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TMI Blog2014 (10) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... stipulated in the said order. Background in which the contemnors came to be committed to the jail and the finding recorded by the Court that they have at all earlier stages tried to adopt dilatory tactics and avoided to comply with the orders passed by the Court does not in our view call for any modification of the terms on which the contemnors can be released. Dr. Dhawan pleaded, in the alternative, that the least which could be done was to shift the contemnors from Tihar Jail to a guest house for incarceration to enable them to take decisions that are necessary for compliance with the directions issued by this Court. This request was opposed by Mr. Venugopal, according to whom similar requests made repeatedly over several hearings in the past have been declined by this Court, although no specific order refusing the same was recorded. The Bench has passed a conditional bail order after due and proper consideration having regard to the attendant circumstances including conduct of the contemnors. The order can be modified only under very compelling circumstances. The only reason given by the applicants is that interim release or transfer of the contemnors to a guest house w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration the title deeds of the property shall be released by SEBI in favour of the purchaser(s). The sale consideration of the properties less transaction cost and statutory dues on the same shall be deposited with the SEBI to the extent the same is necessary to make a total deposit of ₹ 5,000/- crores inclusive of the maturity value and sale proceeds of the FDs, bonds and securities etc. permitted to be encashed and sold in terms of direction (iii) (a) above. The balance/excess amount of the sale consideration shall be deposited by Saharas in a separate account to be opened in a nationalised bank which deposit shall remain subject to further orders of this Court - Saharas are also permitted to charge its immovable properties situated in Aamby Valley (Pune), the details whereof are given in Annexure B to IAs No.101-103, for purposes of furnishing a bank guarantee for an amount of ₹ 5,000/-crores and/or for deposit of ₹ 5,000/- crores if there is any shortfall despite encashment and sales permitted in prescribed terms. - Decided partly in favour of Appellant. - CIVIL APPEAL NOS. 9813 & 9833 OF 2011 AND 8643 OF 2012 CONTEMPT PETITION (C) NOS. 412-413 OF 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fund the amount collected from the investors within a period of six weeks. 3. Appeals No.9813 and 9833 of 2011 were then preferred by Saharas against the above orders in which this Court by an order dated 28th November, 2011 extended the period for making the refund upto 9th January, 2012 but finally disposed of the appeals by an order dated 31st August, 2012. This Court while doing so modified the order passed by the SEBI and the SAT and directed Saharas to deposit with the SEBI the amount collected by them through their RHPs together with interest @ 15% p.a. within a period of three months. The amount when deposited was directed to be invested in a nationalised bank to earn interest. Saharas were also directed to furnish details with supporting documents to establish whether they had refunded any amount to the investors who had subscribed through the RHPs in question. SEBI was then to examine the correctness of the details so furnished. Failure to prove the refund of the amount by Saharas had to give rise to an inference that Saharas had not refunded the amount to the real and genuine subscribers as directed by the SEBI. 4. It is common ground that directions issued by this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese contempt petitions and arise out of the earlier orders passed. 6. It is pertinent to point out at this stage that in the course of the proceedings in the above contempt petitions some proposals appear to have been explored by the parties for compliance with the directions of this Court but all such proposal were found to be unsatisfactory eventually leading to the issue of non-bailable warrants against Mr. Subrata Roy Sahara for his production before this Court. Three other Directors of Saharas were also ordered to remain present before this Court. 7. On 4th March, 2014 when the contemnors appeared before this Court one of them in custody, this Court recorded a finding that the directions issued by the Court by its order dated 31st August, 2012 and 5th December, 2012 and those issued on 25th February, 2013 in CA No.8643 of 2012 and IA No.67 of 2013 had not been complied with, despite sufficient opportunities to the contemnors to do so. It was also held that contemnors had adopted dilatory tactics to delay the proceedings before the SEBI, the High Court and even before this Court. It was further found that no acceptable proposal was presented to comply with the directions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s Orders mentioned above. 9. Instead of complying with the above directions Mr.Subrata Roy Sahara filed Writ Petition (Crl.) No. 57 of 2014 challenging the validity of the order of this Court dated 4th March, 2014 on the ground that the same was void and non-est in the eyes of law. A declaration to the effect that continued incarceration of the petitioner Mr. Subrata Roy Sahara in custody was illegal and a writ of habeas corpus and directions for release of the petitioner from custody were also prayed for. The said writ petition was heard by a Bench comprising Hon'ble K.S. Radhakrishnan and J.S. Khehar, J.J. and came to be dismissed vide detailed judgment dated 6th May, 2014. 10. Having traversed in brief, the otherwise long journey of this case, we revert back to the IAs which are the subject matter of the instant order. In the present I.As. No.101-103 of 2014 filed in Contempt Petitions (C) No.412 and 413 of 2012 and Contempt Petitions (C) No. 260 of 2013, the contemnors have made the following prayers: (a) Lift the restrictions imposed by this Hon'ble Court vide its order dated 21.11.2013 and SEBI's order dated 13.2.2013, in respect of operation of the Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bail till such time the directions issued by this Court on 26th March, 2014 were not complied with, the restraint orders would prevent the contemnors from raising necessary funds to comply with the directions issued by this Court. He urged that the total amount currently lying in several bank accounts and/or invested with banks and companies in the form of FDs, Bonds and securities etc. came to ₹ 2500/- crores approximately. The broad details of the amounts so available have been given by Saharas in the note submitted by Dr. Dhawan as under: Details of approx. ₹ 2500 Crores along with interest accrued thereon to be paid by Saharas within 5 working days of lifting the embargo (Pg 39 - 54) ( a ) Fixed Deposits 1688.74 crores ( b ) Savings Account 464.44 crores ( c ) Current Account 18.45 crores ( a ) Securities Bonds 142.86 crores ( b ) Government Bonds 72.33 crores ( c ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the banks concerned insist upon to enable them to issue a bank guarantee. It was submitted that while the contemnors propose to mortgage Aamby Valley properties, details whereof are given in the Annexure B to I.As. No.101-103, the contemnors would require funds to service any financial arrangement made with the bank/banks. It was also contended that according to the estimate of the contemnors, the properties situated in London and New York would fetch an amount of ₹ 5,000/- crores to the contemnors which may be utilised in full or in part towards the margin money necessary for obtaining the bank guarantee(s). The estimated value of these three properties is indicated by the contemnors as under : Shares of entities owning the following offshore properties Value as per the Valuation report Expected Sales Value Immediate Advances expected Page No. Grosvenor House, London GBP 516,000,000 ₹ 50,929,200,000 GBP 645,000,000 ₹ 63,661,500,000 USD 50,000,000 ₹ 2,900,000,000 667-Vol III ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed for the area where the properties are situated was also suggested as an additional safeguard, by the learned counsel. It was also submitted by Mr. Venugopal that so long as the valuation of the assets situated outside the country is fair and reasonable, the SEBI had no objection to the sale thereof to enable the contemnors to raise funds necessary for compliance with the directions of this Court. 17. We have given our careful consideration to the submissions made at the bar. It is apparent, from the submissions made at the bar, that these IAs have two limbs: In the first instance, the contemnors want relaxation in the restraint orders over the Bank deposits and immovable properties to comply with the directions of this Court regarding deposit of the amounts. That part of the prayer does not pose any difficulty, as the same is in aid of compliance with the directions of this Court. Second set of prayers is for grant of bail or relaxation of jail conditions in the interregnum. Here, we have our reservations. We are not inclined to modify order dated 26th March, 2014 granting interim bail to the contemnors upon conditions stipulated in the said order. We say so because the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court has already issued directions permitting visitation to those who need to visit the contemnors in jail. That arrangement has not been found to be inadequate as at present so to call for any change. 19. The prayer for modification of the order, accordingly, fails. 20. We, however, find considerable merit in the submission made by Dr. Dhawan that the restraint order issued by the SEBI and by this Court forbidding transfer and alienation of moveable and immoveable assets by the Sahara Group of companies has the effect of preventing the contemnors from complying with the directions of this Court which require them to deposit ₹ 5,000/- crores in cash besides a bank guarantee for a similar amount of ₹ 5,000/-crores. While it is true that the contemnors stand committed to prison for their non-compliance with the directions of this Court, nothing should prevent them from taking steps to comply with the said directions or the conditions subject to which they have been granted interim bail. Restraint against transfer of the assets by the contemnors and the companies promoted by them precisely has the effect of doing so. The question, however, is as to what extent sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional information necessary for permitting the sale of the said assets. The information demanded includes permission/approval from the Bank of China with whom the said properties are mortgaged and shares held by Saharas for repayment of the loans borrowed from the said bank hypothecated/pledged. We have also directed Saharas to get the amount outstanding towards the loan transactions qua the said properties confirmed from the Bank of China so as to give us a clear picture of the extent of liability that remains to be discharged against the said assets. The fact that the valuation reports regarding the three assets were prepared at the instance of the Bank of China shall also have to be verified and confirmed by the Bank of China, especially because no sale of the assets in question can be permitted at a price lesser than the price at which the said assets have been valued by the valuers who are said to be valuers of repute. Directions regarding sale of the assets outside the country can, therefore, await the furnishing of information and verification of the facts. 23. In the result we dispose of these I.As with the following directions: (i) The prayer for modification of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (iii) (a) above. The balance/excess amount of the sale consideration shall be deposited by Saharas in a separate account to be opened in a nationalised bank which deposit shall remain subject to further orders of this Court. (d) Saharas are also permitted to charge its immovable properties situated in Aamby Valley (Pune), the details whereof are given in Annexure B to IAs No.101-103, for purposes of furnishing a bank guarantee for an amount of ₹ 5,000/-crores and/or for deposit of ₹ 5,000/- crores if there is any shortfall despite encashment and sales permitted in terms of (iii)(a) and (iii)(b) above. (e) In modification of the orders dated 26th March, 2014, we direct that the Bank guarantees to the tune of ₹ 5000/- crores shall be furnished from a nationalised bank or a scheduled bank only. Co-operative Bank Guarantees shall not suffice. (iv) In so far as sale of the three properties situated outside the country are concerned, the question is left open to be determined after the requisite documents/information is made available by Sahara in terms of our order dated 29th May, 2014. (v) Keeping in view the importance of the issues that fall for dete ..... X X X X Extracts X X X X X X X X Extracts X X X X
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