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SC: Was compelled to put Roy behind bars to make the law work

The order was indeed “unprecedented but justifiable” since it is “doing what comes naturally” approach to the problem at hand, which required such a drastic step.

Written by Utkarsh Anand | New Delhi | June 20, 2015 1:55:44 am
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It was the necessity of “making the law work” which had “compelled” the Supreme Court to put Sahara chief Subrata Roy behind the bars in March 2014 without holding him guilty under contempt or any other charge.

In a candid admission, a three-judge bench led by Justice TS Thakur said the order was indeed “unprecedented but justifiable” since it is “doing what comes naturally” approach to the problem at hand, which required such a drastic step.


The Bench, also comprising Justices Anil R Dave and AK Sikri, explained why Roy and two other directors were sent to jail over their non-compliance with the orders to repay investors of a scheme, which was declared illegal by the court. The trio was jailed 15 months ago though the contempt case remained pending.

Justifying the orders passed by Justices KS Radhakrishnan and JS Khehar, the bench said it was an unprecedented situation of personal liberty on one hand and majesty of law on the other that compelled the court to take an extreme step.

“It is this legal realism which has compelled the court to adopt an approach which sounds more pragmatic. It is a classic case where the approach adopted is influenced by the necessity of ‘making the law work’. It is the unprecedented situation which has led to passing of unprecedented but justifiable orders,” said the bench.

It pointed out this could be categorised as a case where law may not provide a definite answer but the guiding principle is that the “avowed objective of rule of law is to ensure that the orders of this court are respected and obeyed”.

The bench said this as it decided Sahara’s plea to release Roy and also allow it to sell certain properties. In its order, the bench maintained the conditions set in March 2014, saying the company would require to deposit Rs 10,000 crore with Sebi to secure release of Roy and others. Rs 5,000 crore is to be paid in cash and the equal amount by way of bank guarantee.

Fixing the liability at Rs 36,000 crore, including the interest, the bench said that after the release, outstanding shall be deposited within 18 months in nine installments. “First eight installments shall be of Rs 3,000 crore payable every two months from the date of their release from custody and last installment shall be of the remaining amount,” added the court.

The bank guarantee shall be encashed in case Sahara defaults in payment of two installments, consecutively or otherwise, and also if there is a failure in paying the entire sum at the end of 18 months.

Roy and the two directors shall be sent back to jail if there is a default in depositing three installments, said the bench, adding the company may approach with for permission to lift the restraint on selling properties. It also allowed a plea to allow Roy use the conference room facilities of the Tihar Jail for business negotiations.


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