Delhi High Court Grants Relief to Sahara Group subsidiaries

Delhi High Court Grants Relief to Sahara Group subsidiaries

Apex court seeks reply of respondents and allows continuation of business operations till next date of hearing

The Delhi High Court by a divisional bench comprising of Chief Justice D.N. Patel and Justice Jyoti Singh ruled a stay order on the order passed by the Department of Agriculture, Cooperation and Farmers Welfare prohibiting operations of a Sahara Group subsidiary- Saharayn Universal Multipurpose Society Limited and Sahara Credit Co-Operative Society, threatening winding up.

The petition was filed by the Saharayn Universal Multipurpose Society Limited (SUMS ltd) registered under the Multi State Cooperative Societies Act (MSCSA), alleging that there have been complaints from only 0.06 per cent members out of thousands of members on whose complaints the Authority had acted upon.

The office of Central Registrar of Cooperative Societies, Department of Agriculture, Cooperation and Farmers Welfare passed an order dated 19 November 2020, which further directed the Society to sort out complaints received till date, a complete assessment of amounts due to the depositors, a complete assessment of assets and liabilities of the society, assessment of current realization amount, an examination of income from interest/dividend, credible working plan for the society, submit its interim report.

Petitioners (SUMS ltd) also contended that as per the MSCS Act, a company registered may invest into anything as provided in its bye-laws. According to the petitioners the department was threatening to wind-up the company and that it was not be allowed to operate or function its business.

The bench, however, granted some relief to the petitioners and noted that the payment of Rs 17,487 crore has already been paid and have started an online complaint and grievance portal.

The bench allowed the Saharayn to continue their business in accordance with the law and their bye-laws till the next date of hearing while granting time extension to respondents - Department of Agriculture, Cooperation and Farmers Welfare to file its reply and has listed the matter for further hearing on 19 February. The bench has correspondingly directed the same order for the Sahara Credit Co-Operative Society with the respective appropriate changes.

ATHENA LEGAL represented Sahara Group subsidiaries