SC allows Roy 10 days for deal talks

Directs Delhi govt to notify conference hall in Tihar court complex as 'jail'

The Supreme Court on Friday allowed jailed Subrata Roy, the chief of the Sahara group, to stay in a conference hall in the Tihar jail court complex for 10 working days to negotiate the sale of group assets with prospective buyers. The court directed the Delhi government to notify the hall as a jail so daily movements between the barracks and the conference hall was not required and negotiations could be done beyond 8 pm, the official lock-in time of the jail.

But the court did not allow the Sahara group’s request for three support staff to stay overnight with Roy. The prison authorities said all visitors, including the two secretaries and a technical support person, could not stay in the facility declared as a jail beyond 8 pm. The Delhi government is likely to issue the necessary notification on Monday and the deal talks could begin on Tuesday. Sahara group directors Ravi Shankar Dubey and Ashok Roy Choudhary, imprisoned with Roy since March 4, will accompany him in the new jail. The move could enable Sahara to raise the money required for the interim bail of the trio by selling hotel assets in London and New York. The court had granted a conditional bail on the payment of Rs 10,000 crore — one half in cash and the other in bank guarantee. The group has deposited Rs 3,100 crore.  

However, the Securities and Exchange Board of India (Sebi) counsel Arvind Datar raised concerns that while the focus has been on getting the trio out on bail, nothing has been done on the swelling dues as the interest clock keeps ticking. According to the Supreme Court’s order of August 2012, two Sahara companies — Sahara India Real Estate Corp and Sahara Housing Investment Corp — were required to refund Rs 24,029 crore with an interest of 15 per cent.  

Datar said the dues are now over Rs 39,000 crore.

“The larger concern is the interest keeps mounting. Months and months are passing. They have not taken one step in repaying,” the Sebi counsel added. “ Please ask them to submit a plan when they are selling and what.”

Sahara counsel KTS Tulsi said: “Our priority is to fulfil the conditions of liberty. Once he is out, the circumstances would be different, value of property and price will be different.”

Judge T S Thakur said that Sebi’s concern is legitimate and underlined that the bail, when it materialises, would be interim and if the remaining sum is not paid within a reasonable time, the contemnors might have to return to jail. Tulsi said the group is conscious of the situation.  

At one point, when the Sahara lawyers brought back the argument of having already refunded bulk of the bond holders and pointed out that they did so by cash flow from other operations such as Sahara Q Shop, judge Thakur asked: “If you have taken the money from other such schemes to refund these investors, how are you going to handle those other depositors (when they come for refund)?”

The proceedings got a twist from the income tax department, which told the court that it has passed assessment orders against the two Sahara firms for a sum similar to the bail amount. The department’s counsel said: “The entire sum raised by the two firms have been declared as undisclosed income and we have passed orders for recovery of Rs 10,049 crore towards income tax dues.”

He said the department’s survey found that most depositors were ‘non-existent.’ Harish Salve, an expert in tax laws, appearing for Sahara pointed out that there is an “inherent inconsistency” in the positions of Sebi, which says it wants to refund investors and the income tax department, which says there are no investors. “It can’t be both,” said Salve.  

The judges also expressed concern over Sebi’s progress on refunds, when Datar informed the court that only Rs 1.08 crore has been refunded so far.