Market regulator Sebi on Tuesday told the Supreme Court that Sahara chief Subrata Roy alongwith three directors should be given maximum punishment and his passport should be impounded for failing to comply with the apex court’s directions that asked two Sahara firms to refund R19,000 crore they had collected in 2008-09 from the public after violating investor protection norms.
Sebi senior counsel Arvind Dattar sought maximum punishment for Roy, saying there was a wilful, deliberate and continuous disobedience of the court?s three orders and he can?t escape his liability for non-refund by Sahara India Real Estate Corp Ltd (SIREC) and Sahara India Housing Investment Corp Ltd (SHIC).
Contending that Sahara Group was a single economic entity and Roy was its ?managing worker and chairman”, Dattar took the court through various letters addressed by Roy to the Sebi chairman to prove his point.
Dattar further told a bench of justices K S Radhakrishnan and J S Khehar that the companies were also guilty of breaching the undertakings given to the apex court in the case.
During the course of the hearing, the bench questioned the Sahara company whether it had prepared/maintained a register of debentures, which is necessary under the Companies Act, giving details about the bonds.
To this, Dattar said that no such register was given to Sebi nor any profit and loss accounts were provided. However, Sahara said that it had given the register to Sebi.
Sahara senior counsel Ram Jethmalani argued that civil contempt proceedings does not lie in the present facts and circumstances.
Further, Sebi has not alleged or substantiated any fact which can even remotely show that Sahara has willfully or even neglected to comply with the directions of Supreme Court and the apex court should only take into account those facts that subsisted before the filing of contempt petition.
Further, he argued that if the contempt petition is filed on various breaches of undertaking, even if one breach fails, the entire contempt petition must fail.
Earlier the court had issued contempt notices to the companies, Roy and the three directors ?Vandana Bhargava, Ravi Shankar Dubey, and Ashok Roy Choudhary? on Sebi’s plea for not obeying the apex court’s August 31, last year’s judgment, which asked the two firms to refund around Rs 24,000 crore to its investors by November 30. While giving extension of time, the Chief Justice’s bench on December 5 had asked Sahara to pay Rs 5,120 crore upfront and the balance in two installments — Rs 10,000 crore in the first week of January, and the rest in the first week of February.