On Tuesday, the Supreme Court of India clarified that the Sahara Group is not barred from selling its assets to fulfill the requirement of depositing approximately ₹10,000 crore into the Sebi-Sahara refund account. This fund is designated for reimbursing investors who are still waiting for their refunds.
The Court highlighted the need for transparency and instructed the Sahara Group to outline a clear plan for liquidating unencumbered properties to meet the deposit requirement. Further proceedings on this matter have been scheduled for September 5.
“There is no restriction on the Sahara Group selling properties. The condition is that properties can be sold at the circle rate or up to 10% below this rate. For sales below this threshold, court approval is necessary. While it is preferable for properties to be sold at or above circle rates, the main concern is ensuring that transactions are fair,” remarked Justice Sanjiv Khanna, who led the bench.
Justices MM Sundresh and Bela M Trivedi, who were part of the bench, directed the Sahara Group to provide a comprehensive list of unencumbered properties available for sale. This list will be reviewed in conjunction with the Securities and Exchange Board of India (Sebi) to maintain transparency and accountability throughout the process.
“Submit a list of unencumbered properties. We will then discuss the necessary safeguards and create a framework for recovering the remaining amount,” instructed the bench to senior advocates Arvind Datar and Pratap Venugopal, who represented Sebi.
The scrutiny stems from a Supreme Court order dated August 31, 2012, which required Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation Ltd (SHICL) to refund the money collected from investors, including 15% annual interest, within three months. Despite more than a decade passing since the order, the Sahara Group has not fully complied, leading to ongoing court supervision.
Sebi has expressed concerns about the status of Sahara’s properties, noting that not all of them are unencumbered, and has questioned the timeline for the group’s payment of the outstanding amount. The Court has urged Sahara’s senior counsel Kapil Sibal to present a detailed plan for arranging the ₹10,000 crore deposit and to specify which properties will be sold.
The bench emphasized the urgency of compliance, suggesting it would be “prima facie” incorrect to argue that Sahara has not been given enough opportunity to liquidate properties for the deposit. “In effect, you are a judgment debtor… The court order to deposit ₹24,400 crore serves as a decree,” the court noted.
Additionally, the Supreme Court addressed various applications from flat buyers, operational creditors, and other parties seeking relief and refunds. It clarified that the ongoing case before the Supreme Court should not impede other forums from addressing issues related to the Sahara Group.
Since the 2012 order, the Sebi-Sahara case has encountered numerous legal twists. Sebi reports that Sahara firms have deposited ₹15,455.70 crore to date, which is held in fixed deposits across nationalized banks. As of September 30, 2020, the total amount in the Sebi-Sahara refund account, including interest, stands at ₹22,589.01 crore. However, only ₹138 crore has been disbursed to investors so far.
