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

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including  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

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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

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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

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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  per  cent,  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  the  interest,  as  calculated,  shall  be  de- posited 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 receipt of the said documents,  SEBI shall  implement the directions con- tained in the order passed on 31st August, 2012. In default  of  deposit  of  the  said  documents  within  the stipulated period, or in the event of default of deposit of  either  of  the two installments,  the directions con- tained  in  paragraph 10 of  the  aforesaid  order  dated 31st August, 2012, shall immediately come into effect and SEBI will be entitled to take all legal remedies, in- cluding attachment and sale of properties, freezing of bank accounts etc. for realisation of the 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

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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

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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

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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

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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,

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on 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

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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

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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  

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the 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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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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