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SEBI v. Sahara India Real Estate Corporation Ltd.

Contempt Petition (Civil) · Neutral citation not assigned (Contempt Petition (Civil) No. 260 of 2013)Decided 4 Jun 2014
Contempt Petition (Civil) No. 260 of 2013
Justice T.S. Thakur · Justice A.K. Sikri

Background

This is an interim order, not a final judgment. Sahara companies had failed to make court-ordered investor refunds, and three executives were held in custody for non-compliance. An earlier order allowed interim bail upon Rs. 5,000 crore in cash and a Rs. 5,000 crore bank guarantee. They sought easier release conditions and permission to realise assets frozen by court and SEBI orders.

Decision Breakdown

This is an interim order, not a final judgment. The Court refused to relax the required amounts or move the executives to a guest house, given their earlier delays and non-compliance. It allowed specified deposits and securities to be realised and nine Indian properties to be sold subject to valuation safeguards and payments to SEBI. It also allowed Aamby Valley property to secure the required financing and accepted guarantees from nationalised or scheduled banks, excluding cooperative banks. Proposed foreign-property sales awaited further information. The wider proceedings were referred to a three-judge bench; this order did not itself release the executives or complete investor refunds.

Lesson Learnt

Courts can permit controlled asset sales to help comply with investor-refund orders while preserving safeguards for depositors. Permission to raise money is different from satisfaction of the financial conditions for release.

Official source (sci.gov.in)View Judgment (PDF)

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