SC frowns on Sahara's claim on refunds

Group claims bulk of Rs 24,000 crore has already been refunded; next hearing on August 26

The Supreme Court on Tuesday observed that the Sahara group’s claims of having refunded the larger part of the amount collected through their optionally fully convertible debentures was “extremely difficult to believe”.

“Have you made any affidavit? If you have made an affidavit or averment before us (before the order), that was the end of the matter. We would have accepted that. You have not brought it to our notice,” judge K S Radhakrishnan said when Sahara counsel Ram Jethmalani averred the two group companies in question had refunded Rs 19,127 crore or 74 per cent of the Rs 25,781 crore raised. The court later adjourned the hearing to August 26.

The SC had in an order dated August 31, 2012, directed refund of Rs 24,029 crore collected by Sahara India Real Estate Corp and Sahara Housing Investment Corp, after accounting for premature refunds of Rs 1,751 crore.

The group now claims the premature refund figure of Rs 1,751 crore was up to August 2011. And, further refunds were made even as the court battle was on and this figure rose to Rs 19,127 crore when the SC order came a year later. Of this, Rs 14,614 crore was refunded by Sahara India Real Estate and Rs 4,513 crore was refunded by Sahara Housing Investment, said Jethmalani.

Earlier, he argued a particular direction in the SC order made the group believe the refunds could be made directly. “We came to the court complaining of the Sebi, SAT (the capital markets regulator and its appellate tribunal) order directing payment to investors. Having lost, I thought I have to pay. That is how I construed direction number 1 in the light of direction number 2,” the lawyer, said adding “my construction may be less probable but it’s possible”.  

The bench appeared unconvinced. “It is a simple construction,” judge J S Khehar said. When Jethmalani suggested there was an element of ambiguity in the order, Khehar noted it had directed submission of documents within 10 days. If you had deposited within 10 days, the other questions would not have arisen, the judge said.

The Sahara counsel then started explaining how difficult it was to transport documents that ran into “26 crore pages”, that came to 127 trucks from Lucknow to Mumbai.

Judge Radhakrishnan said the delay in filing documents dated long before the SC order. “It is happening for three years. It happened before Sebi, then SAT. We are at the contempt stage. This is not the first time.”

Judge Khehar said: “The 10 days (time) has (become) history. Let us go by the directions.”

Earlier, Jethmalani made averments on the contempt law, saying: “Apart from material facts to show wilful disobedience, there must be material facts to show at the present time the respondents have means to pay and still they are in bad faith (refusing to pay).”