Supreme Court Directs Sahara to Deposit Rs 1,000 Cr for Mumbai Project

The Supreme Court has instructed the Sahara Group to deposit Rs 1,000 crore into an escrow account within 15 days. This directive allows Sahara to enter a joint venture for developing its Versova land in Mumbai, aiming to raise Rs 10,000 crore. This amount must be deposited in the SEBI-Sahara refund account to comply with the court's 2012 order.

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Joint Venture and Compliance

The bench, comprising Justices Sanjiv Khanna, MM Sundresh, and Bela M Trivedi, stated that if the joint venture agreement is not filed within 15 days, the court will sell the Versova land on an "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.

Escrow Account and Future Hearings

The court specified that the Rs 1,000 crore deposited by a third party will remain in escrow. If the joint venture agreement isn't approved by the court, this amount will be refunded to the third party. The matter is scheduled for further hearing after a month.

Additional Property Development

The Supreme Court also permitted Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation Ltd (SHICL) to enter joint ventures for developing other properties, including Mumbai's Aamby Valley project. However, these agreements require court approval before proceeding.

SEBI-Sahara Refund Account

The bench clarified that any money from property sales by Sahara must go into the SEBI-Sahara refund account. Sales transactions should be above or up to 10% below the circle rate; otherwise, prior court permission is needed.

Senior advocate Kapil Sibal, representing Sahara, was told by the bench, "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."

During hearings, both SIRECL and SHICL attempted to reconsider previous orders from June and August 2012 and December 2012. These orders mandated creating a SEBI-Sahara refund account for depositing around Rs 25,000 crore—a figure disputed by Sahara.

Finality of Previous Orders

The bench noted no grounds for reconsidering these orders as they attained finality with a review plea dismissal on January 8, 2013. The court will not currently address interest over principal liability set in 2012.

According to SEBI's latest status report, Rs 15,569.27 crore is deposited in the SEBI-Sahara refund account. SEBI claims Sahara's principal liability is Rs 25,781 crore; however, Sahara contends it is around Rs 24,029.73 crore.

Sibal proposed a roadmap for depositing funds into the SEBI-Sahara account by developing Versova and Aamby Valley lands through joint ventures within one and a half years. He suggested establishing good faith by depositing Rs 1,000 crore within ten days.

The bench rejected this roadmap due to its extended timeline. "We do not agree with your one and half year period roadmap. Its 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," it said.

Senior advocate Arvind Datar for SEBI mentioned that Sahara had earlier submitted a sealed cover listing 32 properties in court. If plans at Versova and Aamby Valley fail, the court may consider selling these properties.

In August 2012, the top court directed SIRECL and SHICL to refund amounts collected from investors with a 15% annual interest to SEBI within three months from receipt of subscription until repayment.

In November 2023, Subrata Roy of Sahara Group passed away at a private hospital in Mumbai after being ordered into custody by the court earlier in this matter.

The Supreme Court's directives aim to ensure compliance with its orders while providing some leeway for Sahara Group to resolve its financial obligations through property development ventures.