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C.A.8643/12

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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

          CIVIL APPEAL NO(s). 8643 OF 2012

 SAHARA INDIA REAL ESTATE EXCH.COR.LD.&AN          Appellant (s)

                VERSUS

 SECURITIES & EXCH.BOARD OF INDIA                  Respondent(s)   

WITH

W.P.(C)No.527 of 2012

O R D E R

  1. This appeal is directed against the judgment  

and order dated 29th November, 2012, passed by  

the  Securities  Appellate  Tribunal,  in  Appeal  

No.221  of  2012,  holding  that  the  same  was  

premature and was not, therefore, maintainable.

2. In  earlier appeals, being C.A.No.9813 of  

2011  and  C.A.No.9833  of  2011,  this  Court  was  

concerned with the powers of the Securities and  

Exchange  Board  of  India  (SEBI)  under  Section  

55A(b) of the Companies Act, 1956, to administer  

various  provisions  relating  to  issue  and  

transfer of securities to the public by listed

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2 companies or companies which intend to get their  

securities  listed  on  any  recognised  Stock  

Exchange in India and also  the question whether  

Optionally Fully Convertible Debentures, offered  

by the  appellants, should have been listed on  

any  recognised  Stock  Exchange  in  India,  being  

Public Issue under Section 73 read with Section  

60B and allied provisions of the Companies Act.  

The said appeals were heard and finally disposed  

of  on  31st August,  2012,  with  the  following  

directions:-   

“1. Saharas  (SIRECL  &  SHICL)  would  refund the amounts collected through RHPs  dated 13.3.2008 and 16.10.2009 along with  interest @ 15% per annum to SEBI from the  date of receipt of the subscription amount  till  the  date  of  repayment,  within  a  period of three months from today, which  shall be deposited in a Nationalized Bank  bearing maximum rate of interest.

2. Saharas  are  also  directed  to  furnish  the  details  with  supporting  documents  to  establish  whether  they  had  refunded any amount to the persons who had  subscribed  through  RHPs  dated  13.3.2008  and 16.10.2009 within a period of 10 (ten)  days from the pronouncement of this order  and it is for the SEBI (WTM) to examine  the correctness of the details furnished.

3. We  make  it  clear  that  if  the  documents  produced  by  Saharas  are  not  found genuine or acceptable, then the SEBI  (WTM) would proceed as if the Saharas had  not refunded any amount to the real and  genuine subscribers who had invested money  through  RHPs  dated  13.3.2008  and  16.10.2009.

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4. Saharas are directed to furnish all  documents in their custody, particularly,  the  application  forms  submitted  by  subscribers, the approval and allotment of  bonds and all other documents to SEBI so  as  to  enable  it  to  ascertain  the  genuineness of the subscribers as well as  the amounts deposited, within a period of  10  (ten)  days  from  the  date  of  pronouncement of this order.

5. SEBI (WTM) shall have the liberty  to engage Investigating Officers, experts  in  Finance  and  Accounts  and  other  supporting staff to carry out directions  and  the  expenses  for  the  same  will  be  borne by Saharas and be paid to SEBI.

6. SEBI  (WTM)  shall  take  steps  with  the  aid  and  assistance  of  Investigating  Authorities/Experts  in  Finance  and  Accounts  and  other  supporting  staff  to  examine the documents produced by Saharas  so as to ascertain their genuineness and  after  having  ascertained  the  same,  they  shall  identify  subscribers  who  had  invested the money on the basis of RHPs  dated 13.3.2008 and 16.10.2009 and refund  the amount to them with interest on their  production  of  relevant  documents  evidencing  payments  and  after  counter  checking the records produced by Saharas.

7. SEBI  (WTM),  in  the  event  of  finding  that  the  genuineness  of  the  subscribers  is  doubtful,  an  opportunity  shall  be  afforded  to  Saharas  to  satisfactorily establish the same as being  legitimate and valid.  It shall be open to  the  Saharas,  in  such  an  eventuality  to  associate  the  concerned  subscribers  to  establish their claims.  The decision of  SEBI (WTM) in this behalf will be final  and  binding  on  Saharas  as  well  as  the  subscribers.

8. SEBI  (WTM)  if,  after  the  verification of the details furnished, is  unable to find out the whereabouts of all

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4 or any of the subscribers, then the amount  collected  from  such  subscribers  will  be  appropriated to the Government of India.

9. We  also  appoint  Mr.  Justice  B.N.  Agrawal, a retired Judge of this Court to  oversee whether directions issued by this  Court  are  properly  and  effectively  complied with by the SEBI (WTM) from the  date of this order.   Mr. Justice B.N.  Agrawal  would  also  oversee  the  entire  steps  adopted  by  SEBI  (WTM)  and  other  officials  for  the  effective  and  proper  implementation of the directions issued by  this  Court.   We  fix  an  amount  of  Rs.5  lakhs  towards  the  monthly  remuneration  payable to Mr. Justice B.N. Agrawal, this  will  be  in  addition  to  travelling,  accommodation  and  other  expenses,  commensurate with the status of the office  held by Justice B.N. Agrawal, which shall  be  borne  by  SEBI  and  recoverable  from  Saharas.   Mr.  Justice  B.N.  Agrawal  is  requested  to  take  up  this  assignment  without  affecting  his  other  engagements.  We  also  order  that  all  administrative  expenses  including  the  payment  to  the  additional staff and experts, etc. would  be borne by Saharas.   

10. We  also  make  it  clear  that  if  Saharas  fail  to  comply  with  these  directions  and  do  not  effect  refund  of  money as directed, SEBI  can take recourse  to  all  legal  remedies,   including  attachment  and  sale  of  properties,  freezing  of  bank  accounts  etc.  for  realizations of the amounts.

11. We also direct SEBI(WTM) to submit  a  status  report,  duly  approved  by  Mr.  Justice B.N. Agrawal, as expeditiously as  possible,  and  also  permit  SEBI  (WTM)  to  seek further directions from this Court,  as and when, found necessary.  

The appeals were, therefore, dismissed with the  

aforesaid directions.

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5 3. As indicated above, the present appeal is  

directed  against  the  order  of  the  Securities  

Appellate  Tribunal,  in  the  Appeal,   being  

No.221  of  2012,  which  had  been  filed  on  27th  

November,  2012,  complaining  that  the  SEBI  had  

not  accepted  the  documents,  which  were  to  be  

furnished to it by the appellants, since they  

were  tendered  a  couple  of   days  after  the  

stipulated period.

4. We are not inclined to interfere with the  

substance of the order of the Tribunal impugned  

in this appeal.  The only question which we are  

inclined  to  consider  is  whether  the  time  for  

implementing  the  directions  contained  in  the  

earlier  order  of  31st August,  2012,  may  be  

extended or not.

5. Mr.  Gopal  Subramanium,  learned  senior  

counsel,  submitted  that  after  the  aforesaid  

order had been passed, certain amounts had been  

paid to investors and that according to them a  

sum of  ` 5120/- Crores remained to be paid to  

SEBI, out of the amount already indicated, for  

the purpose of distribution to the investors.

6. Having  heard  learned  senior  counsel,  Mr.  

Gopal Subramanium, appearing for the appellants,

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6 Mr.  Datar,  for  SEBI  and  Mr.  Vikas  Singh,  

appearing for Universal Investors Association &  

Ors., who has filed a separate Writ Petition, we  

are not inclined to accept the submissions made  

by Mr. Gopal Subramanium, at their face value,  

since, in the order of 31st August, 2012, it has  

been  indicated  that  if  any  payments  had  been  

made, the details thereof, along with supporting  

documents,  were  to  be  submitted  to  SEBI  to  

verify the same.    Essentially, the appellants  

have failed on both counts, since neither the  

amount  indicated  in  the  order,  together  with  

interest @ 15% per annum, accrued thereon, has  

been paid, nor have the documents been submitted  

within the time stipulated in the said order.  

The  reliefs  prayed  for  in  the  writ  petition  

filed  by  Universal  Investors  Association,  

amounts to a review of the order passed by this  

Court on 31.08.2012.     

7. We, therefore, dispose of the appeal and the  

writ  petition,  as  also  the  intervention  

applications with the following directions:-

(I) The appellants shall immediately hand over  

the Demand Drafts, which they have produced in

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7 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,  including  the  

amount mentioned above, together with interest  

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  

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 receipt of the said documents, SEBI  

shall implement the directions contained 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  contained  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, including

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8 attachment and sale of properties, freezing of  

bank accounts etc. for relisation of the balance  

dues.

8. Let a copy of this order be made available  

to  Mr.  Justice  B.N.  Agrawal,  who  has  been  

appointed by this Court, by tomorrow, to enable  

His Lordship to oversee the working of the Order  

of 31st August, 2012, and this Order passed by us  

today.

9. Having regard to the nature of the case, the  

appellants  shall  bear  the  costs  of  the  

respondent(s) in these proceedings.

10. In the event any excess payment is found to  

have been made by the appellants by virtue of  

the earlier Order and this Order, the same shall  

be refunded to the appellants by SEBI.

               ........................CJI.

(ALTAMAS KABIR)    

..........................J (SURINDER SINGH NIJJAR)

  ..........................J

            (J.CHELAMESWAR)         NEW DELHI;       December 05, 2012.

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ITEM NO.4               COURT NO.1             SECTION XVII

           S U P R E M E   C O U R T   O F   I N D I A                          RECORD OF PROCEEDINGS                     CIVIL APPEAL NO(s). 8643 OF 2012

SAHARA INDIA REAL ESTATE EXCH.COR.LD.&AN          Appellant (s)

                VERSUS ` SECURITIES & EXCH.BOARD OF INDIA                  Respondent(s)

(With appln(s) for ex-parte stay,permission to file synopsis and  list of dates and office report ))

WITH  W.P.(C)No.527 of 2012 (with office report)

Date: 05/12/2012  This Appeal was called on for hearing today.

CORAM :         HON'BLE  THE CHIEF JUSTICE         HON'BLE MR. JUSTICE SURINDER SINGH NIJJAR         HON'BLE MR. JUSTICE J. CHELAMESWAR

For Appellant(s) Mr. Gopal Subramanium, Sr. Adv. Mr. Mukul Rohatgi, Sr. Adv.  Mr. Ashok K.Parija, Sr. Adv.  Mr. Satish Kishanchandani, Adv.    

                   Mr. Gaurav  Kejriwal, AOR  Mr. Keshav Mohan, Adv.  Mr. Jatin Pore, Adv.  Mr. Devansh Mohta, Adv.  Mr. Mahesh Agarwal, Adv.  Mr. Gaurav Choudhary, Adv.  Mr. Nishint Agarwal, Adv.  

Mr. Ashok K.Parija, Sr. Adv.  Mr. Gaurav  Kejriwal, AOR

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10 In WP 527/12 Mr. Vikas Singh, Sr. Adv.  

Mr. Rudreshwar, Adv.  Mr. Chandra Prakash, AOR.

For Respondent(s) Mr. Arvind P.Datar, Sr. Adv.  Mr. Pratap Venugopal, Adv.  Ms. Surekha Raman, Adv.  Ms. Nupur Kanungo, Adv.  

                    for M/S. K.J. John & Co.,Advs.

Mr. Shailendra Singh, Adv.  /intervenor Mr. Kaushal Yadav, AOR.               UPON hearing counsel the Court made the following                                O R D E R   

The appeal and the writ petition, as also  the intervention applications are  disposed of  in terms of the signed order.

Let a copy of this order be made available  to  Mr.  Justice  B.N.  Agrawal,  who  has  been  appointed by this Court, by tomorrow, to enable  His Lordship to oversee the working of the Order  of 31st August, 2012, and this Order passed by  this Court today.

Having regard to the nature of the case, the  appellants  shall  bear  the  costs  of  the  respondent(s) in these proceedings.   

  (Sheetal Dhingra)

COURT MASTER (Juginder Kaur)

Assistant Registrar  [Signed order is placed on the file]