Supreme Court Permits Disbursement of Rs. 5000 Crore from SEBI-Sahara Fund to Depositors

Supreme Court Permits Disbursement of Rs. 5000 Crore from SEBI-Sahara Fund to Depositors

The Supreme Court while adjudicating an application preferred by the Union of India, Ministry of Corporation has permitted the disbursement of Rs. 5000 crore out of Rs. 24,979 crore deposited by the Sahara group with the Securities and Exchange Board of India (SEBI) to repay the dues of the depositors of the depositors of the Sahara Group of Cooperative Societies.

The Court directed that out of the total amount of Rs. 24,979.67 crore lying in the “Sahara-SEBI Refund Account”, Rs. 5000 crore be transferred to the Central Registrar of Cooperative Societies, who, in turn, shall disburse the same against the legitimate dues of the depositors of the Sahara Group of Cooperative Societies, which shall be paid to the genuine depositors in the most transparent manner and on proper identification and on submitting proof of their deposits and proof of their claims and to be deposited in their respective bank accounts directly.

The directions were passed on an application filed by the Centre in a Public Interest Litigation by a person named Pinak Pani Mohanty, who sought a direction to pay the amount to the depositors who invested in several chit fund companies and Sahara credit firms.

Shri Tushar Mehta, learned Solicitor General submitted that a total amount of Rs. 24,979.67 crore was lying unutilized with the SEBI in “Sahara-SEBI Refund Account”, which was deposited pursuant to the earlier direction issued by this Court.

He submitted that out of the aforesaid amount of Rs. 15,569.27 Crores deposited by Sahara India Real Estate Corporation Limited and Sahara Housing Investment Corporation Limited, Rs. 2253 Crores had been taken out from Sahara Credit Cooperative Society Ltd. and deposited with SEBI on account of the dispute of Sahara Real Estate Limited.

Thus, it was contended that the corpus which was lying in “Sahara-SEBI Refund Account” already includes the amount which belongs to the depositors of the aforesaid Sahara Group Cooperative Society Ltd.

He further pointed out that the amount deposited in “Sahara SEBI Refund Account” was lying unutilized and in fact due to large number of continuing complaints against the Sahara Group of Cooperative Societies and the amount lying unutilized is also consisting of the amount of the depositors of Sahara Group of Cooperative Societies, if Rs. 5,000 crore was transferred to the Central Registrar of Cooperative Societies and thereafter the same was disbursed against the legitimate dues of the depositors of the Sahara Group of Cooperative Societies, it will be just, proper and equitable.

The coram comprising of Justices MR Shah and CT Ravikumar opined that the Centre’s application “seems to be reasonable and in the larger public interest,” when it was reported that the amount lying in the “Sahara-SEBI Refund Account” is unutilized and the genuine depositors of the Sahara Group of Cooperative Societies were otherwise entitled to get back their money.

The bench further directed that the disbursement shall be supervised and monitored by Justice R. Subhash Reddy, Former Judge with the able assistance of Shri Gaurav Agarwal, learned Advocate, who is appointed as Amicus Curiae to assist Justice R. Subhash Reddy as well as the Central Registrar of Cooperative Societies in disbursing the amount to the genuine depositors of the Sahara Group of Cooperative Societies.

The manner and modalities for making the payment is to be worked out by the Central Registrar of Cooperative Societies in consultation with Justice R. Subhash Reddy, Former Judge and Shri Gaurav Agarwal, learned Advocate.

Lastly, the bench directed that the amount must be paid to the respective genuine depositors of the Sahara Group of Cooperative Societies out of the aforesaid amount of Rs. 5,000 crore at the earliest, but not later than nine months from today. The balance amount thereafter shall be again transferred to the “Sahara-SEBI Refund Account.”