Supreme Court slams Sahara group, accuses it of manipulating courts

The Supreme Court (SC) on Monday pulled up the Sahara Group for manipulating the legal process by approaching the Allahabad High Court (HC) on an issue which is being considered by it and for not responding to its notice on a plea by the Securities and Exchange Board of India (Sebi) seeking initiation of contempt proceedings against the company for violating the court order on depositing Rs 27,000 crore collected from investors.

A Bench comprising Justices KS Radhakrishnan and JS Khehar further issued notice on a plea by Sebi seeking go-ahead for taking measures to arrest and detain Sahara promoter Subrata Roy and two directors in civil prison to effect expeditious refund of investors' money as per the directions of the court. The Bench also sought response of Roy and the directors on surrender of their passports.

Expressing displeasure over the company not responding to its notice, the Bench said, "Enough is enough" and sought response to the contempt petition and the new SEBI application within one week. The matter has been posted for hearing on May 2.

The court clarified that money would go to the government if Sebi is unable to locate the investor on the basis of details provided by the company. On Sahara allegedly not furnishing details of investors in a proper format, Justice Khehar said that Sebi should not search for papers. "If Sahara did not give papers to support its claim on refund of the money to investors, the money should go to the government," he added. "If you can find out the investor, fine … otherwise deposit the money with the government."

After Sebi pointed out that the company had deposited 127 truckloads of documents, Justice Khehar further added, "They will take you round the bend. They will never let you finish this." Taking note of the fact that Sahara is seeking extension of time fixed by it from SAT, the Bench said that it is strange that the company went to Sebi and then to SAT for extension of time.

Roy's counsel Aryama Sundaram pointed out that the court in its judgment had directed Sebi to take action as per the Sebi Act. Stressing that the Sebi order could be challenged before SAT, he said, "We went to SAT against the Sebi order." Sundaram said that an appeal had been filed before SAT against the Sebi order directing attachment of personal properties of Roy, who was not the director of the companies.

Coming to the petition before the HC, Justice Khehar said it was contempt if the company knew that it could not go to the court but still filed a writ.

Courtesy: Mail Today