The Supreme Court Thursday restrained Sahara Group chief Subrata Roy and two directors from leaving the country as they have failed to comply with its October 28 orders.
By its October 28 orders, the court directed the Sahara group's real estate and finance arm - Sahara India Real Estate Corporation Ltd. and Sahara Housing Investment Corporation Ltd. - to deposit unencumbered title deeds of their assets of Rs.20,000 crore as a guarantee to return investors' Rs.24,000 crore, collected thorough Optionally Fully Convertible Debentures.
"We are prima facie satisfied that our order dated Oct 28, 2013, has not been complied with in letter and spirit. We direct all the contemnors not to move out of the country," said the bench of Justice KS Radhakrishnan and Justice JS Khehar.
The court also directed the Sahara Group not to sell or alienate any of its property till its Oct 28 orders are complied with.
"We restrain you from selling any property of Sahara group," Justice Khehar directed as senior counsel C.A. Sundaram told the court: "We have deposited the title deeds of the Versova property."
"It is not important for you to understand. It is for Sahara to understand the import of our order," Justice Khehar said as Sundaram sought to address the court on its order restraining Subrata Roy from leaving the country till its orders are complied with.
First comply with the order and deposit original title deeds of Sahara group's unencumbered assets, then we will order to hear you (on Securities and Exchange Board of India's (SEBI) contempt petition), the court said as Sundaram sought hearing of the market regulator's plea.
SEBI has moved the contempt petitions for the failure of Sahara group's two companies to comply with the apex court's August 31, 2012 order directing Sahara companies to return investors' Rs.24,0000 crore with 15 percent interest.
The market regulator had moved the second contempt petition for Sahara's failure to comply with the apex court's Nov 5, 2012 order asking SEBI to accept Sahara's pay order of Rs.5,120 crore as a part payment of the investors' money.
The court, by the said order, said Sahara would deposit a sum of Rs.10,000 crore in the first week of January 2013 and the balance amount in the first week of February.
Earlier, in the course of hearing, senior counsel Arvind Dattar ripped through Sahara's contention that it had complied with the court's Oct 28 order by submitting the consent deed of its 106 acres of land at Versova in Mumbai whose value even if all developmental cost and 25 percent profit margin are deducted would be Rs.19,000 crore.
Urging the court not to accept the two valuation reports of the Sahara's 106 acres of land as same could not be developed because it was spread over creeks and if it was such a "gold mine", then why it has not been developed since 2001.
As Sundaram sought to counter Dattar saying it could be developed now after the 2012 state government notification, the SEBI counsel said: "Whatever Maharashtra government may say, the MOEF clearance is mandatory."
"The moment you come into creek, you run into environmental issues", Dattar told the court.
In a poser, Dattar wondered, "Can court accept the valuation report of a land on which no development can take place? That too by two valuers who had not seen the land under valuation."