Regulations
SC allows Sahara to arrange bank guarantee to comply with court order

The court accepted Sahara's proposition, given by Sibal, that the bank guarantee shall only be encashed by the market regulator upon the directions of the court

 

The Supreme Court on Friday allowed Sahara to arrange a bank guarantee of Rs5,000 crore in the favour of the capital market regulator to comply with the conditions for the release of its chief Subrata Roy and two other directors who are in custody in Delhi's Tihar jail since March 4, 2014.
 
A bench of Justice T.S.Thakur, Justice Anil R. Dave and Justice A.K.Sikri allowed Sahara to go ahead with arranging the guarantee from a scheduled bank, after amicus curiae Shekhar Naphade and senior counsel Arvind Datar appearing for the Securities and Exchange Board of India (SEBI) okayed the format while informing the court that Sahara have not disclosed the bank's name.
 
The apex court by its March 26, 2014 order had said that Sahara would be paying Rs10,000 crore towards refund of the investors money out of which Rs5,000 crore would be in cash and Rs5,000 crore in bank guarantee. The court had said this this too would be condition for the release of Roy and two other directors - Ashok Roy Choudhary and Ravi Shankar Dube - from judicial custody. 
 
On Friday, the court did not accept the SEBI's submission that the encashment of the bank guarantee, which Sahara would be furnishing, would be subject to the time frame in which it would be making full payment of the balance amount of the investors money as ordered by the court August 31, 2012.
 
The court also did not accept SEBI's submission that the acceptance of Rs10,000 crore - Rs5,000 crore cash and Rs5,000 crore bank guarantee - was subject Sahara indicating the time line in which they would refund the balance amount.
 
Senior counsel Kapil Sibal, appearing for Roy, contested SEBI's position saying what was being said by the market regulator was not flowing from March 26, 2014 apex court order.
 
The court accepted Sahara's proposition, given by Sibal, that the bank guarantee shall only be encashed by the market regulator upon the directions of the court. 
 
The apex court by its August 31, 2012 order had asked Sahara group'ss two companies - Sahara India Real Estate Corp Ltd. (SIRECL) and Sahara Housing Investment Corporation Limited (SHICL) - to return investors Rs24,600 crore along with 15% interest.
 
Two Sahara companies had moped up this money from investors through optionally fully convertible debentures (OFCSs) in 2007 and 2008.
 
The court fixed May 14 as the next date of hearing as Sibal said that they would tell the court about the steps taken by the Sahara to comply with the court's March 26, 2014, directions.
 
On the next hearing, the court will also hear Sahara's plea that it may be allowed to retain with it the excess amount that it would get from the proceeds of its transactions to raised Rs10,000 crore for the payment of the statutory dues and employees' salaries and depositing of their provident fund dues.
 
As SEBI counsel Arvind Datar red-flagged the plea, the court told him that all the assets of Sahara are under freeze and they have to discharge their statutory obligations.
 
Telling Datar that discharge of statutory obligations take precedence over their liabilities, the court said that it would consider the plea on the next hearing.
 

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COMMENTS

Vaibhav Dhoka

2 years ago

Such cases take high time and ordinary public is denied justice when prime time is taken by these cases.One thing is clear from this and Salman Khan Hit and Run case that that judiciary does not follow equality that is guaranteed by constitution.One requires money and contacts while stepping Justice system.The question in everybody mind today is: Do all gets such electrifying hearing in appeal as in Salman case?Or one has to wait for generations to get JUSTICE.The lawyers fees as informed throe' social media will make many litigants to suicide,if he is entangled in legal battle in his lifetime.

Frame rules for selection of Information Commissioners, MAT tells state govt
Maharashtra Administrative Tribunal while passing strictures on process of appointing information commissioners, had asked the state government to frame rules for selection of State Chief Information Commissioner and information commissioners within eight weeks
 
Ahmednagar resident John Kharat and also an applicant for the post of information commissioner, had approached the Maharashtra Administrative Tribunal (MAT), challenging the selection of the State Chief Information Commissioner as well as Information Commissioners PW Patil (Nagpur), DB Deshpande (Aurangabad) and MS Shah (Nashik) in 2010. He has received a shot in the arm, with the MAT coming hard on the haphazard and secretive manner in the selection of these crucial posts.
 
The MAT order dated 16 April 2015 has directed the chief secretary of Maharashtra to frame Rules for the selection of the post of State Chief Information Commissioner (SCIC) and Information Commissioners (ICs) within eight weeks of the order. Besides, it has made some strong observations of the prejudiced and casual manner in which the High Powered Committee which is responsible for selecting information commissioners, functions.  
“It is indeed a slap in the face of the bureaucracy,’’ says Right to Information (RTI) activist, Vijay Kumbhar who is fighting a case in the High Court for the same reason of lack of transparency in the appointment of ICs.
 
Moneylife reproduces the observations and recommendations from the 73-page order:
 

OBSERVATIONS:

The tribunal observed, “…we are of the view that while scouting for the said posts, the High Powered Committee will have to make sure that the area of resources is sufficiently large so as to attract and ensure the appointment of the best talent for these important posts. Now, going by the record, such as it is, we find that 72 applicants were considered or so the respondents claim they were. PW Patil was a retired Joint Registrar of Cooperative Societies. MS Shah was a retired secretary in PWD having retired on 30 April, 2009. DB Deshpande was also a senior most officer in PWD. He has also retired. We are conscious of the fact that the Information Act having been enacted only in the year 2005 at the time relevant hereto, it was still early days in so far as a large number of factor and aspects connected therewith are concerned. That will be one fact that may have to be borne in mind. However, we must note that the kind of wider source from the fields of law, science and technology etc. were apparently not taken into account with the kind of seriousness that they should have been.”
 
Citing the recommendations of the Supreme Court in the Namit Sharma case, the Tribunal observes in its order, “…in so far as the present facts are concerned, there is no material to show as to what the state of affairs was with regard to the 68 candidates other than the 4 selected…”
 
“…it seems on the basis of record such as it is that the High Powered Committee did not frame any rules as such for the purposes of making appointments in the said posts…”
 
“…now what happened here as would become clear from the record, is that there was no advertisement as such. There was no exact date on which the process commenced. There was no exact preform of application and we may only note that even the Applicant made an application for being considered for the post of Information Commissioner addressed the Chief Secretary of State of Maharashtra on 1.7.2006, his application was acknowledged on 25 March, 2008…It was on 9.4.2008 that a Desk Officer, GAD wrote to the Applicant informing him that his personal details have been received and he would be informed of the decision…It was on 9.2.2009 that the same authority asked the applicant if he was willing to served anywhere in the State. By his reply, the Applicant gave his consent to both the options…”
 
“…meetings for appointments of the Information Commissioners were convened in so far as Nashik is concerned on 26.5.2009, 30.6.2010, 12.7.2010 and 14.9.21010 and on all these dates, the meetings were deferred. The meeting ultimately took place on 6.10.2010…the meeting to select the Information Commissioner, Aurangabad was held on 6.10.2010 and in that meeting itself, the decision were taken with regard to the said posts for Nagpur and of the Chief information Commissioner. It would further appear that for Nashik, there are as many as 29 applicants, but except for the applicant (who was selected) no details are there in respect of the other 29 applicants. It is also clear that the applicants was ultimately appointed for Nashik.”
 
“We find from the record that the applicant who was selected addressed a communication directly to the Chief Minister on 25.5.2009 where under he also submitted his bio data….there is a strong recommendation from the deputy chief minister for this applicant (Respondent 4 – MH Shah)
 

THE ORDER BY MAT

There is an urgent need to make rules consistent with the provisions of Right To Information Act, 2005 especially Section 15 thereof for selections to the posts of Chief Information Commissioner and Information Commissioners. It will be desirable to have the rules in place much before the next selection is taken up for consideration by the High Powered Committee under the Information act. The directions of the Hon’ble Supreme Court in Namit Sharma’s case (reviews judgment) be carefully perused and implemented.
 
It will be within the discretion of the Committee to fix the eligibility criteria for the said posts. But there again, the provisions of the Information Act may be strictly followed and it be ensured that the legislative mandate to have eminent persons from all the various disciplines like Law, Science and Technology etc should be given full scope to complete. The criteria should be duly publicised well in advance before the selection process begins. Sufficiency and mode of publicity of the said criteria will be within the discretion of the Committee
 
The selection process must be transparent and definitive without any scope for apprehension of partiality, favouritism and such other vices. There must be a definitive time frame from the commencement of the said process till its conclusion without submission of the recommendations to His Excellency, the Governor. The details of the course of action in this behalf are left to the discretion of the committee but the following measures can be commended for consideration and effectuation: i)An officer of senior rank must be appointed to perform the duties akin to what in relation to several such committees is called Member Secretary…; The Committee may make sure that a proper schedule is appointed for the selection process…the duration of time between the date of commencement of distribution and the last date of its receipt by the Officer may not be more than four to six weeks…
 
The Chief Secretary, Government of Maharashtra is requested to bring this judgment of the notice of the Hon’ble Chairman and Hon’ble members of the Committee for information and action. …the Chief Secretary of the Government of Maharashtra may report compliance herewith within eight weeks from today (16 April 2015).
 
(Vinita Deshmukh is consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte and is the author of “The Mighty Fall”.)
 

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Cabinet approves REITs under FEMA
The union cabinet on Wednesday approved the Real Estate Investment Trusts (REITs) as an eligible financial instrument/structure under the Foreign Exchange Management Act (FEMA) 1999.
 
The approval is expected to enable foreign investment inflows into the completed rent yielding real estate projects, which is, as of now, prohibited under the FEMA Regulations.
 
The decision was taken at a cabinet meeting chaired by Prime Minister Narendra Modi.
 
As a result of this decision, entities registered and regulated under the SEBI (REITs) Regulations 2014 will be able to access foreign investments which as of now are prohibited under the FEMA Regulations.
 
The intent of introducing the instrumentality of REITs is to reduce pressure on the banking system to which the real estate sector looks for funds, free up existing funds of banks and encourage construction activities. 
 
REITs while attracting long term finance from foreign and domestic sources including NRIs would make available fresh equity to the sector.
 
The finance minister in his budget 2014-15 speech proposed the introduction of REITs. 
 
The REITs have been found to be successful instruments for pooling of investment by several countries for investments in real estate, with a view to earning income and distributing earnings from its investments to investors, who have contributed to the pooled corpus.

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