A bench of Justices KS Radhakrishnan and JS Khehar said: We are not on punishment at all at this stage. We are only on enforcement of our orders. We will deal with the punishment for contempt of court when we conclude the hearing... Therefore, when suggestion is made (that its order is) R10,000-crore bail bond. It is not right. It is a part- payment towards the principal amount. This is to establish your bona fide to be released.
The court said any suggestion that Roy and two other directors were jailed under contempt charges was irrelevant at this stage.
The Sahara group expressed its inability to immediately pay R10,000 crore to secure bail for its chief Subrata Roy and its two directors, who have been in jail since March 4.
Roy's counsel CA Sundaram told the court that Sahara can pay R2,500 crore upfront, R2,500 crore within three weeks after Roy's release and R5,000 crore in bank guarantees within three months.
Praying for some affordable terms, the counsel requested the court to alter the terms for release of the chief and let him stay outside the Tihar prison under 'house arrest'. This will enable him to meet people and raise the amounts to satify the court's demands, Sundaram said, adding that if Roy could raise the huge amounts demanded by the court, he would not be in jail in the first place.
The apex court had on March 26 agreed to release the head of the Sahara conglomerate from custody, but only after the group deposited R10,000 crore in cash and bank guarantees. It had ordered the unlisted Sahara to deposit R5,000 crore in cash with the securities regulator as well as provide bank guarantees for another R5000 crore.
Senior counsel AM Singhvi, appearing for the directors, argued the order sending him to jail could not be justified when there was a seamless system under which a person could be imprisoned.
A person who could not afford to pay cannot be sent to jail for that reason. The court should not invent a new procedure, he said, adding in the name of discretion, the court cannot build a new edifice of power.
Singhvi also said a person cannot be sent to jail in the middle of the proceedings. The counsel said it was unconstitutional to send a man behind bars for not paying the money and also questioned the order putting a condition of paying R10,000 crore for getting interim bail.
Senior counsel Arvind Datar, on behalf of Sebi, said it was a unique case as the court's power to enforce its order was under challenge. The court can take such action even before deciding on punishment for contempt of court, in the interest of enforcing the order, he said, adding that the companies owed R37,000 crore, including interest, to their 3 crore investors.
He argued that the power to send a person to detention pending determination of the charge is not unknown to law.
Offering to accept Saharas contention that investors money has already been paid, Dattar said that all Sahara has to show where is the payment, when you paid and how you paid.
The Sebi counsel said that if Sahara is able to demonstrate that it had returned investors money, two things that would be left to be decided would be: Why payments to investors were made in cash, and why the redemption of OFCDs continued even after the August 31, 2012, judgment
Roy, 65, had earlier submitted that the apex court's order for detaining him was illegal and unconstitutional and sought quashing of the order.
A group of senior advocates headed by Ram Jethmalani, who had appeared for Roy and the company, had raised the accusation of bias and prejudice against him.