Refunds made by Sahara after Aug 31 'not good': SC

SC adjourns contempt plea to July 17; directs Sebi to start refunding genuine investors.

The Supreme Court on Wednesday said any refunds made by the two Sahara group firms directly after the August 31 order cannot be considered good.

"Any payment made after our August 31...that's not a good payment. We will not accept it," Justice JS Khehar said.

The observation came during the hearing of the Securities and Exchange Board of India's petition against Sahara India Real Estate and Sahara Housing Invest.

On August 31, the apex court had ordered the two companies to submit Rs 24,029 crore (Rs 240.29 billion) with an interest of 15 per cent with Sebi, which will in turn refund it to some 29.6 million investors. The court adjourned the hearing of a contempt petition against two Sahara group companies to July 17.

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Sahara has so far deposited only Rs 5,120 crore (Rs 51.20 billion) with Sebi and claims that it has already repaid the remaining amount to the investors. Last week, Sebi had said the companies had refunded about Rs 4,748 crore (Rs 47.48 billion) directly after August 31 in direct violation of the court order.

Sahara counsel RamJethmalani said, they had to refund because some of the investors had approached for redemption before August 31. "Since there was some delay in tracing their documents, they were paid after the order."

The judge said, "You couldn't have done that." Sahara group claimed that there were panic attacks following the Sebi order.

"We had to file 30 FIRs to protect our offices. We have written to Sebi and even produced photographs," Jethmalani said.

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The Sebi counsel argued that there was no panic at all and the argument had been rejected by another bench on two earlier occasions.

Sebi also expressed frustration over Sahara companies repeated attempts to dodge its moves to attach their properties.

"Sebi passed an order on February 13. They don't give any document. Sebi sets a deadline of April 30. Then also they did not submit and wanted an extension till May 7. That also has passed."

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The court also directed Sebi to start refunding genuine depositors out of the part payment of Rs 5,120 crore deposited with Sebi by the companies. It also did not pass any directions on the Sebi petition seeking civil detention of Sahara group chief Subrata Roy Sahara.

Sebi counsel Arvind Datar sought to withhold repayment of those investors who had multiple accounts in their names since it had income tax and other implications. The bench allowed this also.

Out of some 21000 letters sent by Sebi, only about 280 investors have responded with the necessary documents. Of these, around 21 investors had multiple accounts, Sebi informed the court.