Holding

The Court declined to modify the bail conditions or allow a guest‑house transfer, but relaxed the asset‑restraint orders to permit sale of specified properties under strict safeguards, and referred the matter to a three‑Judge Bench while appointing an amicus curiae.

Summary

The Securities and Exchange Board of India (SEBI) found that Sahara India Real Estate Corporation Ltd. and its affiliates had illegally raised public deposits through Optional Fully Convertible Debentures (OFCDs) and ordered them to refund the amount with interest. The companies failed to comply with the Court's and SEBI's directions, leading to contempt proceedings, the incarceration of the promoters, and a conditional bail order requiring a deposit of Rs 10,000 crores (half in cash, half as a bank guarantee). The promoters sought modification of the bail conditions and a shift from jail to a guest house, arguing that the restraint on sale of assets prevented compliance. The Supreme Court rejected the bail‑modification and guest‑house requests, but modified the restraint orders to permit the sale of specified movable and immovable assets under strict conditions, including sale at not less than circle rates and bank guarantees from scheduled banks. The Court also directed that the matter be referred to a three‑Judge Bench and appointed senior advocate F.S. Nariman as amicus curiae.

Issues considered

The conditions of the interim bail order may be modified?
Whether the contemnors can be shifted from jail to a guest house for compliance purposes?
Whether the restraint orders on sale and transfer of movable and immovable assets should be relaxed to enable compliance with the refund directions?
What safeguards are required for the sale of assets, including valuation and buyer eligibility?
Whether bank guarantees for the required amount must be from scheduled or nationalised banks?

Legislation cited

Securities and Exchange Board of India Act, 1992

Subjects

Investor fraudOptional Fully Convertible DebenturesSEBIContempt of courtBail conditionsAsset restraintSale of immovable propertyBank guaranteeAmicus curiaeThree‑Judge Bench

Judgment

[2014] 13 S.C.R. 1011

S.E.B.I. A
V.
SAHARA INDIA REAL ESTATE CORPORATION LTD. & ORS.
(I.A. Nos. 101-103)
in
B
Contempt Petitions (C) No. 412-413 of2012
in
Civil Appeals No. 9813 and 9833 of 2011
and
Contempt Petition (C) No. 260 of 2013 c
in
CivilAppeal No. 8643 of2012
JUNE 04, 2014
[T. S. THAKUR AND A. K. SIKRI, JJ.]
D
Scams - Investor-fraud case - Invitation/collection of
deposits from general public in the form of 'Optional Fully
Convertible Debentures'-OFCD by a Company- Complaint
by investors' group - Direction by SEBI to the Company not
to offer equity shares/OF CDS or any other securities to public
or invite subscriptions - In appeal, the High Court issuing E
further directions to the promoter and the directors of the
Company to jointly and severely refund the amount collected
alongwith interest @ 15% p.a. - Pursuant thereto orders
passed by SEBI, tribunal and this Court as regards refund of
amount as also extension of time period for making refund - F
However, non compliance with the directions - Contempt
petitions against the contemnors - Various orders passed -
Interim applications by contemnors praying that restraint on
sale and transfer of properties of the Company be lifted- In
the course of proceedings, contemnors committed to judicial G
custody - Subsequently, on the prayer of the contemnors ·
seeking bail, conditional order granting interim bail to
contemnors passed by this Court, condition being to deposit
Rs. 10, 0001- crores - Non-compliance of the condition -
Aggrieved, promoter filing writ petition, challenging the order H
1011
1012 SUPREME COURT REPORTS [2014] 13 S.C.R.

A whereby contemnor was committed to judicial custody; and
also seeking release from custody- Dismissal of writ petition
by this Court- Held: In view of the dilatory tactics adopted by
the contemnors to delay the proceedings before SEBI, High
Court and this Court, and non-compliance of the orders
B passed despite sufficient opportunities the terms stipulated
in the order granting interim bail to the contemnors cannot
be modified- Contemnors cannot be shifted to a guest house
for continued custody and detention - However, orders
passed by this Court and by SEBI restraining sale and
c transfer of moveable and immoveable properties held by the
Company modified- In view of the importance of the issues
and the fact that a three judge bench matter is sought to be
enforced in these proceedings, said proceedings referred to
three-Judge Bench - Reference to larger Bench.
D 'SIRECL' company and SHICL 'company' invited/
collected deposits from general public in the form of
'Optional Fully Convertible Debentures' OFCD. On a
complaint by professional investors' group, SEBI found
that the mobilisation of funds under the Red Herring
E Prospectus issued by the two companies was not legally
permissible and issued directions to the company not
to offer their equity shares/OFCDS or any other
securities to the public or invite subscription. The High
Court upheld the said directions and further directed the
F promoter and the Directors of the Company to jointly and
severely refund the amount collected by them alongwith
interest@ 15% p.a. from the date of the receipt of the
deposits till the date of such repayment. SEBI directed
that the company would not access the security market
G for raising funds till the time the payments are not made.
In appeal, the tribunal upheld the order passed by the
SEBI and directed the company to refund the amount
collected from the investors. Thereafter, this Court
extended the period for making the refund and directed
the company to deposit the amount with the SEBI. The
H company did not comply with directions. Pursuant to the
S.E.B.I. v. SAHARAINDIAREALESTATE CORPN. LTD. 1013

_order by this Court, the company deposited Rs.5120/- A
crores with the SEBI but failed to pay the remaining
amount. SEBI then filed contempt petitions against the
contemnors for non-compliance of the directions of this
Court. Various orders were passed from time to time.
Instant applications were filed in these contempt 8
petitions seeking lifting of restraint on sale and transfer
of properties of the Company. In the course of
proceedings in contempt petitions, since the directions
of this Court were not complied with, non-bailable
warrants were issued against the promoter for his C
production before this Court and subsequently, the three
contemnors including the promoter were taken into
judicial custody. Thereafter, since the contemnors
insisted for grant of bail, this Court passed a conditional
order granting interim bail to the contemnors; the
condition being that they deposit Rs.10,000/- crores. D
Upon compliance, the contemnors were to be released
from the custody. However, instead of complying with
the above directions, the promoter filed writ petition
challenging the validity of the order and sought his
release from the custody. The writ petition was E
dismissed.
Disposing of the IAs with directions, the Court
HELD: 1.1 The prayers of the contemnors that they
want relaxation in the restraint orders over the bank
deposits and immovable properties to comply with the F
directions of this Court regarding deposit of the amounts,
does not pose any difficulty. As regards the prayer for
grant of bail or relaxation of jail conditions, there is no
inclination to modify the order granting interim bail to
the contemnors upon conditions stipulated in the said G
order, in view of the background in which the
contemnors came to be committed to the jail and the
finding recorded by the Court that they have at all earlier
stages tried to adopt dilatory tactics and avoided to
comply with the orders passed by the Court. It was H
1014 SUPREME COURT REPORTS [2014] 13 S.C.R.

A pleaded, in the alternative, that the least which could be
done was to shift the contemnors from Tihar Jail to a
guest house for incarceration to enable them to take
decisions that are necessary for co.mpliance with the
directions issued by this Court. This request was
8 oppo1~ed by the counsel for SEBI, according to whom
similar requests made repeatedly over several hearings
in the past have been declined by this Court, although
no specific order refusing the same was recorded.
[Para 17][1029-A-G]
c 1.2 Apart from the fact that the prayer now made is
a repetition of similar prayers made in the past which
have not cut any ice with the bench hearing the matter,
there is no reason to make a departure from the usual
course in the instant case. The Bench passed a
D conditional bail order after due and proper consideration
having regard to the attendant circumstances including
conduct of the contemnors. The order can be modified
only under very compelling circumstances. The only
reason given by the applicants is that interim release or
E transfer of the contemriors to a guest house would
enable them to dispose of the properties speedily and
enable them to arrange for the requisite Bank
Guarantees, cannot be accepted. It is noteworthy that
the total amount to be deposited is between Rs. 33000/-
F to Rs. 35000/- crores. To show their bonafides, the
contemnors have been directed to deposit less than 1/
3rd of' that amount as a condition for bail. After all, even
when this part of the order is complied with and the
contemnors are set free, they will have to arrange the
G deposit of the balance amount, which again is very
substantial. That apart, it is not the case of the
contemnors that they or anyone of them suffers from
any medical condition that calls for hospitalisation or an
atmosphere conducive for recovery from any disease.
This Court has already issued directions permitting
H visitation to those who need to visit the contemnors in
S.E.B.I. v. SAHARAINDIAREAL ESTATE CORPN. LTD. 1015

jail. That arrangement has not been found to be A
inadequate at present so as to call for any change. Thus,
the prayer for modification of the order is rejected.
[Para 18, 19][1029-G-H; 1030-A-F]
1.3 There is considerable merit in the submission
that the restraint order issued by the SEBI and by this B
Court forbidding transfer and alienation of moveable and
immoveable assets by the Group of companies has the
effect of preventing the contemnors from complying with
the directions of this Court which require them to deposit
Rs.5,000/- crores in cash besides a bank guarantee for a C
similar amount of Rs.5,000/- crores. While it is true that
the contemn ors stand committed to prison for their non-
compliance with the directions of this Court, nothing
should prevent them from taking steps to comply with
the said directions or the conditions subject to which D
they have been granted interim bail. Restraint against
transfer of the assets by the contemnors and the
companies promoted by them precisely has the effect
of doing so. The respondent company need to eventually
deposit a substantial amount which according to the E
current estimate may be in the neighbourhood of Rs.
30,000 to Rs. 35,000 crores inclusive of interest accrued
on the principal amount. Sale of valuable properties at a
price lesser than the market value of such assets is
bound to pn>judicially affect the interest of the depositors F
and defeat the orders passed by this Court in its letter
and spirit. That is particularly so because according to
the counsel, SEBI is unable to value the properties or
process the sale and transfer thereof. It was in that
background that this Court indicated to the counsel for G
the appellants that the restraint orders cannot be lifted
in toto and that the respondent company should come
forward with a proposal for sale of such properties as
were sufficient to comply with the interim bail direction
of this Court regarding deposit of Rs.5,000/- crores in H
1016 SUPREME COURT REPORTS [2014] 13 S.C.R.

A cash and a bank guarantee of Rs.5.000/- in addition.
Appellant's counsel pursuant to that observation
confined his prayer for permission to sell/transfer only
nine items of properties situated in nine different cities
in the country arid disclosed the estimated value of such
B property in the statement. The counsel on instructions
made a statement that although the note filed
by him mentions the names of nine different cities
without giving details of the properties situated in those
cities but the fact remains that the properties referred to
c in the note are only nine in number and no more.
[Para 20][1030-F-H; 1031-A-G]
1.4 Keeping in view the total number of properties
held by the Group of companies, transfer of sale and/or
mortgage of the nine items of properties situated in nine
D cities mentioned in the note should, suffice to enable the
contemnors to comply with the 26 1h March, 2014
directions of this Court. In order, however, to ensure that
the sale value is fair and reasonable, it is made clear that
no item of property shall be sold at a price lesser than
E the circle value of the properties fixed for the area where
such property is located: [Para 21](1031-G-H; 1032-A-B]
1.5 As regards pr'operties situated in London and
New York, by an interlocutory Order passed on 29 1h May,
2014 the contemnors were directed to furnish certain
F
additional information necessary for permitting the sale
of the said assets. The information demanded includes
permission/approval from the Bank of China with whom
the said properties are mortgaged and shares held by
Saharas for repayment of the loans borrowed from the
G
said bank hypothecated/pledged. Saharas were directed
to get the amount outstanding towards the loan
transactions qua the said properties confirmed from the

H
Bank of China so as to give a clear picture of the extent
.
S.E.B.I. v. SAHARAINDIAREAL ESTATE CORPN. LTD. 1017

of liability that remains to be discharged against the said A
assets. The fact that the valuation reports regarding the
three assets were prepared at the instance of the Bank
of China shall also have to be verified and confirmed by
the Bank of China, especially because no sale of the
assets in question can be permitted at a price lesser than B
the price at which the said assets have been valued by
the valuers who are said to be valuers of repute.
Directions regarding sale of the assets outside the
country can, therefore, await the furnishing of
information and verification of the facts. [Para 22] c
[1032-B-G]
1.6 The I.As are disposed of with the following
directions:
(i) The prayer for modification of the terms stipulated 0
in the order granting interim bail to the contemnors is
rejected.
(ii) The prayer for shifting the contemnors to a guest
·house for continued custody and detention tlll they
comply with the directions of this Court for their release E
on interim bail is rejected .
. (iii) The orders passed by this Court and by SEBI
restraining sale and transfer of moveable and
im"moveable properties held by Saharas are modified.
F
(iv) For the sale of the three properties situated
outside the country, the question is left open to be
determined after the requisite documents/information is
made available b.Y Sahara.
(v) Keeping in view the importance of the issues G
that fall for determination in these proceedings and the
ramifications that the directions issued by this Court may
have as also the fact that one very important order which
is sought to be enforced in these proceedings was
H
1018 SUPREME COURT REPORTS [2014] 13 S.C.R.

A passed by a three-Judge Bench, these proceedings are
referred to a three-Judge Bench.
(vi) Having regard to the nature of these
proceedings and the stakes that are involved, Mr. F.S.
Nariman, Senior Advocate is requested to assist the
B Court as an amicus curiae. [Para 23][1032-F-H;
1033-A-C; 1035-A-E]
CIVIL ORIGINAL JURISDICTION: I.A. Nos. 101-103
h
C Contempt Petition (C) No. 412 & 413 of 2012
h
Civil Appeal No. 9813 & 9833 of 2011 and
Contempt Petition (Civil) No. 260 of 2013
D h
Civil Appeal No. 8643 of 2012
Pratap Venugopal, Gaurav Nair, M/s K. J. John & Co.
and Vishwa Pal Singh, Advs. for the Petitioner.
E Dr. Rajeev Dhavan, Sr. Adv., Keshav Mohan, Gaurav
Kejriwal, Jatin Pore, Sandeep Bajaj, Mrs. Shally Bhasin
Maheshwari and GautamAwasthi,Advs. for the Respondents.
The Judgment of the Court was delivered by
T. S. THAKUR, J.
F
1. Sahara India Heal Estate Corporation Limited
(SIRECL) and Sahara Housing Investment Corporation Limited
(SHICL) (hereinafter referred to as 'Saharas' for short) invited
and claim to have collected deposits from general public
G including cobblers, labourers, artisans and peasants in the form
of what were described as 'Optional Fully Convertible
Debentures' (OFCD). On a complaint received from
Professional Group of Investors Protection, SEBI found that
the mobilisation of funds under the Red Herring Prospectus
H
S.E.B.I. v. SAHARA IN DIA REAL ESTATE CORPN. LTD. 1019
[T. S. THAKUR, J.]

(RHP) dated 13th March, 2008 and 6th October, 2009 issued A
by the two companies was not legally permissible. By an ad.
interim ex parte order dated 24th November, 2010 SEBI
directed Saharas not to offer their equity shares/OFCDS or
any other securities to the public or invite subscription in any
manner whatsoever either directly or in~irectly pending further B
orders. Aggrieved by the said order Saharas approached the
High Court at Bombay but the High Court not only declined to
interfere with the directions _issued by SEBI but also passed a
further order on 23'd June, 2011, directing the promoter Mr.
Subrata Roy Sahara and Directors Miss Vandana Bhargava, c
Mr. Ravi Shankar Dubey and Mr. Ashok Roy Choudhary of
Saharas to jointly and severely refund the amount collected by
Saharas in terms of the RHPs issued by them alongwith interest
@ 15% p.a. from the date of the receipt of the deposits till the
•
date of such repayment. Pursuant thereto the SEBI ordered D
thatthe refund of the amount shallbe made only in cash through
demand drafts or pay orders. The SEBI issued further
directions including a direction that Sahara Commodity
Services Corporation Limited (earlier known as SIRECL) and
SHICL shall not access the security market for raising funds till E
the time the aforesaid payments are not made to the
satisfaction of the SEBI.
2. Aggrieved by the o.rder aforementioned, Saharas filed
an appeal before the Securities Appellate Tribunal (SAT) who.
concurred with the view taken by the SEBI, and while affirming F
the order passed by the SEBI, directe9 Saharas to refund the
amount collected from the investors within a period of six
weeks.
3. Appeals No.9813 and 9833 of 2011 were then
G
preferred by Saharas against the above orders in which this
Court by an order dated 28th November, 2011 extended the
period for making the refund upto 9th January, 2012 but finally
disposed of the appeals by an order dated 31st August, 2012.
This Court while doing so modified the order passed by the
SEBI and the SAT and directed Saharas to deposit with the H
1020 SUPREME COURT REPORTS [2014] 13 S.C.R.

A SEBI the amount collected by them through their RHPs together
y.iith interest@ 15% p.a. within a period of three months. The
amount when deposited was directed to be invested in a
nationalised bank to earn interest. Saharas were also directed
to furnish details with supporting documents to establish
B whether they had refunded any amount to the investors who
had subscribed through the RHPs in question. SEBI was .•. en
to examine the correctness of the details so furnished. Failure
to prove the refund of the amount by Saharas had to give rise
to an inference that Saharas had not refunded the amount to
c the real and genuine subscribers as directed by the SEBI.
4. It is common ground that directions issued by this Court
by its order dated 31st August, 2012 were not complied with.
Instead Appeal No.221 of 2012 was preferred by Saharas
before the SAT which was dismissed by the Tribunal as •
D premature. This dismissal was assailed by the Saharas in C.A.
No. 8643 of 2012 that came to be disposed of by a three-
Judge Bench of this Court by an order dated 5th December,
2012 with the following among other directions:
'.'(/) The appellants shall immediately hand over the
E
Demand Drafts, wfifch they have produced in Court, to
SEBI, for a total sum of 51201-Crores and deposit the
balance in terms of the order of 31st August, 2012,
namely, 17,4001- Crores and the entire amount,
including the amount mentioned above, together with
F
interest at the rate of 15 per cent, per annum, with SEBI,
in two installments. The first installment of 10, 0001-
Crores, shall be deposited with SEBI within the first week
of January, 2013. The remaining balance, along with
the interest, as calculated, shall be deposited within the
G
first week of February, 2013. The time for filing
documents in support of the refunds made to any
person, as claimed by the appellants, is extended by a
. period of 15 days. On receipt of the said documents,
SEBI shall implement the directions contained in the
H order passed on 31st August, 2012. In default of deposit
S.E.B.1. v. SAHARAINDIAREALESTATECORPN. LTD. 1021
[T. S. THAKUR, J.]

of the said documents within the stipulated period, or in A
the event of default of deposit of either of the two
installments, the directions contained in paragraph 10
of the aforesaid order dated 31st August, 2012, shall
immediately come into effect and SEBI will be entitled
to take all legal remedies, including attachment and B
sale of properties, freezing of bank accounts etc. for
realisation of the balance dues."
5. Pursuant to the above, Saharas deposited Rs.5120/-
crores with the SEBI but failed to pay the remaining amount.
The balance amount payable is in the vicinity of Rs.12280/- C
crores, exclusive of interest payable on the same. SEBI then
filed Contempt Petitions No.412 and 413 of 2013 and,
Contempt Petition No.260 of 2013 against the contemnors
for non-compliance of the qirections of this Court. Various
orders have been passed in these contempt petitions from D
time to time, and those which are germane for our purpose,
shall be adverted to hereinafter at the appropriate stage. The
applications (IAs) which we are dealing with in this order, are·
filed in these contempt petitions and arise out of the earlier
orders passed. E

6. It is pertinentto point out at this stage that in the cours·e
of the proceedings in the above contempt petitions some
proposals appear to have been explored by the parties for
compliance with the directions of this Court but all such F
proposal were found to be unsatisfactory eventually leading to
the issue of non-bailable warrants against Mr. Subrata Roy
Sahara for his production before this Court. Three other
Directors of Saharas were also ordered to remain present
before this Court.
G
7. On 4th March, 2014 when the contemnors appeared
before this Court one of them in custody, this Court recorded a ·
finding that the directions issued by the Court by its order dated
31s1 August, 2012 and 5th December, 2012 and those issued
on 25th February, 2013 in CA No.8643 of 2012 and IA No.67 H
1022 SUPREME COURT REPORTS [2014] 13 S.C.R.

A of 2013 had not been complied with, despite sufficient
opportunities to the contemnors to do $0. It was also held that
contemnors had adopted dilatory tactics to delay the
proceedings before the SEBI, the High Court and even before
this Court. It was further found that no acceptable proposal
B was presented to comply with the directions of this Court wh:-:h
left no option for this Court except to commit three out of the
four contemnors to judicial custody. The contemnors are, ever
since the said order, in judicial custody in Delhi's Tihar Jail.
8. It is clear from the above narration that as per the orders
C passed, a huge amount of nearly Rs.33,000/- crores is yet to
be deposited. It is also apparent that deadlines for depositing
this amount are long over. No doubt various proposals have ·
been given by Saharas for making payments but none has
fructified. From the tenor of orders passed earlier, it can easily
D be gauged that these proposals did not inspire confidence. In
this backdrop when the matter again came on 26th March,
2014, and the contemnors insisted on granting bail to them,
this Court passed a conditional Order granting interim bail to
the contemnors; the condition being that they deposit
E Rs.10,000/-crores. Out of this a sum of Rs.5,000/- crores had
to be deposited in cash before this Court while the balance
amount of Rs.5000/- crores had to be secured by a bank
guarantee of a nationalised bank, furnished in favour of the
SEBI. Upon compliance with those conditions the contemnors
F were directed to be released from the custody and the amount
deposited by them to be transferred to the SEBI. Since we
are directly concerned with this order, we may, as well, extract
the same:
"We have gone through the fresh proposal filed on
G
25.3.2014. Through the same is not in compliance with
our Order dated 31. 8.2012 or the Order passed by the
three-Judge Bench of this Court on 5. 12. 2012 in Civil
Appeal No. 8643 of 2012 and on 25.2.2013 in I.A. No.
67 of 2013 in Civil Appeal No.9813 of 2011 with I.A.
H No.5 of 2013 in Civil Appeal No.9833 of 2011, we are
S.E.B.I. v. SAHARAINDIAREALESTATECORPN. LTD. 1023
[T. S. THAKUR, J.}

inclined to grant interim bail to the contemnors who are A
detained by virtue of our order dated 4. 3. 2014, on the
condition taht they would pay the amount of Rs.10, 000
crores - out of which Rs. 5, 000 crores to be deposited
before this Court and for the balance a Bank Guarantee
of a nationalised bank be furnished in favour of S.E.B.I. B
and be deposited before this Court.
On compliance, the contemnors be released
forthwith and the amount deposited be released to
S.E.B./.
c
We make it clear that this order is passed in order
to facilitate the contemnors to further raise the balance
amount so as to comply with the Court's Orders
mentioned above."
9. Instead of complying with the above directions Mr. D
Subrata Roy Sahara filed Writ Petition (Crl.) No. 57 of 2014
challenging the validity of the order of this Court dated 4th
March, 2014 on the ground that the same was void and non-
est in the eyes of law. A declaration to the effect that continued
incarceration of the petitioner Mr. Subrata Roy Sahara in E
custody was illegal and a writ of habeas corpus and directions
for release of the petitioner from custody were also prayed for.
The said writ petition was heard by a Bench comprising Hon'ble
K.S. Radhakrishnan and J.S. Khehar, J.J. and came to be
dismissed vide detailed judgment dated 61h May, 2014. F
10. Having traversed in brief, the otherwise long journey
of this case, we revert back to the IAs which are the subject
matter of the instant order. In the present I.As. No.101-103 of
2014 filed in Contempt Petitions (C) No.412 and 413 of2012
and Contempt Petitions (C) No. 260 of 2013, the contemnors G
have made the following prayers:
"(a) Lift the restrictions imposed by this Hon'ble Court
vide its order dated 21.11.2013 and SEBl's order
dated 13. 2. 2013, in respect of operation of .the H
. 1024 SUPREME COURT REPORTS [2014] 13 S.C.R.

A Bank Accountsldepositsldemat accounts/sale of
securities mentioned at Annexure-A;
(b) Lift the restrictions imposed by this Hon'ble Court
vide its order dated 21.11.2013 and SEB/'s order
dated 13. 02. 2013 in respect of the movable and
B immovable properties mentioned in Annexure B,
on condition that net proceeds (after costs and
taxes) thereof be utilized exclusively for payment
ordered by this Hon'ble Court.
c (c) pass such further or other order as this Hon'ble
Court may deem fit and proper in the facts and
circumstances of the present case."
11. Justice K.S. Radhakrishnan having demitted office
and, Justice J.S. Khehar having recused himself from the
D further hearing of the case, the applications were listed before
us for urgent hearing on 19th May, 2014 when the same were
heard in part and directed to come up for continuation on 29th
May, 2014.
12. Appearing for the contemnors, Dr. Rajiv Dhawan
E made a three-fold submission before us. Firstly, he contended
that the order passed by this Court on 261h March, 2014
granting interim bail subject to the conditions stipulated in the
said order deserved to be modified as the conditions
stipulated therein were not only onerous but incapable of being
F complied with in the facts and circumstances of the case.
Alternatively, he contended that compliance with the conditions
stipulated by this Court would require sale of several items of
immovable properties held by Sahara Group of companies
which sales can be finalised only if the contemnors were
G enlarged from custody with a view to enable them to negotiate
the sale transactions. He submitted that keeping in view the
extent and nature of the properties which shall have to be sold
as also the amounts that have been ordered to be deposited
compliance with the conditions stipulated by this Court is
H extremely difficult. if not impossible, unless the contemnors are
S.E.B.I. v. SAHARA IN DIA REAL ESTATE CORPN. LTD. 1025
[T. S. THAKUR, J.]

enlarged from jail and allowed to take steps necessary for A
compliance. It was further contended by Dr. Dhawan that the
· restraint orders against the sale of the moveable and
immoveable properties held by the 'Saharas' made it
impossible for them to arrange compliance unless the
embargo placed upon such sale and transfer by this Court's B
Order dated 21st November, 2013 and that passed by SEBI
on 13th February, 2013 are lifted. He argued that even if the
contemnors were not enlarged on bail till such time the
directions issued by this Court on 26th March, 2014 were not
complied with, the restraint orders would prevent the c
contemnors from raising necessary funds to comply with the
directions issued by this Court. He urged that the total amount
currently lying in several bank accounts and/or invested with
banks and companies in the form of FDs, Bonds and securities
etc. came to Rs.2500/- crores approximately. The broad D
details of the amounts so available have been given by
Saharas in the note submitted by Dr. Dhawan as under:
Details of approx. Rs 2500 Crores along with interest
accrued thereon to be paid by Saharas within 5
working days of lifting the embargo (Pg 39- 54) E
a) Fixed Deposits 1688.74 crores
b) Savings Account 464.44 crores
c) CurrentAccount 18.45 crores
F
a) Securities & Bonds 142.86 crores
b) Government Bonds 72.33 crores
c) Bank/PSU Bond 34.85 crores
2421.67 crores G

Total approx. Rs 2500 crores along with interest
accrued thereon
H
1026 SUPREME COURT REPORTS [2014] 13 S.C.R.

A 13. Encashment of the FDs, sale and transfer of the
bonds and securities would, argued Dr. Dhawan, help the
contemnors to partly comply with the directions regarding
deposit of Rs.5000/- crores by moping Rs.2500/- crores. A
further sum of Rs.2500/- crores approximately would have to
B be raised for deposit which will be possible only by sale of the
immovable properties situated in nine different cities details
whereof were filed by Dr. Dhawan in the form of a statement
with the estimated value of such properties which is as under:
Sr. No. Properties Valuation as per the Page Nos. Of
c · Valuation Report
(Rs. In crorcs)
Volume I

1. Pune 575 60-76@73

2. Ahrredabad 470 81-98 @94

D 3. Amritsar 153.75 99-127@111

4. Chau ma 1430 128 -148@ i40

5. Vasai 1169.72 143 - 160 @ 149 .

6. Ajmer 160 161-175@ 167
E
7. Bhavnagar 103 176 - 191 @ 188

8. Jodhpur 112 192 -208 @ 204
.

9. Bhopal 125 209 - 224 222

F TOTAL 4298.47

14. It was submitted that sale of the above items of
property may also not fully satisfy the conditions stipulated by
this Court for grant of interim bail thereby leave no option for
G Saharas except to sell three Other items of hotel properties
situated outside the country. One of these hotels by the name
Grosvenor House is situated in London while the remaining
two hotels are in New York (U.S.A.). It was urged thatthe said
three items of property also need to be sold to raise the margin
H ' money which the banks concerned insist upon to enable them
S.E.B.I. v. SAHARA IN DIA REAL ESTATE CORPN. LTD. 1027
[T. S. THAKUR, J.]

to issue a bank guarantee. It was submitted that while the A
contemnors propose to mortgage Aamby Valley properties,
details whereof are given in the Annexure B to I.As. No.101-
103, the contemnors would require funds to service any
financial arrangement made with the bank/banks. It was also
contended that according to the estimate of the contemnors, B
the properties situated in London and New York would fetch
an amount of Rs.5,000/- crores to the contemnors which may
be utilised in full or in part towards the margin money necessary
for obtaining the bank guarantee(s). The estimated value
of these three properties is indicated by the contemnors as C
under:
Shares of Value as per Expected Sa Jes Immediate Page No.
entities the Valuation Value Advances
owning the report expected
following
offshore
properties D
Grosvenor GBP 516,000,000 GBP 645,000,000 USD 50,000,000 66 7-Vol Ill
House,
London Rs Rs 63,661,500,000 Rs 2,900,000,000
50,929,200,000

Plaza· Hotel, USD USD 635,000,000 USD 50,000,000 4is-vDilir -
New York 59 2, 000 ,0 00
Rs 36,830,000,000 Rs 2,900,000,000 E
Rs
34,336,000,000

Dreams USD USD 252,000,000 USD 50,000,000 231-Vol lll
Downtown 25 2, 000 ,0 00
Hotel, New Rs 14,616,000,000 Rs 2,900,000,000
York Rs
~·
14,616,000,000
-- F
Total Rs USO
115, 107, 500,000 150,000,000

Rs
8,700,000,000
G
Net Rs 50,366,156,000
Realistic
Equity
Value to
-
Sahara in
India
H
1028 SUPREME COURT REPORTS [2014) 13 S.C.R.

A 15. On behalf of the respondent-SEBI it was argued by
Mr. Venugopal that he has no objection to the encashment of
the FD receipts and other securities and bonds etc. provided
the maturity value and sale consideration of such FDRs,
securities and bonds is directed to be deposited in the
B designated bank account of SEBI viz. SEBI Sahara Refund
Account bearing No.012210110003740with the Bank of India,
Sandra Kurla Complex Branch, Mumbai. As regards sale or
mortgage of properties situated in nine different cities
mentioned above, Mr. Venugopal submitted that appropriate
c safeguards need be provided for such sale and transfer. Mr.
Venugopal suggested the following safeguards in this regard:
(i) Details of valuation, buyer(s) and terms of sales
together with letter (s) of intent be submitted in
advance to this Hon'ble Court;
D
(ii) Buyer(s) ought not to be related party/parties qua
the Sahara Group entities/Director etc. and an
affidavit of undertaking to that effect be filed in this
Hon'ble Court.
E (iii) The sale proceeds be deposited by the buyer
directly to the designated Bank Account of SEBI
viz. "SEBl-Sahara Refund Account" bearing
No.012210110003740 with Bank of India, Bandra
Kur/a Complex Branch, Mumbai; and
F (iv) Actual release of title deeds by SEBI to the buyer
be made only upon receipt of sale proceeds in the
aforementioned Bank Account.
16. A direction to the effect that the sale of the properties
G shalt not be for a price lesser than the circle rates prescribed
for the area where the properties are situated was also
suggested as an additional safeguard, by the learned counsel.
It was also submitted by Mr: Venugopal that so long as the
valuation of the assets situated outside the country is fair and
H reasonable, the SEBI had no objection to the sale thereof to
S.E.B.1. v. SAHARA INDIA REAL ESTATE CORPN. LTD. 1029
[T. S. THAKUR, J.]

enable the contemnors to raise funds necessary for compliance A
with the directions of this Court.
17. We have given our careful consideration to the
submissions made at the bar. It is apparent, from the
submissions made at the bar; that these IAs have two limbs: In
the first instance, the contemnors want relaxation in the restraint 8
orders over the Bank deposits and immovable properties to
comply with the directions of this Court regarding deposit of
the amounts. That part of the prayer does not pose any difficulty,
as the same is in aid of compliance with the directions of this
Court. Second set of prayers is for grant of bail or relaxation of C
jail conditions in the interregnum. Here, we have our
reservations. We are not inclined to modify order dated 261h
March, 2014 granting interim bail to the contemnors upon
conditions stipulated in the said order. We say so because
the background in which the contemnors came to be committed D
to the jail and the finding recorded by the Court that they have
at all earlier stages tried to adopt dilatory tactics and avoided
to comply with the orders passed by the Court does not in our
view call for any modification of the terms on which the
contemnors can be released. Dr. Dhawan pleaded, in the E
alternative, that the least which could be done was to shift the
contemnors from Tihar Jail to a guest house for incarceration
to enable them to take decisions that are necessary for
compliance with the directions issued by this Court. This
request was opposed by Mr. Venugopal, according to whom F
similar requests made repeatedly over several hearings in the
past have been declined by this Court, although no specific
order refusing the same was recorded. In support of that
submission, our attention was drawn to the averments made
by the applicant in I.As No.2 to 4 filed by them on 20 1h May, G
2014 which averments clearly show that similar prayers were
indeed made in the past also.
18. Apart from the fact that the prayer now made is a
repetition of similar prayers made in the past which have not
H
1030 SUPREME COURT REPORTS [2014] 13 S.C.R.

A cut any ice with the bench hearing the matter, we see no reason
to make a departure from the usual course in the present case.
The Bench has passed a conditional bail order after due and
proper consideration having regard to the attendant
circumstances including conduct of the contemnors. The order
B can be modified only under very compelling circumstances.
The only reason given by the applicants is that interim release
or transfer of the contemnors to a guest house would enable
them to dispose of the properties speedily and enable them
to arrange for the requisite Bank Guarantees. We don't think
c so. It is noteworthy that the total amount to be deposited is
between Rs. 33000/- to Rs. 35000/- crores. To show their
bonafides, the contemnors have been directed to deposit less
than 1/3'd of that amount as a condition for bail. After all, even
when this part of the. order is complied with and the contemn ors
o are set free, they will have to arrange the deposit of the balance
amount, which again is very substantial. That apart, it is not
the case of the contemnors that they-or anyone of them suffers
from any medical condition that calls for hospitalisation or an
atmosphere conducive for recovery from any disease. This
E Court has already issued directions permitting visitation to
those who need to visit the contemnors in jail. That arrangement
has not been found to be inadequate as at present so to call
for any change.
19. The prayer for modification of the order, accordingly,
F fails.
20. We, however, find considerable merit in the
submission made by Dr. Dhawan that the restraint order issued
by the SEBI and by this Court forbidding transfer and alienation
of moveable and immoveable assets by the Sahara Group of
G companies has the effect of preventing the contemnors from
complying with the directions of this Court which require them
to deposit Rs.5, 000/- crores in cash besides a bank guarantee
for a similar amount of Rs.5,000/- crores. While it is true that
the contemnors stand committed to prison for their non-
H
S.E.8.1. v. SAHARA INDIA REAL ESTATE CORPN~ LTD. 1031
[T. S. THAKUR, J.]

compliance with the directions of this Court, nothing should A
prevent them from taking steps to comply with the said
directions or the conditions subject to which they have been
granted interim bail. Restraint against transfer of the assets
by the contemnors and the companies promoted by them
precisely has the effect of doing so. The question, however, is B
as to what extent should the orders of restraint be modified.
That aspect assumes importance because of the fact that
Saharas need to eventually deposit a substantial amount which
according to the current estimate may be in the neighbourhood
of Rs. 30,000to Rs. 35,000 crores inclusive of interest accrued C
on the principal amount. Sale of valuable properties at a price
lesser than the market value of such assets is bound to
prejudicially affect the interest of the depositors and defeat
the orders passed by this Court in its letter and spirit. That is
particularly so because according to Mr. Venugopal, SEBI is D
unable to value the properties or process the sale and transfer
thereof. It was in that background that we had indicated to Dr.
Dhawan learned counsel for the appellants that the restraint
orders cannot be lifted in toto and that Saharas should come
forward with a proposal for sale of such properties as were E
sufficient to comply with the interim bail direction of this Court
regarding deposit of Rs.5,000/- crores in cash and a bank
guarantee of Rs.5.000/- in addition. Dr. Dhawan has pursuant
to that observation confined his prayer for permission to sell/
transfer only nine items of properties situated in nine different F
cities in the country and disclosed the estimated value of such
property in the statement which we have extracted above. Dr.
Dhawan on instructions made a statement that although the
note filed by him mentions the names of nine different cities
without giving details of the properties situated in those cities G
but the fact remains that the properties referred to in the note
are only nine in number and nomore.
21. Keeping in view the total number of properties held
by Sahara Group of companies, transfer of sale and/or
mortgage of the nine items of properties situated in nine cities H
1032 SUPREME COURT REPORTS [2014] 13 S.C.R.

A mentioned in the note and extracted above should, in our
opinion, suffice to enable the contemnors to comply with the
26th March, 2014 directions of this Court. In order, however, to
ensure that the sale value is fair and reasonable, we need to
make it clear that no item of property shall be sold at a price
B lesser than the circle value of the properties fixed for the area
where such property is located.
22. As regards properties situated in London and New
York we have by an interlocutory Order passed on 29th May,
2014 directed the contemnors to furnish certain additional
C information necessary for permitting the sale of the said assets.
The information demanded includes permission/approval from
the Bank of China with whom the said properties are
mortgaged and shares held by Saharas for repayment of the
loans borrowed from the said bank hypothecated/pledged. We
D have also directed Saharas to get the amount outstanding
towards the loan transactions qua the said properties
confirmed from the Bank of China so as to give us a clear
picture of the extent of liability that remains to be discharged
against the said assets. The fact that the valuation reports
E regarding the three assets were prepared at the instance of
the Bank of China shall also have to be verified and confirmed
by the Bank of China, especially because no sale of the assets
in question can be permitted at a price lesser than the price at
which the said assets have been valued by the valuers who
F are said to be valuers of repute. Directions regarding sale of
the assets outside the country can, therefore, await the
furnishing of information and verification of the facts.
23. In the result we dispose of these I.As with the following
directions:
G
(i) The prayer for modification of the terms stipulated
in our order dated 26th March, 2014 granting interim
bail to the contemnors is declined and the I.As to
that extent dismissed.
H
S.E.B.I. v. SAHARA INDIA REAL ESTATE CORPN. LTD. 1033
[T. S. THAKUR, J.]

(ii) Prayer for shifting the contemn ors to a guest house A
for continued custody and detention till they comply
with the directions of this Court for their release on
interim bail is also declined and the I.As dismissed
to that extent.
(iii) Orders dated 21st November, 2013 passed by this B
Court and that dated 13th February, 2013 passed
by SEBI restraining sale and transfer of moveable
and immoveable properties held by Sahara are
modified to the following extent:
c
(a) FDs, bonds and securities held by Sahara
Group of companies may be encashed by the
holders thereof subject to the condition that the
maturity value/sale consideration of such FDs,
bonds and securities shall be deposited in the D
designated bank account of SEBI referred to
in the earlier part of this order and details of
such maturity values and sale consideration
furnished to this Court on affidavit to be filed
within four weeks from the date the FDs, bonds
E
and securities are encashed, sold and/or
transferred.
(b) Immovable properties owned by Sahara
Group of companies situated in 9 different
cities mentioned in the note filed by Dr. F
Dhawan and extracted in the body of this order
with an estimated value of Rs. 25001- crores are
permitted to be sold by the companies/other
entities persons in whose names such
properties are held subject to the condition that G
such sales are not for a price lower than the
estimated value indicated in the statement
filed before this Court or the circle rates fixed
for the area in which such properties are
situated. The seller shall furnish to this Court H
1034 SUPREME COURT REPORTS [2014] 13 S.C.R.

A the details of the valuation of the properties
sold and the terms of sales together with a
declaration that the purchasers is not a related
party qua Saharas. Needless to say that upon
deposit of the sale consideration the title deeds
B of the property shall be released by SEBI in
favour of the purchaser(s).
(c) The sale consideration of the properties less
transaction cost and statutory dues on the
same shall be deposited with the SEBI to the
c extent the same is necessary to make a total
deposit of Rs.5,0001- crores inclusive of the
maturity value and sale proceeds of the FDs,
bonds and securities etc. permitted to be
encashed and sold in terms of direction (iii)
D (a) above~ The balance/excess amount of the
sale consideration shall be deposited by
Saharas in a separate account to be opened
in a nationalised bank which deposit shall
remain subject to further orders of this Court.
E
(d) Saharas are also permitted to charge its
immovable properties situated in Aamby
Valley (Pune), the details whereof are given in
Annexure B to /As No.101-103, for purposes
of furnishing a bank guarantee for an amount
F
of Rs. 5, 0001- crores and/or for deposit of
Rs. 5, 0001- crores if there is any shortfall
despite encashment and sales permitted in
terms of (iii)(a) and (iii)(b) above.
G (eJ In modification of the orders dated 261h March,
2014, we direct that the Bank guarantees to
the tune of Rs. 50001- crores shall be furnished
from a nationalised bank or a scheduled bank
only Co-operative Bank Guarantees shall not
H suffice.
S.E.B.I. v. SAHARA INDIA REAL ESTATE CORPN. LTD. 1035
[T. S. THAKUR, J.]

(iv) In so far as sale of the three properties situated A
outside the country are concerned, the question is
left open to be determined after the requisite
documents/information is made available by
Sahara in terms of our order dated 291h May, 2014.
(v) Keeping in view the importance of the issues that B
fall for determination in these proceedings and the
ramifications that the directions issued by this Court
may have as also the fact that one very important
order which is sought to be enforced in these
proceedings was passed by a three-Judge Bench, c
we refer these proceedings to a three-Judge Bench
to be constituted by the Hon'ble Chief Justice of
India.
(vi) We are further of the view that having regard to the D
nature of these proceedings and the stakes that are
involved, we need to appoint an amicus curiae. We
accordingly, request Mr. F.S. Nariman, Senior
Advocate to assist the Court as an amicus curiae.
Shri Nariman shall be free to associate two juniors
E
of his choice to brief him in the matter.
,,
(vii) We direct that the Amicus curiae shall be paid his
fee@ Rs.1, 10,000/- per hearing while the juniors
assisting him shall be paid Rs.10,000/- per person
for every hearing. The amount so due shall be paid F
by SEBI by debit to account Saharas.

Nidhi Jain LAs. disposed of.