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SC rejects Sahara’s plea for more time to pay money

IANS | New Delhi |

The Supreme Court on Wednesday turned down Sahara Group chief Subrata Roy's plea for more time to pay Rs. 552.21 crore and warned of consequences if the cheque given by the firm to market regulator SEBI was not honoured.

Declining the plea for extension in the time for the cheque's encashment, a bench of Justice Dipak Misra, Justice Ranjan Gogoi, and Justice A.K. Sikri directed Securities and Exchange Board of India (SEBI) to submit the same for encashment on July 15.

"If the cheque is dishonoured, appropriate consequences will be faced by the contemnor," the apex court observed.

Roy is facing contempt for not complying with the apex court's order.

Sahara had urged the court to give it time till August 15 for mobilising funds.

The court was informed on Wednesday that the Sahara Group had deposited Rs 710.22 crore — the balance of Rs 1,500 crore that it was to pay by June 15. Earlier, Sahara had paid Rs 790.18 crore.

"The question is not how much you have paid; the question is how much you have to pay," the court said as senior counsel Kapil Sibal and Mukul Rohatgi tried to impress upon the bench the difficulties post-demonetisation market conditions were posing in the sale of Sahara properties.

Sibal appeared for Roy while Rohatgi appeared for Sahara Housing Finance Corporation Ltd. and Aamby Valley.

"You pay Rs 400 crore or Rs 500 crore once in a while. This is going to take a lifetime to pay the entire amount… for how much time we have to assemble (for hearing your matter)… you want us to wait," the court said.

As both senior lawyers sought the court's indulgence, it said: "We are not going to grant any kind of indulgence. That stage is over."

Describing the prevailing situation as "unfair", Sibal said: "I can't allow my properties to go to vultures."

The court then asked the official liquidator of the Bombay High Court: "… are you planning to auction his properties to vultures?"

While not giving any extension in time to Sahara, the court approved the terms, conditions and proclamation vis-a-vis the auction of Aamby Valley project in Maharashtra.

However, it put on hold the next step till Sahara's cheque was encashed. 

On April 16, the court had asked the High Court's official liquidator to evaluate and auction the Aamby Valley property of the Sahara Group to recover money owed to SEBI for returning to investors.

The apex court, by its order of August 31, 2012, asked Sahara Group's two companies –Sahara India Real Estate Corporation Ltd. and Sahara Housing Investment Corporation Limited — to return to the investors Rs 17,400 crore, along with 15 per cent interest, which the two companies collected from investors through Optionally Fully Convertible Debentures in 2007 and 2008.