SC considers hearing SFIO plea over Delhi HC relief to Sahara group firms

The Supreme Court on Tuesday agreed to consider listing for hearing corporate fraud investigating agency SFIO's plea challenging a Delhi High Court order staying the investigation into nine companies related to the Sahara Group.

A bench comprising Chief Justice N V Ramana and Justice Hima Kohli was told by Solicitor General Tushar Mehta that there was some apprehension on the part of the petitioner (SFIO) with regard to another bench recently staying a look out circular against Sahara Group chief Subrata Roy.

The Serious Fraud Investigation Office, a statutory corporate fraud investigating agency, had filed an appeal in the apex court against the December 13, 2021 order of the Delhi High Court staying all subsequent actions and proceedings, including coercive measures and look out notices, against the Sahara group chief and others.

The petitioner SFIO has filed the plea against the final judgement of the Delhi High Court whereby the high court erroneously granted interim relief to Respondents 1 to 3 by staying the operation, implementation and execution of the investigation orders dated October 31, 2018 and October 27, 2020 passed by the Central government and stayed all subsequent actions and proceedings initiated pursuant thereof including coercive proceedings and look out notices issued against the respondents, the SFIO said in an application seeking urgent hearing of its appeal..

The proceedings have been stayed which seriously prejudice the ongoing investigation, it said.

The high court had also stayed the operation and implementation of two orders of the SFIO for investigation into nine companies related to the Sahara Group.

It had said the petitioners Sahara Housing Investment Corporation Ltd and others have made out a prima facie case for the grant of interim relief and the balance of convenience is also in their favour; if the interim relief is not granted, irreparable loss shall be caused to them.

The high court had also issued notice to the Centre and asked it to file response to the petition.

The court stayed the Centre's October 31, 2018 and October 27, 2020 orders.

"... We hereby stay the operation, implementation and execution of the orders dated October 31, 2018 and October 27, 2020, passed by the respondents as well as subsequent actions and proceedings initiated pursuant thereto, including coercive proceedings and look-out notices, qua the petitioners herein, till the next date of hearing," the high court had said.

The petitioners (Sahara firm and others) had submitted that the first order was passed by the Centre on October 31, 2018 for investigation into the affairs of three companies -- Sahara Q Shop Unique Products Range Ltd, Sahara Q Gold Mart Ltd and Sahara Housing Investment Corporation Ltd.

The Sahara firm, in the plea, had said perusal of the October 27, 2020 revealed that no reason has been assigned as to why it was considered necessary that an investigation be made against the six companies -- Aamby Valley Ltd, Qing Amby City Developers Corporation Ltd, Sahara India Commercial Corporation Ltd, Sahara Prime City Ltd, Sahara India Financial Corporation Ltd and Sahara India Real Estate Corporation Ltd.

The petitioners had submitted in the petition that the six companies have never been, at any relevant time, the subsidiary or holding companies of the three other companies already under investigation.

The counsel submitted that only the Securities and Exchange Board of India (SEBI) has the power to investigate these matters but, in this instance, SFIO has been tasked with a probe which again violated the Companies Act.

On May 13 this year, a bench headed by Justice A M Khanwilkar in another matter stayed the direction of the Patna High Court asking Bihar's director general of police DGP to produce Subrata Roy before it on May 16. It was said that some companies of the Group were not returning money to investors.

The apex court had also stayed the separate order passed by the high court which had on February 11 directed to add Sahara Credit Cooperative Societies Limited and Roy as opposite parties to a bail petition pending before it and later, directed him to personally appear before it.