Supreme Court sets aside Delhi High Court's stay on SFIO probe into Sahara companies

A vacation bench of Supreme Court on Thursday set aside the stay granted by the Delhi High Court on the operation, execution and implementation of the two orders passed by the Central government for investigation into nine companies related to Sahara Group [Serious Fraud Investigation Office & Ors. v. Sahara Housing Investment Corporation Limited and Ors.]. .The Delhi High Court had in December 2021 passed the interim order staying investigation against nine companies of Sahara group.This was challenged by the Serious Fraud Investigation Office (SFIO). .Allowing the appeals, vacation bench of Justices DY Chandrachud and Bela Trivedi observed that staying the investigation at interim stage was not correct and set aside the order. "It will be inappropriate at this stage to place the burden of reason till the complete probe is over. High Court was not correct in staying the investigation at interim stage. We allow (present) appeals and set aside the High Court order on stay" the order stated. The Bench also clarified that this decision of theirs will have no impact on merits of the writ petition pending before the High Court. "High Court shall decide the writ petition without any regard to observations made herein. We request the High Court to expeditiously dispose off the case, preferably within 2 months after re-opening after summer vacations," the top court ordered. .At this point, Senior Advocate Kapil Sibal, appearing for Sahara, pointed out that the present order may impact other petitions filed by the Sahara companies. However, the Division Bench clarified that the present order is limited to the facts of present case and will not impact any other case. .The High Court had passed the order stating that the investigation would violate provisions of the Companies Act.Arguing for SFIO, Solicitor General (SG) Tushar Mehta apprised that the High Court had noted in its order that investigation could not be completed in 3 months and instead took 3 years because the total money involved was ₹1 lakh crores and there were layers of companies involved. Subsequently, Lookout Circulars were issued against the company's top officials so that they do not flee the country, he pointed out. "There is no such mandate under the act that if probe is not completed within 3 months , the probe itself will come to an end," the SG emphasized before the Bench..Terming it an "extraordinary order", the apex court came to the conclusion that the High Court was not justified in passing an interim direction staying the probe and interdicting subsequent actions including issuance of Lookout Circulars. "High Court has completely scuttled an investigation which is extraordinary. ...It is an extraordinary order. It needs to be stayed," the apex court remarked before proceeding to set aside the order.