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Posted on Feb 06, 10:15PM | IANS
New Delhi, Feb 6 : The Supreme Court Wednesday issued notice to Sahara India Real Estate Corporation Ltd. (SIRECL) and Sahara Housing Investment Corporation Ltd. (SHICL) on a petition by market regulator SEBI for not complying with the court's order.
The bench of Justice K.S. Radhakrishnan and Justice Jagdish Singh Khehar issued the notice after Securities and Exchange Board of India (SEBI) told the court that two Sahara Group real estate companies, that were asked to return Rs.17,400 crore of investors' money with 15 percent interest, had not complied with the court's Aug 31, 2012, order to furnish all documents in their custody, including investors' application forms.
Appearing for SEBI, counsel Pratap Venugopal said SIRECL and SHICL had defaulted on compliance of three directions by the apex court.
He said in respect to two directions, a Dec 5 court order gave the companies extension till the first week of February 2013.
But there was no restriction by the Dec 5 order on the direction asking the companies to furnish all documents in their custody, particularly application forms by subscribers, approval and allotment of bonds and all other documents to SEBI to enable it to ascertain genuineness of subscribers and the amounts deposited, he said.
After being told about non-compliance of the Aug 31 order, the court asked what steps SEBI had taken for legal remedies.
"What action you have taken? Are you waiting for the outcome of the contempt petition?" Justice Radhakrishnan asked Venugopal.
Taking to task the market regulator, the justice said: "Who is in contempt? You or Sahara? You have not taken action as provided in the August 31 order."
As Venugopal tried to tell the court that SEBI took all the steps it could under the SEBI Act, Justice Khehar said: "No, no. That is not correct. Under the direction, you have not frozen the accounts (of Sahara companies)."
Venugopal said SEBI had moved a civil court in Mumbai for freezing of the accounts.
Appearing for the Sahara companies, senior counsel Ram Jethmalani told the court that they had to pay Rs.2,620 crore and deposited Rs.5,120 crore, leaving the buffer of Rs.2,500 crore to pay in case there was any demand by any of the left-out investors.
"Nothing is due on us," he told the court.
After he told the court that the companies needed time as they had to collect documents spread all over the country, including rural areas, the court said details of these were already on CDs and they were told this in the course of the hearing.
The court said the companies were asked to hand over everything to SEBI, which in turn would return the investors' money. The companies were not to return the money on their own.
Apparently not impressed by the companies' plea, the court issued them notice and asked to respond to SEBI's contempt petition.