Thursday, December 6, 2012

SC orders Sahara to repay deposits in 2 instalments

NEW DELHI, December 5, 2012

The Supreme Court, on Wednesday, gave a breather to the Sahara group by directing it to deposit Rs.5,120 croreimmediately and pay its investors in two instalments, the first instalment of Rs.10,000 crore in the first week of January 2013 and the balance amount, including interest, in the first week of February.

A three-judge Bench of Chief Justice Altamas Kabir and Justices S. S. Nijjar and J. Chelameswar passed this order on a submission made by senior counsel Gopal Subramanimum, appearing for the Sahara group, requesting for more time to repay the amount to the investors —money they had collected through optionally fully convertible debentures (OFCD).

He told the court that Sahara India Real Estate Corporation and Sahara Housing Investment Corporation, the appellant companies, were ready with demand draft for Rs.5,120 crore and he needed more time for repaying the balance amount.

On August 31, a Bench of Justices K. S. Radhakrishnan and J. S. Khehar had directed the group to deposit Rs.17,400 crore with 15 per cent interest with the Securities and Exchange Board of India (SEBI) within three months, which the group did not do.

On Wednesday, the Bench made it clear that if the appellants failed to pay the first instalment (by January next), SEBI could seize their account and recover money in terms of August 31 order. The Bench directed Sahara to submit all the relevant documents to SEBI within 15 days.

Senior counsel Arvind Datar, appearing for SEBI, said since the August 31 order was passed by another Bench, the same Bench should hear the matter. Even as the CJI was dictating the order Mr. Datar wanted the court to record his objections. The CJI retorted and said "We will record what we feel to record. We cannot record what you say." However, the CJI told the counsel since it was a three-judge Bench, it was competent to modify the order passed by a two-judge Bench.

Senior counsel Vikas Singh, who appeared for the Universal Investors' Association, wanted the Bench to take up a writ petition filed on behalf of investors.

The Bench, however, rejected the plea saying since they were not party to the main petition they could not seek review of the order.

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