The Securities Appellate Tribunal (SAT) on Thursday refused to accept custody of Sahara Group’s Rs 17,400 crore plus interest with the SAT registry, instead of SEBI.

Dismissing the appeal, the tribunal said, “We fail to understand how this tribunal gets the jurisdiction to entertain this appeal when the parties are supposed to take action in accordance with the directions given by the Hon’ble Supreme Court.”

On August 31, the Supreme Court directed two Sahara group companies — Sahara India Real Estate Corporation (SIRECL) and Sahara Housing Investment Corporation (SHICL) — to refund Rs 17400 crore with 15 per cent interest from the date of receipt of the subscription amount till the date of repayment, within a period of three months (November 30) from that day.

SEBI was directed to submit a status report approved by Justice B.N. Agrawal, who was appointed by the apex court to oversee the refund process.

Time frame

On November 27, Sahara prayed to SAT to direct SEBI to provide the time frame within which it should repay the amount to the OFCD (optionally fully convertible debenture) holders.

Sahara also requested SAT to direct SEBI as to how SEBI proposed to refund the money and implement the Supreme Court judgment (dated August 31, 2012).

SEBI counsel submitted that the appeal was premature as no amount had been tendered by Sahara Group in compliance with the Supreme Court directions.

Sahara’s counsel argued that it was forced to approach SAT in view of SEBI’s conduct in not accepting the documents tendered by them and there was apprehension that the pay-order of Rs 5,120 crore for repaying the amount to OFCD subscribers would also not be accepted by SEBI.

SAT observed that Sahara had not furnished the required documents to SEBI as directed by the Supreme Court and SEBI had already filed a contempt petition before the court.

In addition, Sahara had also filed a review petition before the Court seeking review of the August 31 judgment. This petition is pending for hearing.


SAT found the appeal premature and non-maintainable and said that Sahara had not yet tendered the money to SEBI according to Supreme Court directions.

“The cause of action, if any, will arise if the money is tendered by the appellants as per directions of the Supreme Court and the same is not accepted by the Board,” said SAT.

“We see no reason how this Tribunal gets jurisdiction to entertain the appeal or give any further directions in the matter,” said SAT.

SAT added that any further direction or modification in the directions issued by the Supreme Court can be sought for and granted by that Court alone.

Sources said Sahara would appeal against SAT’s decision in the Supreme Court on Friday. The deadline for refund also ends on Friday.

(This article was published on November 29, 2012)
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