05 Dec 2012
Sahara Gets Till Feb For Complete Refund to Investors
SC asks Sahara to refund Rs 24,000 cr to investors in three instalments
A bench headed by Chief Justice Altamas Kabir directed the Sahara Group to immediately hand over a demand draft of Rs 5,120 crore to market regulator Sebi and said the balance amount shall be deposited with the market regulator in two instalments in January and February.
The bench also comprising justices S S Nijjar and J Chelameswar made it clear that the first instalment of Rs 10,000 crore has to be paid by first week of January 2013 and the remaining by first week of February 2013.
The bench, which said it was considering Sahara's application to protect the interest of the investors, also expressed displeasure with Sahara's statement for extension of time for payment, saying it could not be accepted at face value.
The order passed by the bench was objected to by the Securities & Exchanges Board of India and an association of the investors who said that the directions were being given without hearing their submissions.
Sahara had also been ordered to submit detailed documents with the regulator if it had refunded any money collected through the so-called optionally fully convertible debentures to investors.
The regulator says Sahara has not complied with the court's order, while Sahara says the regulator "deliberately refused" to accept documents and information submitted by it.
Sahara said in newspaper advertisements on 1 December it had "cleared" about Rs 33,000 crore raised in the outlawed bonds and had maximum outstanding liability of Rs 5,120 crore, which it was ready to deposit with the authorities.
Sebi said in late October it had received complaints from investors that they were being forced by agents and officials of Sahara to switch the money held through the bonds to other investment products sold by the group.
With 5 December's order, a bench headed by CJI modified the verdict given by another bench on August 31 setting the deadline of November end for Sahara group to refund the money.
Sebi strongly opposed the order dictated by Justice Kabir and said that it was not right to modify the earlier verdict given by a different bench and submitted that Sahara's plea must be heard by a bench of justices K S Radhakrishnan and J S Khehar which had passed the verdict against the Group's two companies.
Senior advocate Arvind Dattar, appearing for Sebi, further submitted that the Chief Justice must record his statement in the court's order pertaining to his submission that the case must be heard by a bench of justices Radhakrishnan and Khehar.
Chief Justice Kabir got angry after Sebis submission and said, "We will record what we feel to record. We cannot record what you say."
An association of investors, who had put in their money in Sahara Group, objected to the order, saying that it was pronounced without hearing their arguments.
Senior advocate Vikas Singh, in his remark against the order, said in the open court that the bench had stated that it will pass order to protect interest of the investors but the order is being passed without giving them a hearing.
"You are saying that the order is being passed to protect the investors and you are passing the order in the guise of protecting the investors, but what is there for them if investors are not heard. It is not fair," an upset Singh said, immediately after the order was dictated by CJI.
He said that his petition should not be disposed of along with Sahara's petition, but CJI shot back in a very angry tone "No, sorry".