BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Appeal No. 221 of 2012
Date of Decision : 29.11.2012
- Sahara India Real Estate Corporation Limited
(formerly also known as Sahara India “C”
Junxion Corporation Limited).
1, Kapoorthala Complex, Aliganj, Lucknow. - Sahara Housing Investment Corporation Limited
(formerly also known as Sahara
India Trustee Company Limited)
Sahara India Point,
CTS 40 & 44, S.V. Road,
Goregaon (West).
…Appellants
Versus
Securities and Exchange Board of India
Plot No.C4-A, G Block,
Bandra (E), Mumbai – 400051.
…Respondent
Mr. Gopal Subramaniam, Senior Advocate with Mr. Ashok Panja, Mr. Satish
Kishanchandani, Mr. Jatin Pore, Mr. Parag Khandhar, Mr. Devansh Mohta,
Mr. Salman, Mr. Keshav Mohan and Mr. Gaurav Kejriwal, Advocates for the
Appellant.
Mr. Prateek Seksaria, Advocate with Mr. Jayesh Ashar and Mr. Mobin Shaikh,
Advocates for the Respondent.
CORAM : P.K. Malhotra, Member & Presiding Officer ( Offg. )
S.S.N. Moorthy, Member
Per : P.K. Malhotra
This appeal has been filed on November 27, 2012 and mentioned today by
counsel for the appellants. With the consent of learned counsel for the parties, the
same is taken up for disposal.
- The appeal is filed by Sahara India Real Estate Corporation Limited and
Sahara Housing Investment Corporation Limited impugning the letter dated 2
November 1, 2012 issued by the Securities and Exchange Board of India (for short
the Board) to the two appellants asking them to furnish details of all the bank
accounts and properties. The impugned letter refers to the judgment of the Hon’ble
Supreme Court dated August 31, 2012 in Civil Appeal no. 9813 and 9833 of 2011
and states that the appellants have failed to furnish the documents to the Board within
the stipulated time and thereby violated the direction of the Hon’ble Supreme Court. - The grievance of the appellants is that the Board has deliberately refused to
accept the documents / information and wrongly proceeded on the basis that the
appellants are in non-compliance of the directions in the said judgment of the Hon’ble
Supreme Court. The appellants have also filed a review petition before the Hon’ble
Supreme Court seeking review of the judgment under Article 137of the Constitution
and the same is pending for hearing. The appellants are apprehending that the Board
may not accept the payments that may be tendered in compliance with the orders of
Hon’ble Supreme Court as the Board has arbitrarily refused to accept the documents /
information with regard to the investors of the Optionally Fully Convertible
Debentures (OFCD) issued by the appellants. It is, therefore, prayed that this
Tribunal may direct the Registrar, Securities Appellate Tribunal, to accept custody of
the amount to be paid by the appellants to the respondent by November 30, 2012,
being the total amount payable by the appellants, towards the outstanding and
unredeemed OFCDs along with the interest thereon as per the directions of the
Hon’ble Supreme Court. It is further prayed that the Board be directed to provide the
time frame within which the respondent will repay the amount to the OFCD holders
and a scheme as to how SEBI proposes to refund the money / implement the said
judgment dated August 31, 2012. - At the outset, Mr. Prateek Seksaria, learned counsel for the respondent Board
took a preliminary objection with regard to the maintainability of the appeal saying
that the letter dated November 1, 2012 issued by the Board to the two appellants is
not an appealable order within the meaning of Section 15T of the Securities and
Exchange Board of India Act, 1992 and hence the appeal is not maintainable. He also 3
submitted that the appeal is premature as no amount has been tendered by the
appellant in compliance with the directions contained in the order dated August 31,
2012 passed by the Hon’ble Supreme Court. - Mr. Gopal Subramaniam, learned senior counsel, appearing for the appellants,
strenuously argued before us that the appellants are forced to approach this Tribunal
in view of the conduct of the respondent Board in not accepting the documents
tendered by them and it is apprehended that the pay order amounting to ` 5120 crores
for repaying the amount to the OFCD subscribers will also not be accepted by the
Board. The last date for depositing this amount is November 30, 2012 and if the
amount is not accepted, it may amount to violation of the order passed by the Hon’ble
Supreme Court. He, therefore, prayed that a direction may be given to the Board to
accept this amount or the amount be accepted by the Registrar of this Tribunal, as
prayed for in the appeal. - We have heard learned counsel for the parties for some time. The Hon’ble
Supreme Court by its judgment dated August 31, 2012 while dismissing the appeals
filed by the appellants against the order passed by this Tribunal, issued certain
directions in modification of the directions issued by the Board and endorsed by this
Tribunal, as under:
“O R D E R
We, therefore, find, on facts as well as on law, no illegality in
the proceedings initiated by SEBI as well as in the order passed by
SEBI (WTM) dated 23.6.2011 and SAT dated 18.10.2011 and they
are accordingly upheld. The order passed by this Court in C.A.
No.9813 of 2011 filed by SIREC and in C.A. No.9833 of 2011 filed
by SHICL, praying for extending the time for refund of the amount
of Rs.17,400 crores, as ordered by SAT, stands vacated and
consequently the entire amount, including the amount mentioned
above will have to be refunded by Saharas with 15% interest. We
have gone through each other’s judgment and fully concur with the
reasoning and the views expressed therein and issue the following
directions in modification of the directions issued by SEBI (WTM)
which was endorsed by SAT:
- Saharas (SIRECL & SHICL) would refund the amounts
collected through RHPs dated 13.3.2008 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 4
three months from today, which shall be deposited in a Nationalized
Bank bearing maximum rate of interest. - 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 13.3.2008 and
16.10.2009 within a period of 10 (ten) days from the pronouncement
of this order and it is for the SEBI (WTM) to examine the correctness
of the details furnished. - We make it clear that if the documents produced by Saharas are
Not found genuine or acceptable, then the SEBI (WTM) would
proceed as if the Saharas 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. - 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. - 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
Saharas and be paid to SEBI. - SEBI (WTM) shall take steps with the aid and assistance of
Investigating Authorities/Experts in Finance and Accounts and other
supporting staff to examine the documents produced by 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 Saharas. - SEBI (WTM), in the event of finding that the genuineness of the
subscribers is doubtful, an opportunity shall be afforded to 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
concerned subscribers to establish their claims. The decision of SEBI
(WTM) in this behalf will be final and binding on Saharas as well as
the subscribers. - SEBI (WTM) if, after the verification of the details furnished, is
unable to find out the whereabouts of all or any of the
subscribers, then the amount collected from such subscribers will be
appropriated to the Government of India. - 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 the 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 Justice B.N.
Agrawal, which shall be borne by SEBI and recoverable from Saharas. 5
Mr. Justice B.N. Agrawal is requested to take up this assignment
without affecting his other engagements. We also order that all
administrative expenses including the payment to the additional staff
and experts, etc. would be borne by Saharas. - We also make it clear that if 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 realizations of the
amounts. - We also direct SEBI(WTM) to submit a 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.” - During the course of hearing, we were told that since the required documents,
as per directions contained in the order of the Hon’ble Supreme Court, were not
furnished by the appellants to the Board within the stipulated period, the Board has
already filed a contempt petition before the Supreme Court. With regard to certain
other directions the Board filed interlocutory applications (65 and 66 of 2012) which
were disposed of on October 19, 2012 observing that there is no reason to pass any
orders in the interlocutory applications since the directions given by the Court in its
judgment dated August 31, 2012 are self explanatory. We are told a contempt petition
filed by the respondent Board and a review petition filed by the appellants against the
order dated August 31, 2012 are already pending before Hon’ble Supreme Court. The
interlocutory application has already been disposed of observing that the directions
given by the Apex Court are self explanatory. Under these circumstances, 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. Admittedly, the appellants have not yet tendered the money
to the respondent Board as per directions contained in para 1 of the order, as
reproduced above. 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. The Hon’ble Supreme Court is seized of the matter. The Board has been
directed to submit status report, duly approved by Mr. Justice B.N. Agrawal who has
been requested to oversee the implementation of the directions. We see no reason
how this Tribunal gets jurisdiction to entertain the appeal or give any further
directions in the matter. We are, therefore, of the view that any further direction or 6
modification in the directions issued by the Supreme Court can be sought for and
granted by that Court alone.
We, therefore, find the appeal premature as well as non-maintainable.
Dismissed. No costs.Sd/- P.K. Malhotra Member &Presiding Officer ( Offg. )Sd/- S.S.N. Moorthy Member
29.11.2012
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