Sahara India Lucknow... v. Securities And Excha...

Order (Oral)

Supplementary affidavit on behalf of petitioner filed in Court for correction of typographical error is taken on record.

Heard learned counsel for parties and perused the pleadings of Writ Petition.

Learned Senior Counsel, Shri Prashant Chandra, appearing for petitioners referred to the directions as contained in the judgment and order dated 31.8.2012 passed in Civil Appeal No. 9813 of 2011 by Hon'ble the Apex Court. On reproduction they would read as:

(i) The Saharas (SIRECL and SHICL) would refund the amounts collected through RHPs dated 13.03.2008 and 16.10.2009 along with interest @ 15% per annum to SEBI from the date of receipt of the subscription amount till the date of repayment, within a period of three months from today, which shall be deposited in a nationalized bank bearing maximum rate of interest.

(ii) The Saharas are also directed to furnish the details with supporting documents, to establish whether they had refunded any amount to the persons who had subscribed through RHPs dated 13.03.2008 and 16.10.2009 within a period of 10 (ten) days from the pronouncement of this order and it is for SEBI (WTM) to examine the correctness of the details furnished.

(iii) We make it clear that if the documents produced by the Saharas are not found genuine or acceptable, then SEBI (WTM) would proceed as if the Ssaharas had not refunded any amount to the real and genuine subscribers who had invested money through RHPs dated 13.3.2008 and 16.10.2009

(iv) The Saharas are directed to furnish all documents in their custody, particularly, the application forms submitted by subscribers, the approval and allotment of bonds and all other documents to SEBI so as to enable it to ascertain the genuineness of the subscribers as well as the amounts deposited, within a period of 10 (ten) days from the date of pronouncement of this order.

(v) SEBI (WTM) shall have the liberty to engage investigating officers, experts, in finance and accounts and other supporting staff to carry out directions and the expenses for the same will be borne by the Saharas and be paid to SEBI.

(vi) SEBI (WTM) shall take steps within the aid and assistance of investigating authorities/experts in finance and accounts and other supporting staff to examine the documents produced by the Saharas so as to ascertain their genuineness and after having ascertained the same, they shall identify subscribers who had invested the money on the basis of RHPs dated 13.3.2008 and 16.10.2009 and refund the amount to them with interest on their production of relevant documents evidencing payments and after counter-checking the records produced by the Saharas.

(vii) SEBI (WTM) in the event of finding that the genuineness of the subscribers is doubtful, an opportunity shall be afforded to the Saharas to satisfactorily establish the same as being legitimate and valid. It shall be open to the Saharas, in such an eventuality to associate the subscribers concerned to establish their claims. The decision of SEBI (WTM) in this behalf will be final and binding on the Saharas as well the subscribers.

(viii) SEBI(WTM) if, after the verification of the details furnished, is unable to find out the whereabouts of all any of the subscribers, then the amount collected from such subscribers will be appropriated to the Government of India.

(ix) We also appoint Mr. Justice B.N Agrawal, a retired Judge of this Court to oversee whether directions issued by this Court are properly and effectively complied with by SEBI (WTM) from the date of this order. Mr. Justice B.N Agrawal would also oversee the entire steps adopted by SEBI (WTM) and other officials for the effective and proper implementation of the directions issued by this Court. We fix an amount of Rs. 5 lakhs towards the monthly remuneration payable to Mr. Justice B.N Agrawal, this will be in addition to travelling, accommodation and other expenses, commensurate with the status of the office held by Mr. Justice B.N Agrawal, which shall be borne by SEBI and recoverable from the Saharas. Mr. Justice B.N Agrawal is requested to take up this assignment without effecting his other engagements. We also order that all administrative expenses including the payment to the additional staff and experts, etc. would be borne by the Saharas.

(x) We also make it clear that if the Saharas fail to comply with these directions and do not effect refund of money as directed, SEBI can take recourse to all legal remedies, including attachment and sale of properties, freezing of bank accounts, etc. for realization of the amounts.

(xi) We also direct SEBI (WTM) to submit to status report, duly approved by Mr. Justice B.N Agrawal, as expeditiously as possible, and also permit SEBI (WTM) to seek further directions from this Court, as and when, found necessary.”

Learned Senior Counsel submitted that the petitioners' company is a separate entity other than those mentioned in the directions. He also submitted that the information as required of, from opposite parties 2 & 3 have already been furnished to opposite party no. 1. While referring to paragraph-25 of the writ petition, he contends that the petitioners' share is negligible and they do not have any control over the companies which find mention in the directions of Hon'ble the Supreme Court. It is also a submission of learned Senior Counsel that the impugned order has been passed by the SEBI without issuing a show cause and granting opportunity of hearing to the petitioners.

At this stage, Shri Altaf Mansoor, learned counsel, appears for opposite party no. 1, SEBI, and accepts notice. Shri Anurag Srivastava, learned counsel, who has been served copy of writ petition in advance also put in appearance for opposite party no. 5.

On request of learned counsel for respondents, we grant time till 14.3.2013, to file short counter affidavits.

List the matter on 14.03.2013