SC unconvinced by Subrata Roy's assurances

The Supreme Court was Tuesday unimpressed by Sahara chief Subrata Roy's repeated attempts to persuade it that his firm would pay to SEBI the balance of the money that its two companies had collected through optionally fully convertible debentures.

At the outset of the hearing, Roy tendered unconditional apology to the court telling the bench of Justice K.S. Radhakrishnan and Justice J.S. Khehar that his absence on Feb 26 was for a genuine reason.

The court responded that it accepted his statement and presence in the court.

At another point, Roy said that he wanted to honour the order of the court and assured it that there were no factitious accounts.

Justice Khehar, however, took strong exception to him telling the court that his firm will start selling properties from Wednesday and pay the money to "you" along with the bank guarantees. Apparently displeased, Justice Khehar said: "Don't use the words (you for the court) that you will give to us."

"You are not giving to us but to SEBI so that it could be returned to investors," he said.

Senior counsel Ravi Shankar Prasad, Rajiv Dhawan and Ram Jethmalani came to the rescue of Roy telling the court that he was not trained to address the court.

The apex court Aug 31, 2012, had ordered the Sahara group's two companies - Sahara India Real Estates Corporation Limited and Sahara Housing Investment Corporation Limited - to deposit with the Securities and Exchange Board of India (SEBI) Rs.24,000 crore that it had collected through OFCD so that the market regulator could return it to investors.

In December 2012, Sahara had deposited Rs.5,120 crore with SEBI.

Roy told the court that since its inception, Sahara has paid more than Rs.160,000 crore to investors and assured the court that all money of the investors will be paid. "I say with my folded hands that we will pay. Not a single complaint is there."

Praising his company for having done a "magnificent" job, Roy told the court that his investors were small people like rickshaw pullers and cobblers who pay their money in cash and expect it back in cash.

"That is the class we are dealing with. They say we pay in cash, we want return in cash," he said.

Addressing the court's concern that investors were fictitious, Roy said he respected their concerns but questioned SEBI for not verifying the documents submitted by his firm.

"Is it the way the regulator should behave with normal citizens?"

The court asked Roy to take his seat as he tried to intervene during the submission by SEBI's senior counsel Arvind Dattar.

At one point, the court asked Roy that although Sahara had maintained that they were not obligated to return the investors' money till it matures, then why did they pay it back in May-June 2012.

Taking the court through the entire sequence of events then, Roy told the court that thousands of Sahara workers contributed from their pocket so that investors could be returned their money.

"If you hear our story you will love us," he told the court. Not impressed, the court retorted: "We will love you if you pay the investors' money. We will love you if you obey the rule of law. We will love you if you comply with our judgment."