SC to RBI: Give SIFCL a fresh hearing

The Supreme Court on Monday kept in abeyance the action taken by the Reserve Bank of India against Sahara India Financial Corporation Ltd, including a ban on fresh deposits, and asked the bank to give the company a fresh hearing.

At the same time, the bench comprising Justice Arijit Pasayat and Justice PP Naolekar said that the interim order of Lucknow Bench of Allahabad High Court staying the RBI action against SIFCL will not be in operation. SIFCL will now appeal to RBI on June 12 for a personal hearing.

"Till the matter is disposed afresh by RBI, its order of June 4 will not be given effect and at the same time interim protection granted to Sahara India Financial Corporation by the High Court shall not be operative," the Supreme Court said.

While senior counsel Mukul Rohtagi appeared for SIFCL, PR Andhyarujina represented RBI.

"Since the entire matter has been disposed by this court, there will be no need for the High Court to deal with the matter," the bench said.

RBI had approached the Supreme Court on June 6, challenging the Allahabad High Court stay on its order banning Sahara group's para-banking company from taking fresh deposits. The apex court had fixed the matter for hearing for Monday.

The bench, while passing the order, said, "We are of the view that in view of peculiar facts involved in the matter, RBI should give opportunity to SIFCL for personal hearing."

Sahara had contended that it was not given a fair opportunity to express its response on the show cause notice issued by the RBI.