Sahara Debacle Supreme Court issues notice to Sahara for contempt SEBI receives flak for inaction

The Supreme Court has today issued notice to two Sahara Group Companies (Sahara) in a contempt petition filed by the Securities and Exchange Board of India (SEBI) for non-compliance with the judgment of the Court dated August 31, 2012. The matter was heard by a Division Bench of Justices K. S. Radhakrishnan and Jagdish Singh Khehar..The Supreme Court has today issued notice to two Sahara Group Companies (Sahara) in a contempt petition filed by the Securities and Exchange Board of India (SEBI) [Contempt.pet. (c) nos. 412/2012 and 413/2012] for non-compliance with the judgment of the Court dated August 31, 2012. The matter was heard by a Division Bench of Justices K. S. Radhakrishnan and Jagdish Singh Khehar..The Supreme Court had, in the August 31 judgment, directed the two Sahara Group companies, Sahara India Real Estate Corporation Limited (SIRECL) and Sahara Housing Investment Corporation (SHICL) to refund a sum of Rs. 17,400 crore raised from millions of investors, thereby reconfirming the order of the Securities Appellate Tribunal (SAT). The Court had also, vide an interim order dated December 5, 2012, extended the deadline for Sahara to repay the money. In the said order, the Court had ordered Sahara to initially deposit Rs. 5,120 crore and pay the remainder in two instalments in January and February..Advocate Pratap Venugopal, who today appeared for SEBI, submitted that Sahara had failed to comply with the said judgment of the Court. However, the Court questioned the inaction on the part of SEBI noting that it had failed to take the steps to ensure compliance with the judgment by Sahara. The Court remarked that SEBI is free to freeze the accounts of Sahara and also move against its property. Venogopal, however, argued that SEBI has, in fact, taken actions under the SEBI Act and other empowering provisions and has approached the Supreme Court by way of contempt petition as an independent measure..Senior Advocate Ram Jethmalani appearing for Sahara contended that Sahara has deposited Rs. 5,120 crore which is over and above the Rs. 2,620 crore outstanding against it..The Court, however, issued notice to Sahara and has sought its reply within four weeks as to why contempt proceedings should not be initiated against the companies for not complying with its judgment. The Court has also directed SEBI to file a status report within two weeks elucidating the actions taken by it pursuant to the judgment of the Court.