Sahara hopeful of Subrata Roy release, hearing on Apr 21

In a fresh development, Sahara on Thursday last submitted fresh proposal to the Supreme Court for the modification of Sahara Group chief Subrata Roy's bail conditions offering to make an upfront payment of Rs. 2500 crore within 4 working days and further payment of Rs. 2,500 crore within 60 days of the release of its group Chairman and other detenues.

The hearing before a bench of Justice KS Radhakrishnan and Justice JS Khehar is crucial in many terms. A battery of lawyers including eminent advocates Ram Jethmalani, Dr Rajeev Dhawan and S Ganesh, appearing on behalf of the group have almost made best efforts to convince the bench that its order of 4thMarch, 2014 to keep him in judicial custody stands in violation of the fundamental right to life and personal liberty as enshrined in Article 21 of the constitution.


“For depriving a person from his personal liberty, the authority may it be courts also, have to follow the due process of law but in the present case which is originating from contempt petition, neither charges have been framed nor the alleged contemnors been asked to present their reply and yet they have been incarcerated in Tihar jail”, argued the groups’ counsel during last proceedings.Ram Jethmalani also pressed court that Subrata Roy Sahara has been sent to jail without any charges having been framed against him. The three people are in jail, who do not know the charges against them, said Sahara group.

"If a person defies SC orders, he can be punished for disobedience under the Contempt of Courts Act. The procedure to try the contemnor is defined in ‘ Rules to Regulate Proceeding for Contempt of the Supreme Court, 1975’," stated the lawyers.

“But in this case none of those rules has been followed, which is a matter of concern even for the entire Bar because if the contempt matters would be decided in the present manner, it would be serious transgression of jurisdiction which the Supreme Court exercises,”urged Dr Dhawan.

Apart from terming Roy’s detention as absolutely illegal and unconstitutional, Sahara’s counsels, during the last two hearings,were able to convince the judges to mind SEBI’s alleged shrewdness, intending to harass the group.


Describing the business model and ground functioning of the two companies under Sahara India’s umbrella, Group’s counsel S. Ganesh submitted that since 95% of the amounts was raised through OFCDs in cash, it was obvious that the repayments would also be made in cash. The lawyers further argued that Section 73(2) of the Companies Act did not prohibit payment of money in cash and SEBI could not re-write the provisions of the section.

“Looking at the nature of companies” business, there was no restriction on repayment in cash, as admittedly 60 percent Indians do not have bank accounts which even RBI endorsed in its report of 28thAugust,2008”, stated Sahara counsel before the bench.

 
They further added that SEBI’s original order dated 23rd June, 2011 implied that the payments could be made in cash. In fact SEBI was informed way back in December 2012 that the money has been refunded in cash.

 The entire list along with original documents of all the OFCD investors have already been submitted by Sahara to SEBI.  These also include three relevant documents pertaining to redemption of each investor who has already been paid back - Original Bond, Application form initiating the investment and Redemption vouchers.


"The redemption vouchers clearly show how they have been redeemed - whether by cash or cheque. A copy of the voucher has also been submitted to the court, as sample," said the lawyers.

 The   counsel said that the group had earlier and now also presented the proposals to pay the amount not because it did not repay its investors but in-fact for getting its chief out of jail.

The Sahara head,Subrata Roy, and two directors have been under judicial custody for nearly 50 days now.


 Sahara claims that it has paid 95% of the OFCD money to investors, and had deposited the remaining amount with SEBI along with buffer.

"The amount of around Rs 5,600 crore   with interest is with SEBI and is still awaiting to be disbursed to investors for past 18 months. SEBI has confessed in court that till now it has disbursed only around 1 crore rupees to the investors till yet while on the other side SEBI has been demanding that the company must deposit another 20,000 crore rupees with it so that investors can be repaid," said Sahara counsels.

 
The bench is set to hear the matter at 2 pm on April 21.