Roy and his group to repay the sum continued, the Supreme Court directed Sebi to auction 67 properties to collect the amount due.

However, according to Sebi’s submissions on Friday at the hearing which was advanced to 10.30 am from the originally scheduled time of 2 pm, of the 67 properties of Sahara Group that are being put on auction according to the court’s directions, 63 stood provisionally attached on account of assessed dues of Sahara City Homes for the assessment year 2012-13.

“Sebi said it has filed an IA (interim application) informing about the income tax letter and seeking directions on whether sale certificates need to be issued despite the attachment orders. It said even out of the eight properties already sold, five are under attachment,” said a lawyer, who attended the proceedings. Sahara lawyer Rajeev Dhavan protested that the regulator has not shared the details of attachment.

Following this, the Bench ordered the interim arrangements for Roy and others terminated. Thakur questioned the group how it could present properties already attached for auction to the court. It allowed Sebi to issue sale certificates only to those properties where there is no attachment order.

In a handwritten statement circulated later, Dhavan said, “The CJI was convinced that Sahara’s parole should be continued because Rs 300 crore had been deposited. Meanwhile, Sebi reported that they wanted confirmation for the sale and I requested that I may get the papers and file a response (on instructions from my instructing counsel). The chief justice’s response: ‘We will send your clients back to jail.’ This had nothing to do with my request. The chief justice lost his temper and passed an order ordering my client back to jail. I remonstrated that he had passed the order in temper and this was not fair.” Passing an order in temper, especially when all conditions are fulfilled, is both inappropriate and unbecoming, Dhavan noted.