The Supreme Court on Friday stayed the arrest of Sahara group chief Subrata Roy, as directed by the Patna High Court earlier in the day. It also stayed further proceedings against him in a cheating case where he was asked to explain in person his plan to refund matured deposits to the small investors of his group companies.
A Bench led by Justice AM Khanwilkar, after hearing senior counsels Kapil Sibal and V Giri, stayed the HC’s order which had issued an arrest warrant against Roy for not being present in the court on Friday morning despite clear directions in this regard. Roy was initially expected to appear on Thursday but was given one more day.
Roy or the Sahara group had no nexus with the original criminal complaint and the Sahara chief was not a party to the cases, his counsel argued, adding that despite that the HC had issued a summoning order in the “most arbitrary manner”.
Asking the Uttar Pradesh and the Delhi police to cooperate, the HC had on Friday directed the Bihar director general of police (DGP) to produce Roy physically before it at 10.30 am on May 16.
”It seems that Roy Sahara has no respect for the orders of this Court and he thinks that he is above it. Despite various chances given to him, he has failed to appear. This Court has no option, but to order the authorities to produce Roy…Order of this court is in the interest of justice particularly in the present case where the companies headed by Roy Sahara, who being the chairman of the Sahara Group, has siphoned off crores of rupees from the citizens of Bihar,” the HC judge said.
The HC directions were issued on various anticipatory bail applications filed in cheating cases committed by non-banking finance companies (NBFCs). More than 600 applications are pending for the release of the matured amount by the Sahara company.
In his appeal, Roy had told the SC that the HC could not have used its powers under Section 438 of CrPC to “virtually convert the anticipatory bail proceedings into an omnibus exercise for recovering disputed dues and resolving alleged claims of fraud and cheating involving the public at large in Bihar”.
Roy had been added as a party in the purported capacity of being the director in Sahara group of companies, which is factually incorrect as all group companies were separate legal entities and being managed by their respective board of directors, the appeal filed through counsel Gautam Awasthi stated.
While the HC had also issued directions to RBI for creating awareness regarding the functioning of Nidhi companies and also directed registration of a PIL in the alleged fraud by these companies, it had also impleaded Sebi, RoC (Bihar), the ministry of corporate affairs, the department of economic affairs, etc, in these proceedings.