The sum, along with 15% interest, should be deposited in a bank in three months
The Supreme Court on Friday held that the economic offences committed by Saharas must be dealt with by an iron hand and directed the Sahara India Real Estate Corporation Ltd. (SIRECL) and the Sahara Housing Investment Corporation Ltd. (SHICL) to refund over Rs. 24,400 crore collected from 2.21 crore depositors.
The sum was collected through the optimally fully convertible debentures (OFCDs) by way of bonds.
A Bench of Justices K.S. Radhakrishnan and J.S. Khehar said they should refund the amounts collected through Red Herring Prospectus (RHPs) dated March 13, 2008 (Rs. 17,400 crore) and October 16, 2009 (over Rs. 7,000 crore), along with 15 per cent interest to the Securities and Exchange Board of India (SEBI) from the date of receipt of the subscription amount till the date of repayment, within three months.
The sum should be deposited in a nationalised bank bearing the maximum rate of interest.
The Bench directed the Saharas to give details, with supporting documents, to establish whether they had refunded any amount to persons who had subscribed through the RHPs within 10 days, and “it is for the SEBI (WTM) to examine the correctness of the details furnished.”
“We make it clear that if the documents produced by Saharas are not found genuine or acceptable … the SEBI (WTM) will proceed as if Saharas had not refunded any amount to the real and genuine subscribers who had invested money through [the] RHPs,” it said.
The court appointed the retired Supreme Court judge, B.N. Agrawal, “to oversee whether directions issued by this court are properly and effectively complied with by the SEBI (WTM) from the date of this order. Mr. Justice B.N. Agarwal would also oversee the entire steps adopted by the SEBI (WTM) and other officials for the effective and proper implementation of the directions issued by this court.”
In a separate judgment, Justice Khehar said: “It seems the two companies collected money from investors without any sense of responsibility to maintain records pertaining to funds received. It is not easy to overlook that the financial transactions under reference are not akin to transactions of a street hawker or a cigarette retail made from a wooden cabin. The present controversy involves contributions which approximate Rs. 40,000 crore, allegedly collected from the poor rural inhabitants of India. Despite restraint, one is compelled to record that the whole affair seems to be doubtful, dubious and questionable. Money transactions are not expected to be casual, certainly not in the manner expressed by the two companies.”
The Bench directed the Saharas to furnish the SEBI, in 10 days, with all documents, especially the application forms submitted by subscribers, the approval and allotment of bonds, to enable it to ascertain the genuineness of the subscribers as well as the amounts deposited.
Keywords: SEBI, Sahara Group, Supreme Court
Implementation of any final SC order in any case is the crux of the whole issue.What mechanism will be deployed to implement every word/spirit of the final orders of SC in any case of lingering disputes.who will implement it? who are accountable for not implementing the SC final orders?Many people who got final SC orders in their favour are not at all in a position to get the relief they sought which means the orders of the highest courts of this land are not at all obeyed & who "cares for SC " is the widely prevalent attitude.How &what are the plans with SC to erase this stigma&total
wanton disrespect to SC.I would suggest that SC in order to safe guard the fundamentals rights of public enshrined in the constitution get down from its armchair,tread on the groundlevel along with police force &relevant administration machinery & face the violators to take them into task to implement its own order on the spot itself.This is the only way it can instill hope amongst the public.
The OFCDs are not "optimally fully convertible debentures" but Optionally Fully
Convertible Debentures.
I think the amount which have to refunded by Sahara is only Rs.17,400
Crores instead of Rs.24,400 Crores.
As supreme court Order "We, therefore, find, on facts as well as on law, no illegality in the proceedings initiated by SEBI as well as in the order passed by SEBI (WTM) dated 23.6.2011 and SAT dated 18.10.2011 and they are accordingly upheld. The order passed by this Court in C.A. No.9813 of 2011 filed by SIREC and in C.A. No.9833 of 2011 filed by SHICL, praying for extending the time for refund of the amount of Rs.17,400 crores, as ordered by SAT, stands vacated and consequently the entire amount, including the amount mentioned above will have to be refunded by Saharas with 15% interest. We have gone through each other’s judgment and fully concur with the reasoning and the views expressed
therein and issue the following directions in modification of the
directions issued by SEBI (WTM) which was endorsed by SAT:"
This judgement is definitely a milestone in the history of Indian judiciary system. As far as investment business is concerned, people having muscle and politic connection had started to take common man and as well as authority, as granted. Role played by SEBI is also needs to be praised and it can an exemplary case for other government institute who wants to put law and order situation in systematic manner. First time in India, recognition of people as consumer has been addressed up to that greater extant. Hope it is beginning and same efforts will be taken in other sector also.
Beautiful and a wonderful very aptly worded excellent judgement in India. Hats off to the Honourable Judges. Others engaged in such dubious and cheating exercises must learn a lesson from this. If our country has to stand with its head high among all Nations, such good thought provoking judgments should be pronounced in many corrupt cases where multi million crores of rupees are swindled by unscrupulous persons.
Chief Justice of Supreme court few days back opined that judgments
have to stand the test of implementation. This is just works against
that principle.
How can a company return so much money. They want the company to be
liquidated.Who is going to loose. Is it possible to sell off so many
assets, what would happen to the value of these assets.
I am afraid , SC should have a mechanism to review some critical judgement before they are delivered .
is there any suggestion from the hindu reader about the this thing ,so that poor can be saved.
Kudos to the Judiciary... What a landmark judgement. If only it was taken in USA there would
be more pensioners with money in their bank
Justice Radhakrishnan said: “OFCDs issued by Saharas were public issue of
debentures, hence securities. Once there is an intention to issue shares or debentures
to the public, it is/was obligatory to make an application to one or more recognised
stock exchanges, prior to such issue. Saharas could not have filed the RHP or any
prospectus with the RoC [Registrar of Companies] without submitting the same to the
SEBI under Clauses 1.4, 2.1.1. and 2.1.4 of the DIP Guidelines.”
~ This is a milestone in matters, financial. That the Saharas 'desertified' the rural poor
is bad enough. But, the indirect connivance of those in power in Sahara's 'doubtful,
dubious and questionable' (I cite Justice Khehar,) affairs must also be probed and the
guilty punished.
Dug deep in U.P. after creating a politically conducive clout to defend
themselves, the Subrotos bought immunity for brazen indulgence in
varieties of corrupt practices and over the years built the Sahara
empire..and no questions asked by any Govt.?
Thank God ..atlast are caught by tail now.
Wonder what would happene if Supreme Court of India is not proactive !
Perhaps, alike many other big sharks the Sahara story would have also
trailed ..lived happily thereafter types?
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