In a tortuous three-year-old case regarding Sahara India’s failure to return Rs. 20,000 crores to investors, the patience of Justice Radhakrishnan and Justice Khehar finally ran out. The judges on Wednesday announced a non-bailable warrant for Sahara founder Subrata Roy and ordered that he be produced in court on March 4.
Last week, the judges directed Roy to appear before them on Wednesday, and on Tuesday, they rejected his application to be exempted from appearing in court.
On Wednesday, in a courtroom packed with journalists and lawyers, Roy failed to appear before the court yet again. Instead, he sent a letter from his family doctor detailing the poor health of his mother. One of Roy’s lawyers, Ram Jethmalani, pleaded in an almost apologetic tone that the court should “have some mercy on the poor man, who is attending to his ailing mother.”
When the judges indicated that they had had enough of Roy’s excuses, Jethmalani asked the judges to read the doctor’s letter and to not call Roy’s actions a pretense. However, the pleas of Jethmalani and Aryama Sundaram, the other lawyer appearing for Roy, fell on deaf ears. The two judges entered into a hushed discussion and seemed intent on taking strict action against Roy.
At this point, Jethmalani told the bench that although “this court had the power to do anything, you must not be too harsh on a man sitting at the bedside of his dying mother and holding her hands.”
Unmoved, the judges said, “The arms of this court are very long. Yesterday you made a similar request. We declined. Today you are making the same request. When other directors have appeared, why can’t he?” The judges then issued the warrant for Roy.
The case before the bench of Justice Radhakrishnan and Justice Khehar involves Sahara India Real Estate Corporation and Sahara Housing Investment Corporation Limited being accused of duping more than five crore investors of Rs. 20,000 crores.
In February 2012, the Supreme Court asked Sahara to refund the Rs 20,000 crores to the Securities and Exchange Board of India, so that it could return the money to the investors. Instead, three months after the order, Sahara claimed that it had refunded all the money to the investors, adding that 90% of the money had been refunded in cash.
Sahara sent five crore documents, loaded on 127 trucks, to the office of SEBI, as proof of its claims. Although SEBI had employed about 50 people armed with 80 scanning machines to go through the documents, it complained that the receipts had been sent in an incomprehensible format, with the names of the depositors and their refund vouchers stored in separate boxes, making verification extremely difficult. SEBI wrote to 20,000 of these five crore investors and found that less than 1% of the names and addresses sent by Sahara were genuine.
Around the same time, media reports and an investigation by the Enforcement Directorate showed that Sahara had spent Rs. 9,000 crores on buying a stake in an Indian Premier League team, an F1 car racing team, two hotels in New York, as well as the landmark Grosvenor House Hotel in London.
From this point, the Supreme Court became increasingly suspicious of Sahara’s claims in court, and passed strictures restricting the two companies from selling any of their immovable properties. It also banned Subrata Roy from leaving the country.
Since Roy is such a prominent personality, it is unlikely that he will be arrested and kept in jail. It is more likely that he will simply be escorted to the court by the police on March 4. It seems that Roy’s formidable legal team will find it difficult to delay the matter any further, and all eyes will now be on the pater familias of the Sahara Parivar, to see how he tries to assuage the the Supreme Court.
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Last week, the judges directed Roy to appear before them on Wednesday, and on Tuesday, they rejected his application to be exempted from appearing in court.
On Wednesday, in a courtroom packed with journalists and lawyers, Roy failed to appear before the court yet again. Instead, he sent a letter from his family doctor detailing the poor health of his mother. One of Roy’s lawyers, Ram Jethmalani, pleaded in an almost apologetic tone that the court should “have some mercy on the poor man, who is attending to his ailing mother.”
When the judges indicated that they had had enough of Roy’s excuses, Jethmalani asked the judges to read the doctor’s letter and to not call Roy’s actions a pretense. However, the pleas of Jethmalani and Aryama Sundaram, the other lawyer appearing for Roy, fell on deaf ears. The two judges entered into a hushed discussion and seemed intent on taking strict action against Roy.
At this point, Jethmalani told the bench that although “this court had the power to do anything, you must not be too harsh on a man sitting at the bedside of his dying mother and holding her hands.”
Unmoved, the judges said, “The arms of this court are very long. Yesterday you made a similar request. We declined. Today you are making the same request. When other directors have appeared, why can’t he?” The judges then issued the warrant for Roy.
The case before the bench of Justice Radhakrishnan and Justice Khehar involves Sahara India Real Estate Corporation and Sahara Housing Investment Corporation Limited being accused of duping more than five crore investors of Rs. 20,000 crores.
In February 2012, the Supreme Court asked Sahara to refund the Rs 20,000 crores to the Securities and Exchange Board of India, so that it could return the money to the investors. Instead, three months after the order, Sahara claimed that it had refunded all the money to the investors, adding that 90% of the money had been refunded in cash.
Sahara sent five crore documents, loaded on 127 trucks, to the office of SEBI, as proof of its claims. Although SEBI had employed about 50 people armed with 80 scanning machines to go through the documents, it complained that the receipts had been sent in an incomprehensible format, with the names of the depositors and their refund vouchers stored in separate boxes, making verification extremely difficult. SEBI wrote to 20,000 of these five crore investors and found that less than 1% of the names and addresses sent by Sahara were genuine.
Around the same time, media reports and an investigation by the Enforcement Directorate showed that Sahara had spent Rs. 9,000 crores on buying a stake in an Indian Premier League team, an F1 car racing team, two hotels in New York, as well as the landmark Grosvenor House Hotel in London.
From this point, the Supreme Court became increasingly suspicious of Sahara’s claims in court, and passed strictures restricting the two companies from selling any of their immovable properties. It also banned Subrata Roy from leaving the country.
Since Roy is such a prominent personality, it is unlikely that he will be arrested and kept in jail. It is more likely that he will simply be escorted to the court by the police on March 4. It seems that Roy’s formidable legal team will find it difficult to delay the matter any further, and all eyes will now be on the pater familias of the Sahara Parivar, to see how he tries to assuage the the Supreme Court.