SC directs Sahara Group to deposit Rs1,000 cr, allows it to form JV for developing Mumbai land

New Delhi: The Supreme Court on Thursday directed Sahara Group to deposit Rs 1,000 crore in a separate escrow account within 15 days and allowed it to enter into a joint venture for developing its land at Versova in Mumbai to realise Rs 10,000 crore. The amount of Rs 10,000 crore has to be deposited in SEBI-Sahara refund account for returning the investors' money, in compliance with the apex court's 2012 order.

A bench of Justices Sanjiv Khanna, MM Sundresh and Bela M Trivedi said in case the joint venture/development agreement is not filed in the court within 15 days, then it will sell the 12.15 million square feet of land at Versova on 'as is where is' basis. "We grant 15 days' time to SIRECL and SHICL (both Sahara Group companies) to comply with the statement made in court today. In case the joint venture/development agreement is not filed within 15 days, it will be open for this court to undertake sale of the Versova land on as is where is basis," it said.

The bench added, "The Rs 1,000 crore which will be deposited by a third party will be kept in escrow account, in case approval/permission (for joint venture agreement) is not granted by this court, the amount will be refunded to the said third party." It listed the matter for further hearing after a month. The top court allowed the Sahara group companies – Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation Ltd (SHICL) --which were directed to deposit around Rs 25,000 crore in 2012, to enter into joint ventures agreement for developing other properties also including the Aamby Valley project at Mumbai.

Pointing out that the Sahara Group is in "deep trouble" for not complying with the apex court's order since 2012, the bench said the joint venture or development agreements will be subject to approval of the court. "The two companies (SIRECL and SHICL) are also permitted to enter into negotiations for joint venture/development agreements with regard to other properties. However, before entering into JVs/development agreements they will seek permission of this court," the bench said. It clarified that money received from sale of any properties by the Sahara Group must be deposited in the SEBI-Sahara refund account. "The sale transaction should be above the circle rate or 10 percent below the circle rate. In case the sale transaction is 10 percent below the circle rate, then prior permission of the court will be taken," it directed after hearing counsel for SEBI and Sahara for the whole day.

It told senior advocate Kapil Sibal, appearing for the Sahara Group of companies, "You are in deep trouble. But, we are still giving you hope. Even after 10 years we are giving you a long rope. For 10 years, we have not seen the light of the day in this matter. We are stuck at the same figure that was 10 years back. Things have not at all moved." The bench noted that during the hearing both SIRECL and SHICL made an attempt to reconsider June 19, 2012, August 31, 2012, December 5, 2012 orders of the court, which directed for creation of SEBI-Sahara refund account for depositing around Rs 25,000 crore (a figure disputed by Sahara group). It said no reasons and grounds are made out for the court to reconsider the said orders and directions given in the order dated August 31, 2012 and it has attained finality as review plea was also dismissed on January 8, 2013.

It said that the court will at present not go into the interest over the principal liability fastened by the apex court in 2012 and noted that as per the 23rd status report filed by the Securities and Exchange Board of India (SEBI), Rs 15,569.27 crore is lying deposited in SEBI-Sahara refund account. During the hearing, SEBI said as per its record the principal liability on Sahara Group is Rs 25,781 crore, while the company claimed the principal amount asked by the court to deposit is around Rs 24,029.73 crore. Sibal, during the hearing, gave a roadmap for depositing the money in the SEBI-Sahara account, which said that the Sahara Group will develop its land at Versova and Aamby valley in Mumbai by forming joint ventures in one and half years and to establish its bonafide by depositing Rs 1,000 crore within 10 days.

The bench disagreed with the roadmap and said that Rs 1,000 crore piecemeal deposits would not work and the period of one and half years is a very long period. "We do not agree with your one and half year period roadmap. It's been over 10 years and nothing has moved. You have to deposit Rs 1,000 crore within 15 days and come up with a joint venture within this period or we will be appointing a court receiver for taking over the land and putting them on block," the bench said.

Senior advocate Arvind Datar, appearing for SEBI, said a sealed cover was deposited by Sahara Group earlier in the court in which it has given a list of 32 properties. "If things do not work out at Versova and Aamby Valley, then the court may think of opening the sealed cover and selling those 32 properties," he said. In a series of directions on August 31, 2012, the top court had directed SIRECL and SHICL to refund the amount collected from individual investors or group of investors, with interest of 15 per cent per annum to SEBI from the date of receipt of the subscription amount till the date of repayment within three months. In November 2023, Sahara Group chief Subrata Roy, who was earlier ordered to be taken into custody by the court in the matter, passed away at a private hospital in Mumbai.