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Friday, June 6, 2014

Sahara = (i) The prayer for modification of the terms stipulated in our order dated 26th March, 2014 granting interim bail to the contemnors is declined and the I.As to that extent dismissed. (ii) Prayer for shifting the contemnors to a guest house for continued custody and detention till they comply with the directions of this Court for their release on interim bail is also declined and the I.As dismissed to that extent (iii) Orders dated 21st November, 2013 passed by this Court and that dated 13th February, 2013 passed by SEBI restraining sale and transfer of moveable and immoveable properties held by Saharas are modified to the following extent: (a) FDs, bonds and securities held by Sahara Group of companies may be encashed by the holders thereof subject to the condition that the maturity value/sale consideration of such FDs, bonds and securities shall be deposited in the designated bank account of SEBI referred to in the earlier part of this order and details of such maturity values and sale consideration furnished to this Court on affidavit to be filed within four weeks from the date the FDs, bonds and securities are encashed, sold and/or transferred. (b) Immovable properties owned by Sahara Group of companies situated in 9 different cities mentioned in the note filed by Dr. Dhawan and extracted in the body of this order with an estimated value of Rs.2500/- crores are permitted to be sold by the companies/other entities persons in whose names such properties are held subject to the condition that such sales are not for a price lower than the estimated value indicated in the statement filed before this Court or the circle rates fixed for the area in which such properties are situated. The seller shall furnish to this Court the details of the valuation of the properties sold and the terms of sales together with a declaration that the purchasers is not a related party qua Saharas. Needless to say that upon deposit of the sale consideration the title deeds of the property shall be released by SEBI in favour of the purchaser(s). (c) The sale consideration of the properties less transaction cost and statutory dues on the same shall be deposited with the SEBI to the extent the same is necessary to make a total deposit of Rs.5,000/- crores inclusive of the maturity value and sale proceeds of the FDs, bonds and securities etc. permitted to be encashed and sold in terms of direction (iii) (a) above. The balance/excess amount of the sale consideration shall be deposited by Saharas in a separate account to be opened in a nationalised bank which deposit shall remain subject to further orders of this Court. (d) Saharas are also permitted to charge its immovable properties situated in Aamby Valley (Pune), the details whereof are given in Annexure B to IAs No.101-103, for purposes of furnishing a bank guarantee for an amount of Rs.5,000/- crores and/or for deposit of Rs.5,000/- crores if there is any shortfall despite encashment and sales permitted in terms of (iii)(a) and (iii)(b) above. (e) In modification of the orders dated 26th March, 2014, we direct that the Bank guarantees to the tune of Rs.5000/- crores shall be furnished from a nationalised bank or a scheduled bank only. Co-operative Bank Guarantees shall not suffice. (iv) In so far as sale of the three properties situated outside the country are concerned, the question is left open to be determined after the requisite documents/information is made available by Sahara in terms of our order dated 29th May, 2014. (v) Keeping in view the importance of the issues that fall for determination in these proceedings and the ramifications that the directions issued by this Court may have as also the fact that one very important order which is sought to be enforced in these proceedings was passed by a three-Judge Bench, we refer these proceedings to a three-Judge Bench to be constituted by the Hon’ble Chief Justice of India. (vi) We are further of the view that having regard to the nature of these proceedings and the stakes that are involved, we need to appoint an amicus curiae. We accordingly, request Mr. F.S. Nariman, Senior Advocate to assist the Court as an amicus curiae. Shri Nariman shall be free to associate two juniors of his choice to brief him in the matter. (vii) We direct that the Amicus curiae shall be paid his fee @ Rs.1,10,000/- per hearing while the juniors assisting him shall be paid Rs.10,000/- per person for every hearing. The amount so due shall be paid by SEBI by debit to account Saharas. =S.E.B.I. …Appellant Versus Sahara India Real Estate Corporation Ltd. = 2014 (June Part) http://judis.nic.in/supremecourt/filename=41567

 Sahara India Real Estate Corporation Limited
(SIRECL) and Sahara Housing Investment Corporation Limited
(SHICL) (hereinafter referred to as ‘Saharas’ for short) invited
and claim to have collected deposits from general public
1including cobblers, labourers, artisans and peasants in the
form of what were described as ‘Optional Fully Convertible
Debentures’ (OFCD). On a complaint received from
Professional Group of Investors Protection, SEBI found that the
mobilisation of funds under the Red Herring Prospectus (RHP)
dated 13th March, 2008 and 6th October, 2009 issued by the
two companies was not legally permissible.  By an ad interim
ex parte order dated 24th November, 2010 SEBI directed
Saharas not to offer their equity shares/OFCDS or any other
securities to the public or invite subscription in any manner
whatsoever either directly or indirectly pending further orders.
Aggrieved by the said order Saharas approached the High
Court at Bombay but the High Court not only declined to
interfere with the directions issued by SEBI but also passed a
further order on 23rd June, 2011, directing the promoter Mr.
Subrata Roy Sahara and Directors Miss Vandana Bhargava, Mr.
Ravi Shankar Dubey and Mr. Ashok Roy Choudhary of Saharas
to jointly and severely refund the amount collected by Saharas
in terms of the RHPs issued by them alongwith interest @ 15%
p.a. from the date of the receipt of the deposits till the date of
such repayment. Pursuant thereto the SEBI ordered that the
refund of the amount shall be made only in cash through
demand drafts or pay orders. The SEBI issued further
directions including a direction that Sahara Commodity
Services Corporation Limited (earlier known as SIRECL) and
SHICL shall not access the security market for raising funds till
the time the aforesaid payments are not made to the
satisfaction of the SEBI. =
2014 (June Part) http://judis.nic.in/supremecourt/filename=41567
T.S. THAKUR, A.K SIKRI
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
I.A. NOs. 101-103
IN
CONTEMPT PETITIONS (C) NO.412 - 413 OF 2012
IN
CIVIL APPEALS NO. 9813 AND 9833 OF 2011
AND
CONTEMPT PETITION (C) NO.260 OF 2013
IN
CIVIL APPEAL NO.8643 OF 2012

S.E.B.I. …Appellant
Versus
Sahara India Real Estate Corporation Ltd.
 & Ors. …Respondents
J U D G M E N T
T.S. Thakur, J.
1. Sahara India Real Estate Corporation Limited
(SIRECL) and Sahara Housing Investment Corporation Limited
(SHICL) (hereinafter referred to as ‘Saharas’ for short) invited
and claim to have collected deposits from general public
1including cobblers, labourers, artisans and peasants in the
form of what were described as ‘Optional Fully Convertible
Debentures’ (OFCD). On a complaint received from
Professional Group of Investors Protection, SEBI found that the
mobilisation of funds under the Red Herring Prospectus (RHP)
dated 13th March, 2008 and 6th October, 2009 issued by the
two companies was not legally permissible.  By an ad interim
ex parte order dated 24th November, 2010 SEBI directed
Saharas not to offer their equity shares/OFCDS or any other
securities to the public or invite subscription in any manner
whatsoever either directly or indirectly pending further orders.
Aggrieved by the said order Saharas approached the High
Court at Bombay but the High Court not only declined to
interfere with the directions issued by SEBI but also passed a
further order on 23rd June, 2011, directing the promoter Mr.
Subrata Roy Sahara and Directors Miss Vandana Bhargava, Mr.
Ravi Shankar Dubey and Mr. Ashok Roy Choudhary of Saharas
to jointly and severely refund the amount collected by Saharas
in terms of the RHPs issued by them alongwith interest @ 15%
p.a. from the date of the receipt of the deposits till the date of
such repayment. Pursuant thereto the SEBI ordered that the
refund of the amount shall be made only in cash through
demand drafts or pay orders. The SEBI issued further
directions including a direction that Sahara Commodity
Services Corporation Limited (earlier known as SIRECL) and
SHICL shall not access the security market for raising funds till
the time the aforesaid payments are not made to the
satisfaction of the SEBI. 

2. Aggrieved by the order aforementioned, Saharas filed
an appeal before the Securities Appellate Tribunal (SAT) who
concurred with the view taken by the SEBI, and while affirming
the order passed by the SEBI, directed Saharas to refund the
amount collected from the investors within a period of six
weeks.
3. Appeals No.9813 and 9833 of 2011 were then
preferred by Saharas against the above orders in which this
Court by an order dated 28th November, 2011 extended the
period for making the refund upto 9th January, 2012 but finally
disposed of the appeals by an order dated 31st August, 2012.
This Court while doing so modified the order passed by the
SEBI and the SAT and directed Saharas to deposit with the
SEBI the amount collected by them through their RHPs
together with interest @ 15% p.a. within a period of three
months. The amount when deposited was directed to be
invested in a nationalised bank to earn interest. Saharas were
also directed to furnish details with supporting documents to
establish whether they had refunded any amount to the
investors who had subscribed through the RHPs in question.
SEBI was then to examine the correctness of the details so
furnished.Failure to prove the refund of the amount by
Saharas had to give rise to an inference that Saharas had not
refunded the amount to the real and genuine subscribers as
directed by the SEBI.

4. It is common ground that directions issued by this
Court by its order dated 31st August, 2012 were not complied
with. Instead Appeal No.221 of 2012 was preferred by Saharas
before the SAT which was dismissed by the Tribunal as
premature. This dismissal was assailed by the Saharas in C.A.
No. 8643 of 2012 that came to be disposed of by a
three-Judge Bench of this Court by an order dated 5th
December, 2012 with the following among other directions:
“(I) The appellants shall immediately hand over the
Demand Drafts, which they have produced in Court, to
SEBI, for a total sum of 5120/-Crores and deposit the
balance in terms of the order of 31st August, 2012,
namely, 17,400/- Crores and the entire amount in-
cluding the amount mentioned above, together with in-
terest at the rate of 15 percent, per annum with SEBI
in two installments.The first installment of
10,000/-Crores, shall be deposited with SEBI within the
first week of January, 2013.The remaining balance along
with interest, as calculated, shall be deposited within
the first week of February, 2013.The
time for filing documents in support of the refunds
made to any person, as claimed by the appellants, is
extended by a period of 15 days.On the receipt of said
documents, SEBI shall implement the directions contained
in the order passed on 31 st August, 2012.In the default of
deposit of either of the two installments , the directions contained
in paragraph 10 of the aforesaid order dt. 31 st August, 2012, shall
immediately come in to effect and SEBI will be entitled to take all
legal remedies, including attachment and sale of properties, freezing of
bank accounts etc., for realisation of balance dues"


5. Pursuant to the above, Saharas deposited Rs.5120/-
crores with the SEBI but failed to pay the remaining amount.
The balance amount payable is in the vicinity of Rs.12280/-
crores, exclusive of interest payable on the same. SEBI then
filed Contempt Petitions No.412 and 413 of 2012 and,
Contempt Petition No.260 of 2013 against the contemnors for
non-compliance of the directions of this Court. Various orders
have been passed in these contempt petitions from time to
time, and those which are germane for our purpose, shall be
adverted to hereinafter at the appropriate stage. The
applications (IAs) which we are dealing with in this order, are
filed in these contempt petitions and arise out of the earlier
orders passed.
6. It is pertinent to point out at this stage that in the
course of the proceedings in the above contempt petitions
some proposals appear to have been explored by the parties
for compliance with the directions of this Court but all such
proposal were found to be unsatisfactory eventually leading to
the issue of non-bailable warrants against Mr. Subrata Roy
Sahara for his production before this Court. Three other
Directors of Saharas were also ordered to remain present
before this Court.
7. On 4th March, 2014 when the contemnors appeared
before this Court one of them in custody, this Court recorded a
finding that the directions issued by the Court by its order
dated 31st August, 2012 and 5th December, 2012 and those
issued on 25th February, 2013 in CA No.8643 of 2012 and IA
No.67 of 2013 had not been complied with, despite sufficient
opportunities to the contemnors to do so. It was also held that
contemnors had adopted dilatory tactics to delay the
proceedings before the SEBI, the High Court and even before
this Court. It was further found that no acceptable proposal
was presented to comply with the directions of this Court
which left no option for this Court except to commit three out
of the four contemnors to judicial custody. The contemnors
are, ever since the said order, in judicial custody in Delhi’s
Tihar Jail. 
8. It is clear from the above narration that as per the
orders passed, a huge amount of nearly Rs.33,000/- crores is
yet to be deposited. It is also apparent that deadlines for
depositing this amount are long over. No doubt various
proposals have been given by Saharas for making payments
but none has fructified. From the tenor of orders passed
earlier, it can easily be gauged that these proposals did not
inspire confidence. In this backdrop when the matter again
came on 26th March, 2014, and the contemnors insisted on
granting bail to them, this Court passed a conditional Order
granting interim bail to the contemnors; the condition being
that they deposit Rs.10,000/- crores. Out of this a sum of
Rs.5,000/- crores had to be deposited in cash before this Court
while the balance amount of Rs.5000/- crores had to be
secured by a bank guarantee of a nationalised bank, furnished
in favour of the SEBI. Upon compliance with those conditions
the contemnors were directed to be released from the custody
and the amount deposited by them to be transferred to the
SEBI.Since we are directly concerned with this order, we may,
as well, extract the same:
“We have gone through the fresh proposal filed on
25.3.2014. Through the same is not in compliance with
our Order dated 31.8.2012 or the Order passed by the
three-Judge Bench of this Court on 5.12.2012 in Civil
Appeal No.8643 of 2012 and on 25.2.2013 in I.A. No.
67 of 2013 in Civil Appeal No.9813 of 2011 with I.A.
No.5 of 2013 in Civil Appeal No.9833 of 2011, we are
inclined to grant interim bail to the contemnors who
are detained by virtue of our order dated 4.3.2014, on
the condition taht they would pay the amount of
Rs.10,000 crores – out of which Rs.5,000 crores to be
deposited before this Court and for the balance a Bank
Guarantee of a nationalised bank be furnished in favour
of S.E.B.I. and be deposited before this Court.
On compliance, the contemnors be released
forthwith and the amount deposited be released to
S.E.B.I.
We make it clear that this order is passed in
order to facilitate the contemnors to further raise the
balance amount so as to comply with the Court’s
Orders mentioned above.”
9. Instead of complying with the above directions Mr.
Subrata Roy Sahara filed Writ Petition (Crl.) No. 57 of 2014
challenging the validity of the order of this Court dated 4th
March, 2014 on the ground that the same was void and
non-est in the eyes of law. A declaration to the effect that
continued incarceration of the petitioner Mr. Subrata Roy
Sahara in custody was illegal and a writ of habeas corpus and
directions for release of the petitioner from custody were also
prayed for. The said writ petition was heard by a Bench
comprising Hon’ble K.S. Radhakrishnan and J.S. Khehar, J.J.
and came to be dismissed vide detailed judgment dated 6th
May, 2014.
10. Having traversed in brief, the otherwise long journey
of this case, we revert back to the IAs which are the subject
matter of the instant order. In the present I.As. No.101-103 of
2014 filed in Contempt Petitions (C) No.412 and 413 of 2012
and Contempt Petitions (C) No. 260 of 2013, the contemnors
have made the following prayers:
“(a) Lift the restrictions imposed by this Hon’ble Court
vide its order dated 21.11.2013 and SEBI’s order
dated 13.2.2013, in respect of operation of the
Bank Accounts/deposits/demat accounts/sale of
securities mentioned at Annexure-A;
(b) Lift the restrictions imposed by this Hon’ble Court
vide its order dated 21.11.2013 and SEBI’s order
dated 13.02.2013 in respect of the movable and
immovable properties mentioned in Annexure B,
9on condition that net proceeds (after costs and
taxes) thereof be utilized exclusively for payment
ordered by this Hon’ble Court.
(c) pass such further or other order as this Hon’ble
Court may deem fit and proper in the facts and
circumstances of the present case.”
11. Justice K.S. Radhakrishnan having demitted office
and, Justice J.S. Khehar having recused himself from the
further hearing of the case, the applications were listed before
us for urgent hearing on 19th May, 2014 when the same were
heard in part and directed to come up for continuation on 29th
May, 2014.
12. Appearing for the contemnors, Dr. Rajiv Dhawan
made a three-fold submission before us. Firstly, he contended
that the order passed by this Court on 26th March, 2014
granting interim bail subject to the conditions stipulated in the
said order deserved to be modified as the conditions stipulated
therein were not only onerous but incapable of being complied
with in the facts and circumstances of the case. Alternatively,
he contended that compliance with the conditions stipulated by
this Court would require sale of several items of immovable
properties held by Sahara Group of companies which sales can
be finalised only if the contemnors were enlarged from custody
with a view to enable them to negotiate the sale transactions.
He submitted that keeping in view the extent and nature of the
properties which shall have to be sold as also the amounts that
have been ordered to be deposited compliance with the
conditions stipulated by this Court is extremely difficult, if not
impossible, unless the contemnors are enlarged from jail and
allowed to take steps necessary for compliance. It was further
contended by Dr. Dhawan that the restraint orders against the
sale of the moveable and immoveable properties held by the
‘Saharas’ made it impossible for them to arrange compliance
unless the embargo placed upon such sale and transfer by this
Court’s Order dated 21st November, 2013 and that passed by
SEBI on 13th February, 2013 are lifted. He argued that even if
the contemnors were not enlarged on bail till such time the
directions issued by this Court on 26th March, 2014 were not
complied with, the restraint orders would prevent the
contemnors from raising necessary funds to comply with the
directions issued by this Court. He urged that the total amount
currently lying in several bank accounts and/or invested with
banks and companies in the form of FDs, Bonds and securities
etc. came to Rs.2500/- crores approximately. The broad
details of the amounts so available have been given by
Saharas in the note submitted by Dr. Dhawan as under:
Details of approx. Rs 2500 Crores along with interest
accrued thereon to be paid by Saharas within 5
working days of lifting the embargo (Pg 39 – 54)
a) Fixed Deposits 1688.74 crores
b) Savings Account 464.44 crores 
c) Current Account 18.45 crores
a) Securities & Bonds 142.86 crores 
b) Government Bonds 72.33 crores
c) Bank/PSU Bond 34.85 crores
-------------------
2421.67 crores 
------------------- 
Total approx. Rs 2500 crores along with interest accrued
thereon
13. Encashment of the FDs, sale and transfer of the
bonds and securities would, argued Dr. Dhawan, help the
contemnors to partly comply with the directions regarding
deposit of Rs.5000/- crores by moping Rs.2500/- crores. A
further sum of Rs.2500/- crores approximately would have to
be raised for deposit which will be possible only by sale of the
immovable properties situated in nine different cities details
whereof were filed by Dr. Dhawan in the form of a statement
with the estimated value of such properties which is as under:
Sr. No. Properties Valuation as per Page Nos. Of
12the Valuation
Report (Rs. In
crores)
Volume I
1. Pune 575 60 – 76 @ 73
2. Ahmedabad 470 81 -98 @ 94
3. Amritsar 153.75 99 – 127 @ 111
4. Chauma 1430 128 -148 @ 140
5. Vasai 1169.72 143 – 160 @ 149
6. Ajmer 160 161 -175 @ 167
7. Bhavnagar 103 176 – 191 @ 188
8. Jodhpur 112 192 -208 @ 204
9. Bhopal 125 209 – 224 222
TOTAL 4298.47
14. It was submitted that sale of the above items of
property may also not fully satisfy the conditions stipulated by
this Court for grant of interim bail thereby leave no option for
Saharas except to sell three other items of hotel properties
situated outside the country. One of these hotels by the name
Grosvenor House is situated in London while the remaining two
hotels are in New York (U.S.A.). It was urged that the said
three items of property also need to be sold to raise the
margin money which the banks concerned insist upon to
enable them to issue a bank guarantee. It was submitted that
while the contemnors propose to mortgage Aamby Valley
properties, details whereof are given in the Annexure B to
I.As. No.101-103, the contemnors would require funds to
service any financial arrangement made with the bank/banks.
It was also contended that according to the estimate of the
contemnors, the properties situated in London and New York
would fetch an amount of Rs.5,000/- crores to the contemnors
which may be utilised in full or in part towards the margin
money necessary for obtaining the bank guarantee(s). The
estimated value of these three properties is indicated by the
contemnors as under :
Shares of 
entities 
owning the 
following 
offshore 
properties 
Value as per 
the Valuation 
report
Expected Sales 
Value
Immediate 
Advances 
expected
Page No.
Grosvenor 
House, 
London
GBP 516,000,000
Rs 
50,929,200,000 
GBP 645,000,000
Rs 63,661,500,000
USD 50,000,000
Rs 2,900,000,000
667-Vol III
Plaza Hotel, 
New York
USD 
592,000,000
Rs 
34,336,000,000
USD 635,000,000
Rs 36,830,000,000
USD 50,000,000
Rs 2,900,000,000
415-Vol III
Dreams 
Downtown 
Hotel, New 
York
USD 
252,000,000
Rs 
14,616,000,000
USD 252,000,000
Rs 14,616,000,000
USD 50,000,000
Rs 2,900,000,000
231-Vol III
Total Rs 
115,107,500,000
USD 
150,000,000
Rs 
8,700,000,000
Net 
Realistic 
Equity 
Value to 
Sahara in 
India
Rs 50,366,156,000
15. On behalf of the respondent-SEBI it was argued by
Mr. Venugopal that he has no objection to the encashment of
the FD receipts and other securities and bonds etc. provided
the maturity value and sale consideration of such FDRs,
securities and bonds is directed to be deposited in the
designated bank account of SEBI viz. SEBI Sahara Refund
Account bearing No.012210110003740 with the Bank of India,
Bandra Kurla Complex Branch, Mumbai. As regards sale or
mortgage of properties situated in nine different cities
mentioned above, Mr. Venugopal submitted that appropriate
safeguards need be provided for such sale and transfer. Mr.
Venugopal suggested the following safeguards in this regard:
(i) Details of valuation, buyer(s) and terms of sales
together with letter (s) of intent be submitted in
advance to this Hon’ble Court;
(ii) Buyer(s) ought not to be related party/parties
qua the Sahara Group entities/Director etc. and
an affidavit of undertaking to that effect be filed
in this Hon’ble Court.
(iii) The sale proceeds be deposited by the buyer
directly to the designated Bank Account of SEBI
viz. “SEBI-Sahara Refund Account” bearing
No.012210110003740 with Bank of India,
Bandra-Kurla Complex Branch, Mumbai; and
(iv) Actual release of title deeds by SEBI to the buyer
be made only upon receipt of sale proceeds in
the aforementioned Bank Account.
16. A direction to the effect that the sale of the properties
shall not be for a price lesser than the circle rates prescribed
for the area where the properties are situated was also
suggested as an additional safeguard, by the learned counsel.
It was also submitted by Mr. Venugopal that so long as the
valuation of the assets situated outside the country is fair and
reasonable, the SEBI had no objection to the sale thereof to
enable the contemnors to raise funds necessary for compliance
with the directions of this Court. 
17. We have given our careful consideration to the
submissions made at the bar. It is apparent, from the
submissions made at the bar, that these IAs have two limbs:
In the first instance, the contemnors want relaxation in the
restraint orders over the Bank deposits and immovable
properties to comply with the directions of this Court regarding
deposit of the amounts. That part of the prayer does not pose
any difficulty, as the same is in aid of compliance with the
directions of this Court. Second set of prayers is for grant of
bail or relaxation of jail conditions in the interregnum. Here,
we have our reservations. We are not inclined to modify order
dated 26th March, 2014 granting interim bail to the contemnors
upon conditions stipulated in the said order. We say so because
the background in which the contemnors came to be
committed to the jail and the finding recorded by the Court
that they have at all earlier stages tried to adopt dilatory
tactics and avoided to comply with the orders passed by the
Court does not in our view call for any modification of the
terms on which the contemnors can be released. Dr. Dhawan
pleaded, in the alternative, that the least which could be done
was to shift the contemnors from Tihar Jail to a guest house
for incarceration to enable them to take decisions that are
necessary for compliance with the directions issued by this
Court. This request was opposed by Mr. Venugopal, according
to whom similar requests made repeatedly over several
hearings in the past have been declined by this Court,
although no specific order refusing the same was recorded. In
support of that submission, our attention was drawn to the
averments made by the applicant in I.As No.2 to 4 filed by
them on 20th May, 2014 which averments clearly show that
similar prayers were indeed made in the past also. 
18. Apart from the fact that the prayer now made is a
repetition of similar prayers made in the past which have not
cut any ice with the bench hearing the matter, we see no
reason to make a departure from the usual course in the
present case. The Bench has passed a conditional bail order
after due and proper consideration having regard to the
attendant circumstances including conduct of the contemnors.
The order can be modified only under very compelling
circumstances. The only reason given by the applicants is that
interim release or transfer of the contemnors to a guest house
would enable them to dispose of the properties speedily and
enable them to arrange for the requisite Bank Guarantees. We
don’t think so. It is noteworthy that the total amount to be
deposited is between Rs. 33000/- to Rs. 35000/- crores. To
show their bonafides, the contemnors have been directed to
deposit less than 1/3rd of that amount as a condition for bail.
After all, even when this part of the order is complied with and
the contemnors are set free, they will have to arrange the
deposit of the balance amount, which again is very substantial.
That apart, it is not the case of the contemnors that they or
anyone of them suffers from any medical condition that calls
for hospitalisation or an atmosphere conducive for recovery
from any disease. This Court has already issued directions
permitting visitation to those who need to visit the contemnors
in jail. That arrangement has not been found to be inadequate
as at present so to call for any change. 
19. The prayer for modification of the order, accordingly,
fails. 
20. We, however, find considerable merit in the
submission made by Dr. Dhawan that the restraint order
issued by the SEBI and by this Court forbidding transfer and
alienation of moveable and immoveable assets by the Sahara
Group of companies has the effect of preventing the
contemnors from complying with the directions of this Court
which require them to deposit Rs.5,000/- crores in cash
besides a bank guarantee for a similar amount of Rs.5,000/-
crores. While it is true that the contemnors stand committed
to prison for their non-compliance with the directions of this
Court, nothing should prevent them from taking steps to
comply with the said directions or the conditions subject to
which they have been granted interim bail. Restraint against
transfer of the assets by the contemnors and the companies
promoted by them precisely has the effect of doing so. The
question, however, is as to what extent should the orders of
restraint be modified. That aspect assumes importance
because of the fact that Saharas need to eventually deposit a
substantial amount which according to the current estimate
may be in the neighbourhood of Rs. 30,000 to Rs. 35,000
crores inclusive of interest accrued on the principal amount
Sale of valuable properties at a price lesser than the market
value of such assets is bound to prejudicially affect the interest
of the depositors and defeat the orders passed by this Court in
its letter and spirit. That is particularly so because according to
Mr. Venugopal, SEBI is unable to value the properties or
process the sale and transfer thereof. It was in that
background that we had indicated to Dr. Dhawan learned
counsel for the appellants that the restraint orders cannot be
lifted in toto and that Saharas should come forward with a
proposal for sale of such properties as were sufficient to
comply with the interim bail direction of this Court regarding
deposit of Rs.5,000/- crores in cash and a bank guarantee of
Rs.5.000/- in addition. Dr. Dhawan has pursuant to that
observation confined his prayer for permission to sell/transfer
only nine items of properties situated in nine different cities in
the country and disclosed the estimated value of such property
in the statement which we have extracted above. Dr. Dhawan
on instructions made a statement that although the note filed
by him mentions the names of nine different cities without
giving details of the properties situated in those cities but the
fact remains that the properties referred to in the note are
only nine in number and no more.
21. Keeping in view the total number of properties held
by Sahara Group of companies, transfer of sale and/or
mortgage of the nine items of properties situated in nine cities
mentioned in the note and extracted above should, in our
opinion, suffice to enable the contemnors to comply with the
26th March, 2014 directions of this Court. In order, however, to
ensure that the sale value is fair and reasonable, we need to
make it clear that no item of property shall be sold at a price
lesser than the circle value of the properties fixed for the area
where such property is located.
22. As regards properties situated in London and New
York we have by an interlocutory Order passed on 29th May,
2014 directed the contemnors to furnish certain additional
information necessary for permitting the sale of the said
assets. The information demanded includes
permission/approval from the Bank of China with whom the
said properties are mortgaged and shares held by Saharas for
repayment of the loans borrowed from the said bank
hypothecated/pledged. We have also directed Saharas to get
the amount outstanding towards the loan transactions qua the
said properties confirmed from the Bank of China so as to give
us a clear picture of the extent of liability that remains to be
discharged against the said assets. The fact that the valuation
reports regarding the three assets were prepared at the
instance of the Bank of China shall also have to be verified and
confirmed by the Bank of China, especially because no sale of
the assets in question can be permitted at a price lesser than
the price at which the said assets have been valued by the
valuers who are said to be valuers of repute. Directions
regarding sale of the assets outside the country can, therefore,
await the furnishing of information and verification of the facts.
23. In the result we dispose of these I.As with the
following directions:
(i) The prayer for modification of the terms
stipulated in our order dated 26th March, 2014
granting interim bail to the contemnors is
declined and the I.As to that extent dismissed.
(ii) Prayer for shifting the contemnors to a guest
house for continued custody and detention till
they comply with the directions of this Court for
their release on interim bail is also declined and
the I.As dismissed to that extent
(iii) Orders dated 21st November, 2013 passed by
this Court and that dated 13th February, 2013
passed by SEBI restraining sale and transfer of
moveable and immoveable properties held by
Saharas are modified to the following extent:
(a) FDs, bonds and securities held by Sahara Group
of companies may be encashed by the holders
thereof subject to the condition that the maturity
value/sale consideration of such FDs, bonds and
securities shall be deposited in the designated
bank account of SEBI referred to in the earlier
part of this order and details of such maturity
values and sale consideration furnished to this
Court on affidavit to be filed within four weeks
from the date the FDs, bonds and securities are
encashed, sold and/or transferred. 
(b) Immovable properties owned by Sahara Group of
companies situated in 9 different cities
mentioned in the note filed by Dr. Dhawan and
extracted in the body of this order with an
estimated value of Rs.2500/- crores are
permitted to be sold by the companies/other
entities persons in whose names such properties
are held subject to the condition that such sales
are not for a price lower than the estimated value
indicated in the statement filed before this Court
or the circle rates fixed for the area in which such
properties are situated. The seller shall furnish
to this Court the details of the valuation of the
properties sold and the terms of sales together
with a declaration that the purchasers is not a
related party qua Saharas. Needless to say that
upon deposit of the sale consideration the title
deeds of the property shall be released by SEBI
in favour of the purchaser(s).
(c) The sale consideration of the properties less
transaction cost and statutory dues on the same
shall be deposited with the SEBI to the extent the
same is necessary to make a total deposit of
Rs.5,000/- crores inclusive of the maturity value
and sale proceeds of the FDs, bonds and
securities etc. permitted to be encashed and sold
in terms of direction (iii) (a) above. The
balance/excess amount of the sale consideration
shall be deposited by Saharas in a separate
account to be opened in a nationalised bank
which deposit shall remain subject to further
orders of this Court. 
(d) Saharas are also permitted to charge its
immovable properties situated in Aamby Valley
(Pune), the details whereof are given in Annexure
B to IAs No.101-103, for purposes of furnishing a
bank guarantee for an amount of Rs.5,000/-
crores and/or for deposit of Rs.5,000/- crores if
there is any shortfall despite encashment and
sales permitted in terms of (iii)(a) and (iii)(b)
above.
(e) In modification of the orders dated 26th March,
2014, we direct that the Bank guarantees to the
tune of Rs.5000/- crores shall be furnished from
a nationalised bank or a scheduled bank only.
Co-operative Bank Guarantees shall not suffice. 
(iv) In so far as sale of the three properties situated
outside the country are concerned, the
question is left open to be determined after the
requisite documents/information is made
available by Sahara in terms of our order dated
29th May, 2014. 
(v) Keeping in view the importance of the issues
that fall for determination in these proceedings
and the ramifications that the directions issued
by this Court may have as also the fact that
one very important order which is sought to be
enforced in these proceedings was passed by a
three-Judge Bench, we refer these proceedings
to a three-Judge Bench to be constituted by the
Hon’ble Chief Justice of India.
(vi) We are further of the view that having regard
to the nature of these proceedings and the
stakes that are involved, we need to appoint an
amicus curiae. We accordingly, request Mr. F.S.
Nariman, Senior Advocate to assist the Court
as an amicus curiae. Shri Nariman shall be free
to associate two juniors of his choice to brief
him in the matter.
(vii) We direct that the Amicus curiae shall be paid
his fee @ Rs.1,10,000/- per hearing while the
juniors assisting him shall be paid Rs.10,000/-
per person for every hearing. The amount so
due shall be paid by SEBI by debit to account
Saharas. 
………………….……….…..…J.
 (T.S. THAKUR)
………………….……….…..…J.
 (A.K. SIKRI)
New Delhi
June 4, 2014
ITEM NO.1A COURT NO.3 SECTION XVII
 S U P R E M E C O U R T O F I N D I A
 RECORD OF PROCEEDINGS
I.A. No(s). 101-103 in Contempt Petition(s)(Civil) No(s). 412 &
413 of 2012 in Civil Appeal No(s). 9813 & 9833 of 2011 and
Contempt Petition(s) Civil Nos(s). 260 of 2013 in Civil Appeal
No(s). 8643 of 2012. 
S.E.B.I. .. Appellant(s)
 VERSUS
SAHARA INDIA REAL ESTATE CORPORATION LTD. & ORS.. Respondents(s)
Date : 04/06/2014 These applications were called on for 
pronouncement of judgment today.
For Appellant(s) Mr. Gaurav Nair, Adv.for
 M/s. K.J. John & Co.
For Respondent(s) Mr. S. Ganesh, Sr.Adv.
 Mr. Gaurav Kejriwal, Adv.
 Mr. Keshav Mohan, Adv.
 Mr. Sandeep Bajaj, Adv.
 Mrs.Shally Bhasin Maheshwari,Adv.
 Mr. Gautam Awasthi, Adv.
 Mr. Vishwa Pal Singh, Adv.
 Hon'ble Mr. Justice T.S. Thakur pronounced the judgment of
the Bench comprising His Lordship and Hon'ble Mr. Justice A.K.
Sikri.
 Keeping in view the importance of the issues that fall for
determination in these proceedings and the ramifications that
the directions issued by this Court may have as also the fact
that one very important order which is sought to be enforced in
these proceedings was passed by a three-Judge Bench, we refer
these proceedings to a three-Judge Bench to be constituted by
the Hon’ble Chief Justice of India.
 I.A.Nos.101-103 are disposed of in terms of the judgment.
(USHA BHARDWAJ) (RENUKA SADANA)
 AR-cum-PS COURT MASTER
(SIGNED REPORTABLE JUDGMENT IS PLACED ON THE FILE)
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