Sahara group chief Subrata Roy will stay in Tihar jail till March 11 as the Supreme Court Friday turned down as unacceptable the firm's proposal to pay the entire amount of Rs.17,400 crore to SEBI in cash in six instalments at regular intervals of three months as security for the redemption of OFCDs.
A bench of Justice KS Radhakrishnan and Justice Jagdish Singh Khehar said: "You should bring a proposal which is acceptable and honourable. This is a dishonourable proposal."
Taking a pot shot at Sahara Group, Justice Khehar said: "You make us assemble and say you can't pay it. It is a big insult to make us assemble. You should have made a better proposal. You can't make a Supreme Court bench assemble for a person who is not willing to pay."
The court permitted Sahara's financial consultants and lawyers to meet Subrata Roy in Tihar every day between 10 a.m. and 12 noon to facilitate hammering out of a proposal for submitting the money to market regulator SEBI.
The court's order came after it was told that jail authorities were not allowing the financial consultants and the lawyers to access Subrata Roy in the jail.
"We can arrange a meeting but he must pay. Make a proper proposal," the court said as Sahara counsel CA Sundaram told the court that "one person who can find the money is not in a position to do it now. If he comes out, he can see what he can do."
This invoked a terse observation from the court that he (Roy) was free for last one and half year and now was in custody for last two days only.
The court once again reiterated its apprehension that the money mobilised through the OFCD belonged to identifiable investors. "Is there a single investor," asked Justice Khehar in response to senior counsel Ravi Shankar Prasad's submission that till date not a single investor has protested or raised any demand.
Even as the court trashed Sahara's proposal to make the payments in six instalments, SEBI counsel Pratap Venugopal disputed the amount cited by Sahara saying that the actual amount that the court had Aug 31, 2012 asked Sahara to pay was Rs.24,780 crore plus 15 percent interest till the date of debentures redemption to the investors.
Venugopal told the court that this amount today stood at Rs.37,000 crore.
The Sahara Group, in its proposal, said that its Rs.5,620 crore was already lying with the market regulator and the balance of Rs.17,400 crore it would pay in six instalments starting with payment of Rs.2,500 crore within three working days upon the lifting of the restriction on the operation of its bank accounts and deposits.
The market regulator had, on Feb 13 last year, frozen the bank accounts and attached the properties of Sahara India Real Estate Corporation Ltd and Sahara Housing Investment Corporation Ltd for its failure to comply with the Aug 31, 2012, order to deposit with the SEBI investors Rs.24,000 crore that its two companies had collected from investors through OFCD.
The attachment orders were effective on the top executive of two companies and Subrata Roy.
Sundaram told the court that Sahara would pay Rs.2,000 crore by July 31, Rs.2,500 crore by Oct 31, Rs.3,000 crore by Jan 31, 2015, Rs.3,500 crore by April 30, 2015, and the balance of Rs.3,900 crore by July 30, 2015.
Right in the morning, senior counsel Rakesh Dwivedi made a mention that Sahara companies wanted to make a proposal for depositing the money with SEBI and urged the court to consider it. The court asked Dwivedi to share their proposal with market regulator SEBI and asked later to respond to it at 11.30 a.m.
Venugopal told the court at 11.30 a.m. that he needed time till Monday so that he could take instructions from SEBI. However, he told the court that prima facie the amount mentioned by Sahara was wrong.
Venugopal also told the court that Sahara had already delayed the payment by one year and now was seeking another year and half to comply with the court's order.