In a blow to the Sahara Group,the Supreme Court on Thursday restrained Subrata Roy and other directors from leaving the country and also prohibited all its companies from selling any property until further orders.
The court passed the order in view of Saharas failure to hand over acceptable title deeds of properties worth Rs 20,000 crore to the Securities and Exchange Board of India (Sebi) for refunding its around 3 crore investors.
We are satisfied that our order dated October 28 has not been complied with. Hence,we direct Sahara not to part with movable and immovable properties till our further orders. All contemnors shall not leave the country…, a bench of Justices K S Radhakrishnan and J S Khehar said.
The bench made it clear that the restraining order was applicable to all companies of the Sahara Group,and that they would get a hearing only after they have complied with the court order in letter and spirit.
It is important for Sahara to understand. We can see our order has not been complied with. First you deposit title deeds and then we will hear you. Till you dont comply with our orders,there is no question of granting you a hearing, the bench told Saharas counsel C A Sundaram.
Sundaram sought to convince the bench that they had already submitted to Sebi the best available title documents they possessed,but the court said that these deeds were not acceptable.
The group had submitted to Sebi documents of two plots of land: an 106-acre chunk in Versova in Mumbai that it claimed to be worth around Rs 19,000 crore,and 200 acres in Vasai,estimated to be worth Rs 1,000 crore.
The quantum of money indicated the outstanding that Sahara requires to shell out towards the refund to investors. Sundaram also adduced valuations by two professional companies to corroborate their estimates.
Counsel for Sebi Arvind Datar,however,pointed out that the 106 acres were in a no development zone,whereas the assessment had been done on the basis of developing residential and commercial properties on it.
He said the land cannot be developed in view of environment ministry norms,and Sahara had,therefore,violated the court order by not handing over clean and unencumbered title deeds. Datar also said that the concerned sub-registrar had valued this plot at only Rs 118.4 crore.
The bench agreed with the counsel,saying that valuation could not be done on the basis of proposed investment prospects,and such a plan was unacceptable. It held that Sahara had clearly not complied with its order to hand over valid title deeds within three weeks from October 28. On that date,the court had said that Sahara was playing hide and seek,and could not be trusted.
You have driven everybody around… There cannot be any escape now and the money has to be repaid, it had said,asking Sebi to examine the deeds given by the group.
The court is hearing three contempt petitions filed by Sebi against Roy,Sahara India Real Estate Corporation,Sahara India Housing Investment Corporation,and their directors.
Sahara and Sebi are locked in a legal battle over the refund of Rs 24,000 crore to the companys investors,raised through illegally floated debentures. On August 31 last year,the court had directed the Sahara group to refund Rs 24,000 crore. The group handed over a draft of Rs 5,120 crore to Sebi in December.