In a setback to Sahara chief Subrata Roy, who has been in jail for the last three months, the Supreme Court today dismissed his plea to be put under house arrest but allowed the group to sell properties to mobilise Rs. 5,000 crore in cash and an equal amount in bank guarantee for securing his release.
"The prayer for shifting the contemnor outside the jail is dismissed," a bench of Justice TS Thakur and Justice AK Sikri said while reading the operative parts of the judgement that dealt with the modifications of the earlier order.
The Sahara chief, who is in Delhi's Tihar jail since 4 March, was earlier directed by the apex court to pay Rs 5,000 crore in cash and furnish a bank guarantee of Rs 5,000 crore as pre-condition for his release.
Sahara group has been given a go ahead to sell immovable properties in nine cities here, the bench said in its verdict today and made it clear that they will not be sold below the circle rate and buyers should not be "connected or related" to the group.
The sale proceeds will be deposited in a separate bank account, maintained by market regulator SEBI, which, in turn, will release the title deeds of the properties in favour of the purchasers, it said.
The bench also lifted the curb put on encashment of Sahara group's fixed deposits and bonds and said that they will also be kept by the market regulator.
Dealing with the issue of sale of equities held by Sahara group in three offshore hotels, the bench said it is keeping the issue open as the group has to file an affidavit relating to its communication with the Bank of China which had lent it money.
The bench, which allowed Sahara group to mortgage its properties in Amby valley in Pune for arranging the bank guarantee, said that the guarantee, to be furnished, either be given from a nationalized or a scheduled bank. It said bank guarantee of a cooperative bank will not "suffice".
The bench rejected the fresh proposal of Sahara group about the payment schedule under which the group said it would like to deposit Rs 3,000 crore cash in five days and another Rs 2,000 crore in cash in the next 30 days thereafter.
The group would be furnishing a bank guarantee for the rest of Rs 5,000 crore in 60 days after selling its equities in hotels, one in London and two in New York, it said.
The bench referred the matter to larger three-judge bench which will be constituted by Chief Justice RM Lodha.
It, meanwhile, appointed senior advocate FS Nariman as an amicus curiae to assist the court in the case and said that he will be given Rs 1.10 lakh fees per hearing and the money shall be paid by SEBI, which, in turn, will deduct it from the account of Sahara group.
The court said if Nariman accepts the proposal for appointment as amicus curiae, he will be at liberty to take help of junior lawyers and they will be given Rs 10,000 each per hearing.
The bench, which was constituted after Justice JS Kehar had recused himself, had reserved the judgement on 29 May after hearing arguments from the counsel of Sahara Group and the SEBI on the fresh plea of Roy.
Immediately after the judgement was pronounced, advocates appearing for Sahara, Keshav Mohan and Gaurav Kejriwal, submitted that the permission to sell foreign properties was vital as the group was dependent on them for raising the money in a fast manner.
However, the bench said the issue can be raised before the larger bench.
The court also said that the faster way of reaching near the target for the Sahara was to utilize the money already lying in the bank.
Senior advocate S Ganesh, also appearing for Roy, made an oral plea that the court should consider granting five days of relief like 'parole' to Sahara chief to meet his 92-year-old ailing mother who is in a bad shape.
The bench said to consider such plea a formal application has to be filed as it would require verification of the facts considering the nature of matter.
Senior advocate Rajiv Dhawan, also appearing for Roy, had said that the Sahara chief is the main decision maker and it will be quite "improbable" to strike a deal for arranging the money if he is in jail and hence, he can be put under house arrest outside jail at his expense.
The counsel for SEBI, however, had opposed the plea saying this prayer has been declined several times in the past. 65-year-old Roy, who was sent to jail for non-refund of over Rs 20,000 crore to depositors, was asked by the court to make a fresh proposal for paying Rs 10,000 crore to get bail.
The Sahara group, however, had been claiming that it has already repaid money to 93 percent investors. The court had passed the order on a plea filed by Roy challenging constitutional validity of its order passed on 4 March by which he was sent to jail for not complying with its order to deposit around Rs 20,000 crore of investors money with SEBI.
The bench, in a strongly-worded judgement, had come down heavily on the group for "systematically" frustrating and flouting all its orders with impunity on refunding investors' money.
It had said Sahara "adopted a demeanour of defiance constituting a rebellious behaviour, not amenable to the rule of law" and justified its decision to send Roy along with two promoters of two Sahara companies to jail.