File photo of Subrata Roy, chairman of Sahara Group. (Photographer: Prashanth Vishwanathan/Bloomberg)

Supreme Court Directs Subrata Roy To Appear Before It On Feb. 28 In SEBI Case

The Supreme Court on Thursday directed Sahara group chief Subrata Roy to appear before it on Feb. 28 for failing to deposit Rs 25,700 crore in the Securities and Exchange Board of India-Sahara case for returning investors' money, warning that "the law will take its own course" now.

Roy was sent to the Tihar Jail by the apex court on March 4, 2014 and came out on parole after spending over two years in prison on May 6, 2016 to perform the last rites of his mother. He has been out of prison ever since.

The apex court noted that the Sahara group has already deposited around Rs 20,000 crore in the SEBI-Sahara account which includes Rs 15,000 crore and Rs 4,800 crore interest.

A three-judge bench headed by Chief Justice Ranjan Gogoi was irked over the fact that Roy, who was directed way back in August 2012 to pay around Rs 25,700 crore, has been unable to pay the amount despite "several opportunities and indulgence", and said that now the law will "chart its own course".

The bench, which also comprised Justices AK Sikri and SK Kaul, didn't allow the contention of senior lawyer Vikas Singh, appearing for Roy, that it was a case of "double payment" of investors' money as the dues have already been paid.

The plea of Singh that SEBI be directed to conduct verification of the group's claims of payments made to investors was rejected by the bench which said that this has been raised several times in the past.

"You are unable to deposit the money. We will ask whosoever is the person has to appear in person," the bench said and passed the direction that it is declining the plea for giving more opportunities to Roy and other directors for making payment of around Rs 5,000 crore dues.

"We do not see the situation changing. You had sought two years time and now more than two years have passed. You have been given sufficiently long rope," the bench said.

"The matter has been listed after six months...and what has transpired in six months did not inspire confidence of this court," the bench said while refusing to grant any more time to the group for arranging the money.

Besides Roy, two other directors—Ravi Shankar Dubey and Ashok Roy Choudhary—will have to appear on the next date of hearing.

At the outset, Singh referred to the sluggish real estate market during the decade as the key reason for not depositing the money and said, "nothing sells".

He said it has been the case of the group that it had already paid the money to the investors and has been making double payment into the SEBI-Sahara account.

He said that Rs 50 crore has been paid to digitise the records of the investors and the markets regulator be asked to verify the claim of the group over the payment of dues to investors.

If there were bogus investors then the money would go the Government of India and in any case, it cannot be kept by the SEBI, he said. However, the bench said that this can be ordered only after Sahara group pays the entire amount.

In July last year, the auctioning process of Sahara group's prized Aamby Valley properties was put off by the Supreme Court after it was informed that the auction notice did not elicit any response from prospective buyers.

Senior advocate Arvind Datar, appearing for SEBI, has said that the total amount was Rs 25,781.23 crore, of which around Rs 15,000 crore principal amount has already been deposited by the group. With interest, the deposited amount would come to around Rs 20,000 crore.

Roy and two other directors were arrested for failure of the group's two companies — Sahara India Real Estate Corporation and Sahara Housing Investment Corp Ltd.—to comply with the court's Aug. 31, 2012 order to return Rs 25,000 crore to their investors.