Sahara group chief Subrata Roy and two directors from his companies will remain in jail as the Supreme Court on Tuesday rejected Roy's petition challenging its earlier order sending them to jail two months ago in a contempt case against him.
The court, which rejected Roy'? plea to relax the bail condition by accepting his proposal to deposit Rs 5,000 crore by May 30 and remaining Rs 5,000 as bank guarantee to be furnished by June 20 to avail bail, asked him to file a fresh proposal after going through this judgment.
Coming down heavily on them, the apex court said they flouted court orders "with impunity", in 207-page strongly worded judgment, a bench of justices K S Radhakrishnan and J S Khehar said Sahara's two companies-SIRECL and SHICL have flouted the orders of Securities and Exchange Board of India, Securities Appellate Tribunal(SAT), High Court and also the Apex court by adopting "demeanour of defiance".
"The two companies-Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation Ltd (SHICL), of which the petitioner is a promoter, flouted orders passed by the SEBI (FTM), SAT, the High Court and of this Court, with impunity. Facts and information solicited were never disclosed. The position adopted by the two companies was always projected on the basis of unverifiable material.....," the bench said.
Referring to its August 31, 2012, the court said that two companies seemed to be totally unrealistic and could well be fictitious, concocted and made up, and also the affairs of the two companies seemed to be doubtful, dubious and questionable.
" The above position has remained unaltered, inasmuch as, no authentic and verifiable material sought has ever been furnished by the two companies. The two companies remained adamant while frittering away repeated opportunities granted by this court to comply with the orders of August 31, 2012 and December 5, 2012. The companies adopted a demeanour of defiance constituting a rebellious behaviour, not amenable to the rule of law," the court also said.
Roy and two of his directors- Ravi Shankar Dubey and Ashok Roy Choudhary(from SIREL and SHICL) have been lodged in Tihar Jail since March 4 for defying the courts order to return more than Rs 20,000 crore to the investors through market regulator SEBI.
The companies had collected huge money from investors towards the housing scheme and failed to return them.
The bench observed saying "Judicial orders are bound to be obeyed at all costs. Howsoever grave the effect may be, is no answer for non-compliance of a judicial order. Judicial orders cannot be permitted to be circumvented. In exercise of contempt jurisdiction, Courts have the power to enforce compliance of judicial orders, and also, the power to punish for contempt."
The court also rejected the Roy's argument that this bench should not hear the plea as the March 4 order was passed by them saying " We find no merit in the contention advanced on behalf of the petitioner (Roy), that we should recuse ourselves from the hearing of this case.
Calculated psychological offensives and mind games adopted to seek recusal of Judges, need to be strongly repulsed. We deprecate such tactics and commend a similar approach to other Courts, when they experience such behaviour."
Noting that the petitioners "systematically frustrated" the court order to deposit the investors' money, the bench said ".....Even proposals to secure the payments (as against, the payment itself) to be made to the investors, in terms of this Court's orders, were systematically frustrated. Similar proposals made unilaterally by learned Senior Counsel representing the two companies and the petitioner himself, turned out to be ploys to sidetrack and derail the process of law. Such unilateral proposals, were unilaterally withdrawn.
Since all the efforts to cajole the two companies and the petitioner were methodically circumvented, we started adopting sequentially harsher means to persuade compliance of this Court's orders", the verdict said.
Citing that about 81 days of hearings the matter stretching several hours, it termed "abuse of process of law" and suggested the legislature to come out with "Code of Compulsory Costs" where cost can be imposed on the party to curb the frivilous pleas.
" In this country, judicial orders are prepared, beyond Court hours, or on non-working days. It is apparent, that not a hundred, but hundreds of judge hours, came to be spent in the instant single Sahara Group litigation, just at the hands of the Supreme Court. This abuse of the judicial process, needs to be remedied. We are, therefore of the considered view, that the legislature needs to give a thought, to a very serious malady, which has made strong inroads into the Indian judicial system," the bench said.