SC gives Sahara Group’s Subrata Roy ‘long rope’, but says, ‘pay back or go to jail’

By: | Published: July 12, 2016 6:41 AM

In a relief to Sahara group chief Subrata Roy, the Supreme Court on Monday extended his parole till August 3, but asked him to pay Rs 300 crore by then.

In a relief to Sahara group chief Subrata Roy, the Supreme Court on Monday extended his parole till August 3, but asked him to pay Rs 300 crore by then. It also allowed the Sahara group to sell 71 properties, including those entrusted to Sebi, at a price not less than 90% of circle rates.

The bench headed by Chief Justice TS Thakur extended parole granted to Roy and his brother-in-law Ashok Roy Choudhary on May 6, which was extended by two months on May 11, subject to the condition that he deposited R300 crore by August 3. It also granted parole to another director RS Dubey on same terms and conditions on which Roy and Choudhary were released after senior counsel Kapil Sibal requested to release him.

“We are giving you a long rope. You have remained outside for long now. The interim arrangement terminates and you go back to arrange R5,000 crore for the bank guarantee. Either pay or go back to jail. Time is now to return to jail,” Justice Thakur said, while expressing disappointment over Roy’s efforts to sell the property.

“Did you sell anything? We are not satisfied with the way you are making efforts to sell. Did your client travel from place to place? In what connection?” Thakur asked Sibal, who informed the bench that Roy’s release had boosted confidence of its investors and his travel was “business-related”.

The CJI further said: “There is a history to this litigation, history when you were in jail and nothing was done and now history is being repeated…”

While the group has remitted almost the cash component of R5,000 crore, it is yet to give the bank guarantee.

He also told Roy not to test the court’s “patience” and “capacity” to hear the matter and said: . “You can’t go on like this.”

The apex court also allowed the group to remit a sum of £24 million (around R200 crore), a bridge loan from Reuben Brothers, lying in its London account to the Sebi-Sahara account. Sahara said it is negotiating with the Qatar government for raising money from sale of its three overseas hotel properties — Grosvenor House (London), New York Plaza and Dream Downtown in New York. However, the court clarified that any such permission to remit the bridge loan did not amount to approval of any arrangement the group might have with the lender.

Sibal also requested the bench to lift the embargo imposed in June last year on selling assets below their market rates so as to enable it to raise money.

The CJI also asked Sibal to address the court on appointment of receiver for the properties. We are thinking of appointing two more retired HC judges to handle and address all the issues. Former SC Justice BN Agarwal is already there. Interests of revenue and others will be secure then. Please tell us why should we not appoint the receiver.” However, Sibal objected to this, saying “it’ll destroy the business completely” and sought time to address the court on this issue on August 3.

Sibal said that receiver should be appointed only if Sahara owed any money. “How many depositors have come back for money?” The court warned Sibal not to get into questions which have been adequately addressed in previous orders of the court.

Sebi senior counsel Arvind Dattar told the court that its efforts to sell some 67 properties did not receive much response due to “lot of issues”. Besides, the value of these overseas properties are falling now as the pound had touched a 31-year low following the Brexit vote.

He argued that while SBI Caps did not get any bids in the first stage, HDFC Realty got the lone bid for R58 crore. Even potential bidders are citing various difficulties in the process, including encumbrances on the properties, income tax attachment orders, stay orders from court, etc, he added.

Roy and the two directors are in judicial custody since March 4, 2014, for not complying with the apex court’s August 31, 2012 and

December 5, 2012, orders relating to refund over R24,029 crore from raised from three crore bond investors by two group firms —

Sahara India Real Estate Corp and Sahara Housing Invest Corp.

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