The Securities Appellate Tribunal (SAT) asks Sahara group company Sahara India Commercial Corporation Ltd and its then directors, including Subrata Roy, to deposit within four weeks Rs2,000 crore with market regulator Securities and Exchange Board of India (SEBI). The market regulator will keep this amount in an escrow account which will be subjected to the results of the appeal, the Tribunal says.
In two separate orders, the SAT bench of presiding officer justice Tarun Agarwala and judicial member justice MT Joshi says, "We direct Sahara India Commercial Corporation Ltd and Sahara India to provide a full inventory of all the assets and properties and details of all the bank accounts in India and abroad, demat accounts and holding of mutual funds, shares, securities (in physical or in demat form) to SEBI within four weeks from today. The said details would be provided on an affidavit to be sworn by Subrata Roy."
The SAT also pointed out that despite a recovery proceeding initiated by the regulator through a demand notice issued on 9 April 2021 and when the appeals were being heard before the bench, Sahara group had not made any attempt for interim relief.
The order says, "No attempt was made by the appellants to press the interim application at that stage, nor the appellants brought this fact to the knowledge of the Tribunal. It is only when the attachment order was issued that the miscellaneous application in appeal no251 of 2019 and additional affidavit in appeal no250 of 2019 was filed on 26 October 2021. Thus, we are of the opinion that even though it would have been appropriate for the respondent to await the result of the decision of this Tribunal, however, there is no embargo upon the recovery officer to proceed independently to recover the amount under Section 28A of the SEBI Act since there was no stay of the impugned order."
"...it is unfortunate that the respondents have initiated recovery of the amount pursuant to the impugned order during the period when this Tribunal was hearing the matter finally. However, we are of the opinion that merely by filing an appeal does not give a right to the appellant for an automatic stay of the impugned order. We find that no separate application was filed along with the memorandum of appeal for stay of the impugned order," SAT says.
Senior counsel Gaurav Joshi and advocate Somashekar Sundaresan, representing Sahara, contended before the bench that "the company (Sahara India Commercial Corp and Sahara India) has a monthly expenditure of Rs10.36 crore and Rs35.85 crore, respectively. Salaries to employees, taxes to the government and other business expenditures are required to be made on a daily basis which has come to a halt on account of the attachment order."
Through a rejoinder affidavit, the counsel stated that the company could not survive unless it has funds to run and manage its affairs. They also contended that it is essential for the Tribunal to lift the attachment order; otherwise, there would be colossal damage.
The bench, however, says, "Though the statistics given cannot be accepted as the gospel truth as it is not certified by a qualified chartered accountant (CA) but we can take judicial notice of the fact that if the total expenses of the appellant companies is around Rs46 crore per month, then the annual turnover would be in 100 and 1000 of crore on a rough estimate. Therefore, we are of the opinion that the appellants have the capacity to deposit some amount pursuant to the impugned order."
While asking Sahara to deposit Rs2,000 crore, the SAT says, "Upon deposit of the aforesaid amount the attachment order against the company and its directors would be lifted forthwith."
The counsel for Sahara also requested the bench to lift attachment on bank accounts of Lieutenant General AS Rao, a senior citizen aged 81, whose wife is suffering from various ailments and Ranoj Das Gupta, who is suffering from kidney failure and is undergoing treatment.
Considering the old age and medical exigencies of Lt Gen Rao and Mr Gupta, the bench directed SEBI to withdraw attachment orders against them.
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