SC seeks response from Sahara on SEBI's plea

New Delhi, April 22 (IANS) The Supreme Court Monday directed Sahara chief Subrata Roy and directors of the group's two real estate firms to file their reply to market regulator SEBI's plea to place them under civil detention for their failure to comply with August 2012 order to return investors money.

The Securities and Exchange Board of India (SEBI) has charged the three with failure to carry out the apex court's direction to provide it (SEBI) all the information for refunding Rs.24,000 crore that Sahara has mopped up from investors through optionally fully convertible debentures, and sought that they be placed under civil detention.

A bench of Justice K.S. Radhakrishnan and Justice Jagdish Singh Khehar also sought response on SEBI's plea seeking direction that the three be directed to deposit their passports with the secretary general of the apex court.

The court also asked the two real estate companies to respond to SEBI's contempt petition in a week's time, but also pulled it up for not responding yet. Justice Khehar said, "You sought time last time. Since then couple of months have passed. Do you sit and relax when notice is issued?"

The Sahara groups' two real estate companies - Sahara India Real Estate Corporation Ltd. (SIRECL) and Sahara Housing Investment Corporation Ltd. (SHICL) -- were Aug 31, 2012 directed by the court to return Rs.24,400 crore of investors' money with 15 percent interest.

Directing the listing of the matter for May 2, the court asked Roy and the two directors Ravi Shankar Dubey and Ashok Roy Choudhary to file their reply to SEBI's plea by April 29.

In an obvious indication that its patience was running out over Sahara group's resistance to comply with its order, Justice Radhakrishnan said: "If attempt is to override the order of this court, we will take a very serious view."

"Where is the direction by this court to refund the money to investors directly by Sahara," Justice Radhakrishnan asked as senior counsel Arvind Dattar, appearing for SEBI, told the court that Sahara group was taking conflicting positions on the status of investors' money before different forums.

Pulling up Sahara for "manipulating" the court by resorting to multiple litigation, the court said that it was "pretty strange" that it went to SEBI for seeking extension of the given by the apex court and then approach the Securities Appellate Tribunal (SAT) to seek further extension of time.

"You are manipulating the court," Justice Khehar told the Sahara counsel when the court was told that Sahara had moved the Allahabad High Court against the SEBI order.

The court's indictment of Sahara's tactics came as it was told that even after the expiry of Feb 7 deadline of the extended time given by the apex court by its Dec 5 order, Sahara was resorting to every means to avoid compliance of its order.

In the Dec 5 order, an apex court bench headed by Chief Justice Altamas Kabir, while directing the SEBI to accept it Rs.5,120 crore from Sahara, asked it to deposit a sum of Rs.10,000 crore in the first week of January 2013 and the balance amount in the first week of February.

As Sahara's counsel told the court that the high court was approached because besides four directors of two real estate companies, Sahara India too was being indicted by the SEBI, the court inquired if none of the directors in Sahara India and its two real estate arms were common and unaware of the apex court's order.