Holding

Disobedience of orders of a court strikes at the very root of the rule of law; judicial orders are bound to be obeyed at all costs, and courts have the power to enforce compliance and punish for contempt, including by ordering arrest and detention.

Summary

The Supreme Court dismissed a writ petition filed by Subrata Roy Sahara challenging an order dated 4.3.2014 directing his arrest and detention for non-compliance of earlier orders to refund money collected through Optionally Fully Convertible Debentures (OFCDs). The Court held that the two Sahara companies flouted orders of SEBI, SAT, the High Court, and the Supreme Court with impunity, adopting a defiant and rebellious demeanour. Despite numerous opportunities, the companies failed to comply with the directions to refund investor money. The Court found that the arrest and detention order was validly passed under Articles 129 and 142 of the Constitution to enforce compliance. The petition was dismissed as not maintainable, and the Court deprecated the tactics used to seek recusal of judges. The judgment also emphasized that judicial orders must be obeyed at all costs and that courts have the power to enforce compliance through arrest and detention.

Issues considered

Whether the Bench should recuse itself from hearing the case?
Whether judicial orders must be obeyed at all costs?
Whether an order of arrest and detention can be passed for execution of a money decree?
Whether the impugned order dated 4.3.2014 was passed in violation of natural justice?
Whether the impugned order is vitiated on account of bias?
Whether the writ petition is maintainable under Article 32, Articles 129 and 142, or the maxim ex debito justitiae?

Legislation cited

Code of Civil Procedure, 1908s. 51, s. 55, s. 58
Code of Criminal Procedure, 1973s. 125, s. 128, s. 357, s. 421, s. 431
Constitution of Indias. 129, s. 142, s. 21, s. 32
Securities and Exchange Board of India Act, 1992s. 11(3), s. 15U, s. 15Y

Subjects

Contempt of CourtRecusal of JudgesArrest and DetentionMoney DecreeNatural JusticeBiasMaintainabilitySEBIOFCDRule of LawEnforcement of Court OrdersAbuse of Process

Judgment

[2014] 12 S.C.R. 573

SUBRATA ROY SAHARA A
v.
UNION OF INDIA AND OTHERS
(Writ Petition (Criminal) No. 57 of 2014)
MAY 6, 2014
B
[K.S. RADHAKRISHNAN AND
JAGDISH SINGH KHEHAR, JJ.]

Judiciary - Practice & Procedure - Recusal of Judges - ·
Held: Calculated psychological offensives and rnind games C
adopted to seek recusa/ of Judges, need to be strongly
repulsed - Such tactics deprecated.

Contempt of Court - Mannerism and demeanour
exhibited by contemnor - Appreciation of - Financial crime
0
- Subscription of OFCDs - I/legality in collection of money
from investors -Directions issued by Supreme Court to the
two companies in question, to refund the moneys collected
by them from investors, who had subscribed to their OFCD's
- Non-compliance of - Arrest and detention of contemnors
for enforcement of Court directions - Leg.ality of - Challenged E
- Writ petition - Maintainability of - Held: Not maintainable
- Disobedience of orders of a Court strikes at the very root of .
the rule of law, on which the judicial system rests - Judicial
· orders are bound to be obeyed at all costs - Judicial orders
cannot be permitted to be circumvented - In exercise of F
contempt jurisdiction - Courts have the power to enforce
compliance of judicial orders, and also, the power fo·punish
for contempt - On facts, the two companies in question of
which the petitioner is a promoter, flouted orders passed by
the· SEBI '(FTM), SAT, the High Court and of Supreme Court, G
with impunity - Facts and information solicited were never
disclosed - Position aclopted by the two companies was
always projected on the basis of unverifiable material - The
t.wb companies remained adamant while frittering away
5n · H
574 SUPREME COURT REPORTS (2014) 12 S.C.R.

A repeated opportunities granted by this Court to comply with
the orders - The companies adopted a demeanour of
defiance constituting a rebellious behaviour, not amenable to
the rule of Jaw - Since all the efforts to cajole the two
companies and the petitioner were methodically
B circumvented, this Bench started adopting sequentially
harsher means to persuade compliance of this Court's orders,
leading finally to the passing of the impugned order -
Principles of natural justice were followed - There was no bias
- Constitution of India, 1950- Arts. 32 rlw 21, 129 and 142-
C Securities and Exchange Board of India Act, 1992.
Abuse of Court - Suggestion given to the legislatqre to
formulate a mechanism that· anyone who initiates and
continues a· litigation senselessly, pays for the same -
Legislature to consider introduction of a "Code of Compulsory
D Costs"

Dismissing the petition, the Court

HELD:
E I. Should we be hearing this case?

Would it not be better, for another Bench to
hear this case?

F 1; Though it was suggested, that this Bench should
recuse itself from hearing the case, and require it to be
· heard by another compositic;>n, not including either of the
members of this Bench, however, the oath of this office,
required to go ahead with the hearing. If it was the
counsel's posturing antics, aimed at bench-.hunting or
G bench-hopping (or should we say, bench-avoiding), that
..· would not be allowed. [Para 2 and 11] [592-D; 597-H; 598-
A] . .

2. One of the reasons for retaining the instant petition
H fornearing with ourselves was, that this Bench had heard
SUBRATA ROY SAHARA v. U~ION OF INDIA 575

eminent Senior Counsel engaged by the two companies A
exclusively for over three weeks during the summer
vacation of 2012; had been taken through thousands of
pages of pleadings and had the occasion to watch the
demeanour and defences adopted by the two companies
and the contemnors from time to time, from close 8
quarters. Writing the judgment, had occupied the entire
remaining period of the summer vacation of 2012, as also,
about two months of further time. For any other Bench
to understand the . nuances of the controversy
determined through this Bench's order dated 31.8.2012
(whereby this Court had confirmed the directions earlier C
issued to the two companies in question, to refund the
moneys collected by them from investors, who had
subscribed to their OFCDs, by the SEBI (FTM) and by the
SAT) would require prolonged hearing of the matter.
Months of time, just in the same manner as this Bench D
had taken while passing the order dated 31.8.2012, would
have to be spent again. It was also for the sake of saving
precious time of this· Court, that this Bench decided to
bear the brunt and the rhetoric, of some of the Senior ·
Counsel representing the petitioner. Therefore, it would E
not be better, for another Bench to hear this case. [Para
14] [600-E, G; 601-A-D]

II; Must judicial orders be obeyed at all
costs? .F .
Can a judicial order be disregarded, if the
person concerned feels, that the order is
wholly illegal and void?

3. There is no escape from, acceptance, or G
obedience, or compliance of an order passed by the
Supreme Court, which is the final and the highest Court,
in the country. The provisions referred to in the order
dated 4.3.2014 (Articles 129 and 142 of the Constitution
H
576 SUPREME COURT REPORTS [2014] 12 S.C.R.

A of India) vest in the Supreme Court, the power to
persuade, and if necessary, compel obedience and
observance, of judicial orders. This Court ha·s the
unlimited power (in fact, the sacred obligation), to compel
obedience and observance of its orders.. [Paras 17, 19]
B
Ill. Facts reflecting the demeanour of the two
companies, the petitioner, and other directors
of SIRECL and. SHICL, in the process of
· litigation, leading upto the passing of the order
dated 31.8.2012.
c
4. The demeanour of defiance, adopted by SIRECL
or SHICL or their promoter and directors, which
constituted a rebellious behaviour, challenging the
· authority .of the SEBI, from investigating into the affairs
D of the two companies, brazenness, flowing from
unfathomable power and authority: The contemnors had
maintained an unreasonable stand throughout the
proceedings before the SEBI, SAT, High Court, and even
. ' .
before this Court. [Paras 20, 38] [610-C; 623-F]
E
IV. Efforts made by this Court, to cajole the
contemnors, including the petitioner - Mr.
Subrata Roy Sahara, for compliance of the
orders of this Court, dated 31.8.2.012 and
5~ 12.2012
F
5. Despite affording the contemnors close to 40
hearings, and despite putting them to terms which ought
to have shown them, t.hat leniency would not be extended
forever, the contemnors have remained adamant, and
G steadfast. [Para 54] [640-C-D]
V. · Whether there is no provision, whereunder an
order of arrest and detention can be passed for
the execution of a money-decree?
H
SUBRATA ROY SAHARA v. UNION OF INDIA 577

6. A perusal of Section 51 of the CPC, leaves no room A
for any doubt, that for the execution of a· decree for
payment of money, an executing Court may order the
arrest and detention of the judgment-debtor. Section 55.
of the CPC lays down the manner and modalities to be
followed, while executing an order of arrest or detention. B
A perusal of Section 58 of, ·the CPC postulate the
detention of a judgment-debtor for up to six weeks for the
recovery of a meager amount, of less than Rs.5,000/-.
Where the amount is in excess of Rs.5,000/-, the provision
postulates, detention for upto three months. It is · C
apparent, from the provisions of the CPC, that a Court can
order for the arrest and detention of a person, even for
the enforcement of a paltry amount of Rs.2,000/- (and also
for recovery of amounts, in excess thereof). Even under
the provisions of the Cr.P.C. there is an elaborate
0
procedure prescribed, whereunder a person can be
subjected to arrest and detention for the satisfaction of
a fine or compensation (i.e., for the recovery of a financial
liability). [Paras 58, 60] [646-G-H; 647-A-E; 664-E]
VI. Whether it was imperative for this Court to E
adopt the procedure prescribed under Section
51 (and other allied provisions) of the CPC?

Whether if the above procedure was not
followed, the impugned order passed by this
F
Court on 4.3.2014 was rendered void, and as
such, unsustainable in law?

7. Even though the provisions of the CPC are
inapplicable to proceedings under the SEBI Act (except
when expressly provided for), yet insofar as the present G
controversy is concerned, yet if an order is passed
keeping in mind the parameters laid down in the CPC, it
would be sufficient to conclude that the rules of natural .
justice were fully complied with. The conditions
H
578 SUPREME COURT REPORTS [2014] 12 S.C.R.

A contemplated in Section 51 of the CPC as preconditions,
for the arrest and detention of a judgment-debtor for
executing a Court's order, can be demonstrated as having
been duly complied w!th, before'this Court passed the
impugned order dated 04.03.2014. [Para 69] (678-E-H]
B
8. The first situation contemplated by the proviso ·to
Section 51 of the CPC is, when the executing Court
entertains the view, that the judgment-debtor is likely to
abscond or leave the local jurisdiction of the Court, with
C the object of obstructing or delaying the execution of the
decree. Insofar as the instant aspect of the matter is
concerned, it is apparent that this Court actually
entertained the view, that the petitioner was "likely" to
abscond or leave the local limits of the jurisdiction of this
Court, for obstructing or delaying the execution of the
D decree. The first of the· postulated preconditions for
ordering arrest and detention of a judgment-debtor, for
the execution of the liability resting on the shoulders of
the two companies, was therefore clearly made out,
before the impugned order dated 4.3.2014 was passed.
E [Para 70] (679-B-Fl

9. Another alternative pre-condition contemplated in
the proviso to Section 51 of the CPC is, when a judgment.
debtor has the 'means to pay the ·amount of the decree
F (or some substantial part thereof), and yet refuses or
neglects to pay the same. Insofar as the instant aspect
of the matter is concerned, the two concerned companies
could have easily paid the contemplated amounts, by
selling their assets (in terms of their affidavit dated
G 4.1.2012). [Para 71] [679-F-H] - '

10. Yet another precondition contemplated under the
proviso to Section 51 postulates, that if the judgment-
debtor dishonestly transfers, conceals. or removes any
'
part of his property, or commits any act of bad faith in
H
SUBRATA ROY SAHARA v. UNION .OF INDIA 579

relation to his property, the concerned executing Court A
can enforce a money-decree, by way of arrest and
detention. Since a farcical explanation was tendered by
the two companies in respect of receipt, payment and
transfer of thousands of crores of rupees by way of casti, ·
without reference to any banking transactions B
whatsoever, it was legitimate to infer dishonest transfers,
as well as, bad faith, on behalf of the contemnors.
Therefore, for yet another reason, it was open for this
Court, to order arrest and detention of the contemnors
(including the present petitioner), for enforcement of the C
directions issued by this Court on 31.8.2012 and
5.12.2012. [Para 72] [682-H; 683-A-C]

11. The instant determination should not be
understood to mean, that Section 51 of the CPC is
applicable to the facts and circumstances of this case. D
The instant determination should only be understood to
mean, that the parameters laid down in Section 51 of the
CPC, stood fully satisfied, before the arrest and detention
order dated 4.3.2014 was passed. It is clear, that despite
the petitioner (and the other companies) having means E
to pay, they have unfairly and willfully failed to pay.
[Paras 73, 77] [683-D-E; 690-G]

VII. Whether the impugned order dated 4.3.2014,
was passed in violation of the rules of natural F
justice?

12. It is not possible to accept, that while passing the
above order, no opportunity was afforded to the
petitioner - Mr. Subrata Roy Sahara. Indeed every
response made by the alleged contemnors, was taken G
into consideration on each occasion. The alleged
contemnors were found ·to be playing tricks with· this
Court. Not only were counsel representing the alleged
contemnors heard from time to time, personal hearing
was also afforded to the directors and Mr. Subrata-Roy H
580 SUPREME COURT REPORTS [2014) 12 S.C.R.

A Sahara, the petitioner herein on 4.3.2014. In fact, Mr.
Subrata Roy Sahara, the petitioner herein, was heard
repeatedly to his heart's content, before the order dated
4.3.2014 was passed. For' the reasons recorded
hereinabove, it is not possible to accept the contention
B advanced at the hands of the 'counsel for the petitioner,
that the order dated 4.3.20:14 was passed without
following the rules of natural justice, or that, the above
order violates any of the petitioner's fundamental rights.
[Para 96] [709-F-H; 710-A-B] '
c VIII. Whether the impugned order dated 4.3.2014, is
vitiated on account of bias?

13. The instant plea of bias, is based on the
petitioner's frustration, arising out of being cornered into
D a situation, wherefrom there is no escape. The assertion,
that this Bench would not be satisfied under any
circumstances,. with the petitioner's arguments and
submissions on merits, is clearly misconceived. The
assertion made by the petitioner, that this Bench had
E · already prejudged the matter, and no relief could be
expected from it, is likewise a total misconstruction of the
proceedings being dealt with. There is no /is pending,
wherein this Bench has to determine tile merits of the
claims raised by the rival parties. In a situation, where rival
F claims of parties; have to be decided on merits, such a
submission could have possibly been made. On facts,
merits of the claims (and counter-claims) have already
been settled by this Court's order dated 31.8.2012. There
cannot, therefore be a prejudged mind (all that has to be
G decided, has already been adjudged). [Paras 105 and 106]
[720-C-F; 721-C]

14. It is not the case of the petitioner, that this Bench
has any connection ·with either the two companies under
reference, or any other company/firm which constitutes
H
SUBRATA ROY SAHARA v. UNION OF INDIA 581

the Sahara Group. None of the disguised aspersions cast A
by Counsel, would be sufficient to justify the invocation ·
of the maxim, that justice must not actually be done, but
must also appear to be done. Even though our
combination as a Bench, did not exist at the time, when
the present petition was filed, a Special Bench, with the B
present composition, was constituted by Hon'bie the
Chief Justice, as a matter of his conscious determination.
No litigant, can be permitted to dissuade this Bench, in
discharging the onerous responsibility assigned to it by
Hon'ble the Chief Justice. Since this Bench is no longer C
possessed with any adjudicatory role, insofar as the
controversy on merits is concerned, the principal
allegation of bias itself pales into insignificance. In terms
of this Bench's order dated 31.8.2012, the only gainer on
the other side, is the. Government of India. If the "other
side", is the Government of India, there is certainly no
0
substance in the aspersion cast by the counsel. [Paras
107, 108 and 111] [721-E; 722-A-C, D; 726-G; 727-B]
IX. A few words. about the defence of redemption
of OFCD's, offered by the two companies: E
15. Viewed from any angle, there is no substance in
the contention advanced on behalf of the two companies,
that the moneys payable to the investors had been
refunded to them. Accordingly, there is no merit in the F
prayer, that while making payments in compliance with
this Court's orders dated 31.8.2012 and 5.12.2012, the two
companies were entitled to make deductions of Rs.17,443
crores (insofar as SIRECL is concerned) and Rs.5,442
crores (insofar as SHICL is concerned). Nevertheless, this G
Bench has still retained a safety valve, inasmuch as, the
SEBI has been directed to examine the authenticity of the
documents produced by the two companies, and in case
the SEBI finds, that redemptions have actually been
made, the two companies will be refunded the amounts,
H
582 SUPREME COURT REPO.RTS [2014] 12 S.C.R.

.A equal to the redemptions found to have been genuinely
·made. [Para 121) [754-H; 755-A-C]

X. The maintainability of the present petition

16. The instant petition has been styled as a criminal.
B writ petition. The instant petition is not maintainable as
no fresh petition is shown to be maintainable, under the
provisions (Articles 129 and 142 of the Constitution of
India). Moreover, there is neither any jurisdictional error,
nor any error in law has been shown to be made out, from
C the impugned order dated 4.3.2014. [Para 143] [785-H;
786-A-B]

17. Conclusions

a. There is no inerit in the cont1:1ntion advanced on
D behalf of the petitioner, that this Bench should recuse
itself from the hearing of this case. Calculated
psychological offensives and mind games adopted to
seek recusal of Judges, need to be strongly repulsed.
Such tactics are deprecated and a similar approach is
E commended to other Courts, when they experience such
behaviour.

b. Disobedience of orders of a Court strikes at the
very root of the rule of law, on which the judicial system
F rests. Judicial orders are bound to be obeyed at all costs.
Howsoever grave the effect may be, is no answer for
non-compliance of a judicial order. Judicial orders cannot
be permitted to be circumvented. In exercise of contempt
jurisdiction, Courts have the power to enforce compliance
G of judicial orders, and also, the power to punish for
contempt.

c. The facts of this case reveal, that the two
·companies of which the petitioner is a promoter, flouted
orders passed by the SEBI (FTM), SAT, the High Court
H
SUBRATA ROY SAHARA v. UNION OF INDIA 583

and of this Court, with impunity. Facts and information A
solicited were never disclosed. The position adopted by
the two companies was always projected on the basis of
unverifiable material. This Court recorded in its order
dated 31.8.2012, that the factual assertions made on
behalf of the two companies seemed to be totally B
unrealistic and could well be fictitious, concocted and
made up, and also remarked, that the affairs of the two
companies seemed to be doubtful, dubious and
questionable. The above position has remained
unaltered, inasmuch as, no authentic and verifiable c
material sought has ever been furnished by the two
companies. The two companies remained adamant while
frittering away repeated opportunities granted by this
Court to comply with the orders dated 31.8.2012 and
5.12.2012. The companies adopted a demeanour of
0
defiance constituting a rebellious behaviour, not
amenable to the rule of law. ·

d. Efforts made to cajole the two companies and the
petitioner were always stonewalled and brushed off. All
intermediary means to secure compliance of this Court's E
orders dated 31.8.2012 and 5.12.2012, were evaded and
skirted. Even proposals to secure the payments (as
against, the payment itself) to be made to the investors,
in terms of this Court's orders, were systematically
frustrated. Similar proposals made unilaterally by counsel F
representing the two companies and the petitioner
himself, turned out to be ploys to sidetrack and derail the
process of law. Such unilateral proposals, were
unilaterally withdrawn. Since all the efforts to cajole the
two companies and the petitioner were methodically G
circumvented, this Bench started adopting sequentially
harsher means to persuade compliance of this Court's
orders dated 31.8.2012 and. 5.12.2012, leading finally to
the passing of the impugned order dated 4.3.2014.
H

•
584 SUPREME COURT REPORTS [2014] 12 S.C.R.

A e. The Code of Civil Procedure, 1908, which regulates
civil proceedings in India, expressly contemplates arrest .
and detention for the enforcement of a money decree.
And the Code of Criminal Procedure, 1973, which
regulates criminal proceedings in India, envisages arrest
B and detention as a mean for. enforcing financial liability.
The submission made by the Counsel for the petitioner
to the effect, that execution of a money decree or
enforcement of a financial liability by way of arrest and
detention was a procedure unknown to law, is therefore,
c wholly misconc:;eived. ·

f. The submission made by the counsel for the
. petitioner, that this Court was obliged to comply with the
procedure contemplated under Section 51, and rules 37
and 40 of Order XXI, of the Code of Civil Procedure, 1908,
D before ordering the arrest and detention of the petitioner
(and the other contemnors) is devoid of any merit,·
because Section 51 of the Code of Civil Procedure, 1908
and the other allied provisions referred to above, are not
applicable to actions emanating out of the SEBI Act. So
E also, rule 6 of Order XIII of the Supreme Court Rules,
1966, has no applicability, with reference to the SEBI Act.
Be that as it may, this Court before passing the impugned
order dated 4.3.2014 had immaculately followed the
procedure contemplated under the provisions of the
F Code of Civil Procedure, 1908, as were relied upon by the
counsel for the petitioner, before ordering the petitioner's
(and the other contemnors') arrest and detention.
g. In response to a prayer made by the SEBI (in
G Interlocutory Application nos. ~8 and 69 of 2013 in Civil
Appeal no. 9813 of 2011), inter alia, seeking the arrest and
detention of the petitioner (and two other contemnors),
the petitioner filed a personal reply by way of an affidavit.
The petitioner in his written ·reply raised all possible legal
H
SUBRATA ROY SAHARA v. UNION OF INDIA 585

and factual defences. Different orders were passed from · A
time to time in furtherance of the prayers made in the
aforementioned interlocutory applications, including the
order preventing the petitioner (and the other
contemnors) from leaving the country, as also, the order
restraining the two companies from parting with any B
movable or immovable property. A number of
opportunities of hearing were given to the counsel
representing the two companies and the contemnors.
Finding the attitude of the contemnors defiant and non-
cooperative, their personal presence was ordered. The C
petitioner, Who was directed to be present on 26.2.2014,
did not enter personal appearance. His personal
presence was enforced through non-bailable warrants on
4.3.2014. During the course of their personal presence in
Court, the petitioner and the other contemnors were o
afforded an opportunity of oral hearing. The petitioner
repeatedly addressed this Court on 4.3.2014. Only
thereafter, the impugned order dated 4.3.2014 was
passed. In view of the above facts it is not possible to
accept, that the impugned order was passed without E
following the rules of natural justice or without affording
the petitioner an opportunity of hearing.

h. The law laid down by this Court in Jaswant Singh
case has been found to be fully applicable to the facts of
this case, particularly the mannerism and demeanour F
exhibited by the petitioner and some of the counsel.
Recusal of this Bench from the case sought on the
ground Qf bias, has been found to be devoid of any meril
Each and every insinuation levelled by the petitioner and
his Counsel, during the course of hearing, has been G
considered and rejected on merits.
i. The defence raised by the petitioner, that the two
companies had alrE!ltldy substantially redeemed the
OFCD's, has been examined under two different H
586 SUPREME COURT REPORTS [2014] 12 S.C.R.

A perspectives. Firstly, the above defence is unavailable to
the two companies in law, after the same was rejected on
5.12.2012 by a three-Judge Division Bench (in Civil
Appeal no. 8643 of 2012 and Writ Petition (Civil) no. 527
of 2012). Secondly, the said defence has been examined
B from various factual perspectives and has been· found to
be untenable. Sole reliance on general ledger entries
without any other authentication, has been held to be
insufficient proof of the refunds .claimed to have been
made by the two companies to the investors, specially
C because, such cash redemptions have not been affirmed
in the certificate issued by the firm of Chartered
Accountants, which had audited the accounts of the two
companies.

0 j. The submission advanced asserting the
maintainability of the instant petition under the maxim of
ex debito justitiae, is held to be devoid of any merit. The
contention advanced, projecting the maintainability of the
instant petition under Article 32 .read with Article 21 of.the
E Constitution of India, has been found to be unacceptable
in law. The submission advanced, supporting the
maintainability of the instant petition by placing collective
reliance on Articles 129 and 142 of the Constitution of
India, has also been found to be ill-founded. [Para 145]
[786-C-H; 787-A-H; 788-A-H; 789-A-H; 790-A-G]
F
Jolly George Varghese & Anr. v. Bank of Cochin (1980)
2 SCC 360: 1980 (2) SCR 913 - held inapplicable.
Jaswant Singh v. Virender Singh & Ors. 1995 Supp. (1)
G SCC 384: 1994 (5) Suppl. SCR 336 - held applicable.
A.R. Antu/ay v. R.S. Nayak (1988) 2 SCC 602: 1988 (1)
Suppl. SCR 1; Rupa Ashok Hurra v. Ashok Hurra (2002) 4
SCC 388: 2002 (2) SCR 1006; R.K Anand v. Delhi High
Court (2009) 8 SCC 106: 2009 (11) SCR 1026; Naresh
H Sridhar Mirajkar v. State of Maharashtra AIR 1967 SC 1; K.A.
SUBRATA ROY SAHARA v. UNIOf\:I OF INDIA 587

Ansari v. Indian Airlines Ltd. (20.09) 2 SCC 164: 2008 (16) A
SCR 780; Maninderjit Singh Bitta v. Union of India (2012) 1
SCC 273; Supreme Court Bar Association v. Union of India
(1998) 4 SCC 409: 1998 (2) SCR 795; Ku/dip Kaur v.
Surinder Singh (1989) 1 SCC 405: 1988 ( 3 ) Suppl. SCR
762; Poongodi v. Thangave/ (2013) 10 SCC 618: 2013 (9) B
SCR 862; KA. Abbas H.S.A. v. Sabu Joseph & Anr. Etc.
(2010) 6 SCC 230: 2010 (6 ) SCR 822; P. Ramachandra
Rao v. State of Kamataka (2002) 4 SCC 578; Manak Lal v.
Dr. Prem Chand (1957) SCR 575; Frome United Breweries
Co. v. Bath Justices (1926) AC 586; Rex v. Sussex Justices, c
Ex parte McCarthy (1924) 1 KB 256; Rex v. Essex Justices,
Ex parte Perkins (1927) 2 KB 475; M.S. Ahlawat v. State of
Haryana & Anr. (2000) 1 SCC 278: 1999 (4) Suppl. SCR
160; Rehman Antu/ay v. Union of India (1988) 2 SCC 764;
Naresh Shridhar Mirajkar v. State of Maharashtra AIR 1967
0
SC 1; 1966 SCR 744; Col. Dr. B. Ramachandra Rao v. The
State of Orissa & Ors. (1972) 3 SCC 256; Manubhai Ratilal
Patel v. State of Gujarat (2013) 1 SCC 314: 2012 (8) SCR
993; Jharia S/o Maniya v. State of Rajasthan & Anr. (1983) 4
SCC 7: 1983 (3) SCR 475 and Ranjit Singh v. Union Territory E
of Chandigarh & Anr. (1991) 4 SCC 304: 1991 (3) SCR 742
- referred to. ·

Case Law Reference:
1988 (1) Suppl. SCR 1 referred to Para 3
F
2002 (2) SCR 1006 referred to Para 7
2009 (11) SCR 1026 referred to Para 10
AIR 1967 SC 1 referred to Para 18
G
(2009) 2 sec 164 referred to Para 19
(2012) 1 sec 213 referred to Para 19
1998 (2) SCR 795 referred to Para 19
H
588 SUPREME. COURT REPORTS [2014] 12 S.C.R.

A .1988 (3) Suppl. SCR 762 referred to Para 59
2013 (9) SCR 862 referred to Para 59
2010 (6) SCR 822 referred to Para 60
(2002) 4 sec 578 referred to Para 65
8
1980 (2) SCR 913 held Para 77
inapplicable
(1957) SCR 575 referred to Para 101
c (1926) AC 586 referred to Para 101
(1924) 1 KB 256 referred to Para 101
(1927) 2 KB 475. referred to Para 101

D 1994 (5) Suppl. SCR 336 held applicable Para 112
1966 SCR 744 referred to Para 141(i)
I
(1972) 3 sec 256 referred to Para 141(ii)
1983 (3) SCR 475 ~eferred to Para 141(iii)
E
1991 (3) SCR 742 referred to Para 141(iv)
2012 (8) SCR 993 referred to· Para141(v)
CRIMINAL ORIGINAL JURISDICTION: Writ Petition
F (Criminal) NO. 57 of 2014

Under Article 32 of the Constitution of India.
Ram Jethmalani, Dr. Rajiv Dhawan, S. Ganesh, Gautam
Awasthi, Keshav Mohan, Gaurav Kejriwal, Simranjeet Singh,
G Gautam Talukdar, Jatin Pore, Gurpreet S. P., Sandeep Bajaj,
Ashish Dixitfor the Petitioner.

Mukul Gupta, ASG, Aivind Datar, Pratap Venugopal,
Surekha Raman, Meenakshi Chauhan, P.K. Jha, Anuj Sarma,
H
SUBRATA ROY SAHARA v. UNION OF INDIA 589

Gaurav Nair, Debarshi Bhuyan (for K.J. John & Co.), T. A. Khan, A
Aseem Swaroop, Suvarna Kashyap, Rishab Kaushik, B.K.
Prasad for the Respondent.

The Judgment of the Court was delivered by

JAGDISH SINGH KHEHAR, J. B

I. Should we be hearing this ~ase?

Would it not be better, for another Bench to
hear this case?
c
1. In the present writ petition, the petitioner has made the
following prayers:-

"(a) Declare the order dated 4.3.2014 as void, nullity
and non-est in the eyes of law; D
(b) Declare that the incarceration and the custody of
the petitioner are illegal which should be terminated
forthwith;

(c) Issue such other writ in the nature of Habeas E
(corpus) or other writs, order or direction for release
of the petitioner from the illegal custody.

(d) Pass such further orders as this Hon'ble Court may
deem fit and proper in the facts and circumstances F
of the casec"

A perusal of the prayers made in the writ petition reveals,
that in sum and substance the petitioner has assailed the order
dated 4.3.2014 passed by us in Contempt Petition (Civil) nos.
412 and 413 of 2012 and Contempt Petition (Civil) no. 260 of G
2013. To understand the exact purport of the prayers made in
the writ petition, it is essential to extract herein the order dated
4.3.2014, which is subject matter of challenge through the
present criminal writ petition:-
H
590 SUPREME COURT REPORTS [2014] 12 S.C.R.

A "1. Contemnors are personally present in the Court,
including the fifth responctent, who has been brought
to the Court by the U.P. Police, in due execution of
our non-bailable warrant of arrest.

2. We have heard the Senior Counsel on various
B
occasions and perused the various documents,
affidavits, etc. We have heard the learned counsel
and contemnors today as well. We are fully
convinced that the contemnors have not complied
with our directions contained in the judgment dated
c August 31, 2012, as well as orders dated
December 5, 2012 ahd February 25, 2013 passed
in Civil Appeal no. 8643 of 2012 and I.A. no. 67 of
2013 by a three Judge Bench of this Court.

D 3. Sufficient opportunities have been given !cf the
contemnors to fully comply with those orders and
purge the contempt committed by them but, rather
than availing of the same, they have adopted
various dilatory tactics to delay the implementation
E of the orders of this Court. Non-compliance of the
orders passed by this Court shakes the very
foundation of our jud.icial system and undermines
the rule of law, which we are bound to honour and
protect. This is essential to maintain faith· and
F confidence of the people of this country in the
judiciary.

4. We have found that the contemnors have
maintained an unreasonable stand throughout the
proceedings before SEBI, SAT, High Court and
G even before this Court. Reports/analysis filed by
SEBI on 18.2.2014 make detailed reference to the
s.ubmissions, documents, etc. furnished by the
contemnors, which indicates that they are filing and
making unacceptable statements and affidavits all
H through and even in the contempt proceedings.
SUBRATA ROY SAHARA v. UNION OF INDIA 591
[JAGDISH SINGH KHEHAR, J.]
Documents and affidavits produced by the A
contemnors themselves would apparently falsify
their refund theory and cast serious doubts about
the existence of the so-called investors. All the fact
finding authorities have opined that majority of
investors do ·not exist. Preservation of market B
integrity is extremely important for economic growth
of this country and for national interest. Maintaining
investors' confidence requires market integrity and
control of market abuse. Market abuse is a serious
financial crime which undermines the very financial c
structure of this country and will make imbalance in
wealth between haves and have nots.

5. We notice, on this day also, no proposal is
forthcoming to honour the judgment of this Court
dated 31st August, 2012 and the orders passed by D
this Court on December 05, 2012 and February 25,
2013 by the three Judge Bench. In such
circumstances, in exercise of the powers conferred
under Articles 129 and 142 of the Constitution of
India, we order detention of all the contemnors, E
except Mrs. Vandana Bhargava (the fourth
respondent) and send them to judicial custody at
Delhi, till the next date of hearing. This concession
is being extended towards the fourth respondent
because she is a woman Director, and "also, to F
enable the contemnors to be in a position to
propose an acceptable solution for execution of our
orders, by coordinating with the detenues. Mrs.
Vandana Bhargava, who herself is one of the
Directors, is permitted to be in touch with the rest G
of the contemnors and submit an acceptable
proposal arrived at during their detention, so that
the Court can pass appropriate orders.

6. List on March 11, 2014 at 2.00 p.m. All the
H
592 SUPREME COURT REPORTS [2014] 12 S.C.R.

A contemnors be produced in Court on that date. Mrs.
Vandana Bhargava, the fourth respondent, to
appear on her own. However, liberty is granted for
mentioning the matters for preponement of the date,
if a concrete and acceptable prot>.osal can be ·
B offered in the meantime."

2.. When this matter came up for.hearing for the first time
on 12.3.2014, Mr. Ram Jethmalani, learned Senior Counsel
appearing for the petitioner, sought liberty to make a frank and
candid submission. He told us, that it would be embarrassing
C for him, to canvass the submissions which he is bound to raise
in the matter before us, i.e., before the Bench as it was presently
structured. It was also his submission, that hearing this matter
would also discomfort and embarrass us as well. He therefore
suggested, that we should recuse ourselves from hearing the
D case, and require it to be heard by another composition, not
including either of us.

3. Mr. Arvind Datar, learned Senior Counsel, appearing for
the respondents, vociferously implored us not ·to withdraw
E ourselves from hearing the case. It was his vigorous and
emphatic contention, that the present petition was not
maintainable, either under the provisions of the Constitution of
India, or under any other law.of the land. Inviting the Court's
attention to the heading of the petition, it was submitted, that it
F did not diselose any legal provision, whereunder the present writ
petition had been filed. He submitted, that as per its own
showing (ascertainable from the title of the petition), the present
writ petition had been filed, under the power recognized and
exercised by this Court, in A.R. Antulay v. R.S. Nayak, (1988)
2 sec 602. It was the assertion of learned counsel, that the
G above judgment, has now been clarified by this Court. According
to learned counsel, it has now been settled, that the above
judgment did not fashion or create any such power or
jurisdiction, as is sought to be invoked by the petitioner.

H
SUBRATA ROY SAHARA v. UNION OF INDIA 593
[JAGDISH SINGH KHEHAR, J.]
4. Besides the above purely legal submission, learned A
Senior Counsel for the respondents equally candidly submitted,
that the filing of this petition was a carefully engineered device,
adopted by the petitioner as a stratagem, to seek our
withdrawal from the matter. In order to emphasise that this
Bench was being arm twisted, learned counsel invited·our B
attention to the foot of the last page of the petition, i.e., to the
authorship of the petition, just under the prayer clause. The text,
to which our attention was drawn, is set out below:-
"Signed and approved by:-
Mr. Ram Jethmalani, Sr. Adv. C
Dr. Rajeev Dhawan, Sr. Adv.
Mr. Rakesh Dwivedi, Sr. Adv.
Mr. S. Ganesh, Sr. Adv.
Mr. Ravi Shankar Prasad, Sr. Adv."
According to learned counsel, this is the first petition he D
has seen in his entire professional career, which is settled by
five Senior Counsel, all of them of recognized eminence:

5. It would be relevant to mention, that when the matter was
taken up for hearing by us, for the first time on 12.3.2014 at E
2.00 PM, it had been so listed on the directions of Hon'ble the
Chief Justice in furtherance of a "mentioning for listing·, on the
morning of the same day, i.e., 12.3.2014. ·We had therefore,
no occasion to go through the pleadings of the present writ
petition. After having heard submissions of rival counsel noticed
F
above, we decided not to proceed. with the matter, before
going through the pleadings of the case. We therefore directed
the posting of the case for hearing on the following day, i.e.,
13.3.2014.

6. By the next date, we had an opportunity to determine, G
how exactly the matter was listed before us, as also, to
ascertain whether the pleadings of the present criminal writ
petition incorporated material which would embarrass us, as
suggested by the learned counsel for the petitioner. So far as
H
594 SUPREME COURT REPORTS · [2014] 12 S.C.R.

A the filing and listing of the present petition is concerned, it was
filed by the petitioner in the Registry of this Court on 11.3.2014.
Thereafter, learned counsel for the petitioner, appeared before
the Bench presided over by Hon'ble the Chief Justice, on the
morning of 12.3.2014 to "mention for listing", for the same day.
B The Court Master of the Bench presided over by Hon'ble the
Chief Justice, recorded,the following note:-

"As directed list today i.e., 12.3.2014, if in order, in the
mentioning list at 2.00 PM, before appropriate Bench."

C For the concerned Bench before which the matter was to
be posted, the noting file of the branch, reads as under:-

"Apprised.

May be listed before the Special Bench comprising
D Hon'ble Mr. Justice K.S. Radhakrishnan and Hon'ble Mr.
Justice J.S. Khehar."

The above note was recorded on the directions of Hon'ble
the Chief Justice. A perusal of the above sequence of events
E reveals, that even though our combination as a Bench did not
exist for 12.3.2014, yet a Special Bench was constituted for
listing the present writ petition, in its pr~sent arrangement: It is .
therefore reasonable to infer, that the present constitution of the
Bench, was a conscious determination of Hon'ble the Chief
F Justice.

7. Now the embarrassment part. Having gone through the
pleadings of the writ petition we were satisfied, that nothing
expressed therein could be assumed, as would humiliate or
discomfort us by putting us to shame. To modify an earlier order
G passed by us, for a mistake we may have committed, which is
apparent on the face of the record, is a jurisdiction we regularly
exercise under Article 137 of the Constitution of India. Added
to that, it is open to a party to file a curative petition as held by
this Court in Rupa Ashok Hurra v. Ashok Hurra, (2002) 4 SCC
H
SUBRATA ROY SAHARA v. UNION OF INDIA 595
[JAGDISH SINGH KHEHAR, J.]
388. These jurisdictions are regularly exercised by us, when A
made out, without any embarrassment. Correction of a wrong
order, would never put anyone to shame. Recognition of a
mistake, and its rectification, would certainly not put us to
shame. In our considered view, embarrassment would arise
when the order assailed is actuated by personal and/or B
extraneous considerations, and the pleadings record such an
accusation. No such allegation was made in the present writ
petition. And therefore, we were fully satisfied that the feeling
entertained by the petitioner, that we would not pass an
appropriate order, if the order impugned dated 4.3.2014 was C
. found to be partly or fully unjustified, was totaily misplaced.

8. It is therefore, that we informed learned Senior counsel,
that we would hear the matter. It seems that our determination
to hear the matter marked to us by Hon'ble the Chief Justice,
was not palatable to some of the learned counsel for the D
petitioner. For, Mr. Ram Jethmalani, learned Senior Counsel,
was now more forthright. He told us, that we should not hear
the matter, because "his clienf' had apprehensions· of prejudice.
He would, however, not spell out the basis for such
apprehension. Dr. Rajeev Dhawan, came out all guns blazing, E
in support of his colleague, by posing a query: Has the Court
made a mistake, 'serious enough, giving rise to a presumption
of bias "... even if it is not there ... "? It was difficult to understand
what he meant. But seriously, in the manner Dr. Rajeev Dhawan
had addressed the Court, it sounded like an insinuation. Mr. F
Ram Jethmalanijoined in to inform us, that the Bar (those sitting
on the side he represented} was shell-shocked, that an order
violating the petitioner's rights under Article 21 of the
Constitution of India, had been passed, and it did not seem to
cause any concern to us. The petitioner had been taken into G
judicial custody, we were told, without affording him any
opportunity of hearing. Learned counsel asked the Bench, to
accept its mistake in ordering the arrest and detention of the
petitioner, and acknowledge the "human error" committed by
the Court, while .passing the impugned order dated 4.3.2014. H·
596 SUPREME COURT REPORTS (2014] 12 S.C.R.

A Dr. Rajeev Dhawan, then informed the Court, that" ... moments
come in the profession, though rarely, when we tell the Judges
of the Supreme Court, that .you have committed a terrible
terrible mistake, by passing an order which has violated the civil
liberties of our client. ... that the order passed is void .. .". And
B moments later, referring to the order, he said, " ... it is a
draconian order ... " The seriousness of the submissions apart,
none of them, even remotely, demonstrated "bias".

· 9. But Mr. C.A. Sundaram, another Senior Counsel
C representing the petitioner, distanced himself from the above
submissions. He.informed the Court," ... I am not invoking the
doctrine of bias, as has been alleged .. ." We are of the view,
that a genuine plea of bias alone, could have caused us to
withdraw from the matter, and require it to be heard by some
other Bench. Detailed submissions on the allegations
D constituting· bias, were addressed well after proceedings had
gone on for a few weeks, the.'same _have been dealt with
separately (under heading VIII, "Whether the impugned order
dated 4.3.2014, is vitiated on account of bias?"). Based on the
s't.lbmissions advanced by learned counsel, we could not
E persuade ourselves in accepting the prayer for recusal.

10. We have recorded the above narration, lest we are
accused of not correctly depicting the submissions, as they
were canvassed bef-ore us. In our understanding, the oath of our
F office, required us to go ahead with the hearing. And not to be
overawed by such submissions. In our view,. not hearing the
matter, would constitute an act in breach of our oath of office,
which mandates us to perform the duties of our office, to the
best of our ability, without fear or favour, affection or ill will. This
G is certainly not the first time, when recusal has been sought by
learned counsel. Such a recorded peremptory prayer, was
made by Mr. R.K. Ana·nd, an eminent Senior Advocate, before
the 'High Court of Delhi, seeking the recusal of Mr. Justice
Manmohan Sarin from hearing his personal case. Mr. Justice
Manmohan Sarin while declining the request made by Mr. R.K.
H
SUBRATA ROY SAHARA v. UNION OF INDIA 597
(JAGDISH SINGH KHEHAR, J.]
Anand, observed as under: A

"The path of recusal is very often a convenient and a soft
option. This is especially so since a Judge really has no
vested interest in doing a particular matter. However, the
oath of office taken under Article 219 of the Constitution
8
of India enjoins the Judge to duly and faithfully and to the
best of his knowledge and judgment, perform the duties
of office without fear or favour, affection or ill will while
upholding the constitution and the .laws. In a case, where
unfounded and motivated allegations of bias are sought
to be made with a view of forum hunting I Bench C
preference or brow-beating the Court, then, succumbing
to such a pressure would tantamount to not fulfilling the
oath of office."

The above determination of the High Court of Delhi was D
assailed before this Court in R.K. Anand v. Delhi High Court,
(2009) 8 SCC 106. The. determination of the High Court
whereby Mr. Justice Manmohan Sarin declined to withdraw from
the hearing of the case came to be upheld, with the following
observations: E

"The above passage, in our view. correctly sums up what
should be the Court's response in the face of a request
for recusal made with the intent to intimidate the court or
to get better of an 'inconvenient' judge or to obfuscate the
issues or to cause obstruction and delay the proceedings F
or in any other way frustrate or obstruct the course of
justice."

(emphasis is ours).
G
11. In fact, the observations of the High Court of Delhi and
those of this Court reflected, exactly how it felt, when learned
counsel addressed the Court, at the commencement of the
hearing. If it was learned counsel's posturing antics, aimed at
bench-hunting or bench-hopping (or should we say, bench- H
598 SUPREME COURT REPORTS [2014] 12 S.C.R.

A avoiding), we would not allow that. Affronts, jibes and carefully
and consciously planned snubs could not deter us, from
discharging our onerous responsibility. We could at any time,
during the course of hearing? walk out and make way, for
another Bench to decide the matter, if ever we felt that, that
B would be the righteous <;curse to follow. Whether or not, it would
. be better for another Bench to hear this case, will emerge from
the ·conclusions, we will draw, in' the course of the present
determination. ·

12. What is it that this Court had done through its order
C dated 31.8.2012 while upholding the earlier orders passed by
the SEBI (FTM) (dated 23.6.2011) and the SAT (dated
18.10.2011 )? We had merely confirmed the directions earlier
issued to the two companies, to refund the moneys collected
by them from investors, who had subscribed to their OFCD's,
D by the SEBI (FTM) and by the SAT. The directions did not
extend to funds contributed by the promoters, the directors or
the other stakeholders. The refund did not include any business
gains earned by the two companies during the subsistence of
their enterprise. According to the stance adopted by the two
E companies before this Court, all the investors' money collected
through OFCD's, had mainly been invested with the other
companies of the Sahara Group. This position was expressly
reiterated, in the two separate affidavits filed by Sahara India
Real Estate Corporation Limited (hereinafter referred to as
F 'SIRECL') and Sahara Housing Investment Corporation Limited
(hereinafter referred to as 'SHICL') dated 4.1.2012, before this
Court. It is now their case, that these properties were sold to
other Sahara Group companies to redeem the OFCD's. It is
therefore all within the companies of the Sahara Group. That
G is how, sale transactions by way of cash have been explained.
It is therefore apparent, that we had not directed a refund of
any other amount, besides that which was collected from the
investors themselves. The petitioner.herein - Mr. Subrata Roy
Sahara, during the course of his personal oral hearing informed
H us, that most of the investments were made by petty peasants,
SUBRATA ROY SAHARA v. UNION OF INDIA 599
[JAGDISH SINGH KHEHAR, J.]
labourers, cobblers, blacksmiths, woodcutters and other such A
like artisans, ranging mostly between Rs.2,000/- and Rs.3,000/
-. Almost all the investors, according to the petitioner, did not
even have a ba11k account. That was why, they had chosen to
invest the same through OFCD's, in the two companies. If the
above position was/is correct, and the refund related only to B
deposits made by these petty poor citizens of this country, why
are the two companies or the petitioner - Mr. Subrata Roy
Sahara, in his capacity as promoter, and the other concerned
directors, so agitated with our order. The findings against the
two companies have been concurrent. At all levels, where issues c
raised by the two companies were considered and agitated,
the determination has been in one voice, that the action of the
two companies was unlawful and accordingly the moneys
collected had to be refunded. There is not even a single order
at any level, in favour of the two companies. The two companies
0
were required to refund the money to its investors, because of
the absolute illegality in its collection.

13. Because both the SEBI and the SAT were doubtful
about the veracity of the receipt of the funds as alleged, they
had directed the refund to the investors by way of cash "through" E
demand draft or pay order. During the course of final hearing
of the appellate proceedings before this Court, submissions
were heard over a period. of three weeks during the summer
vacation. We entertained a similar impress_ion and suspicion.
Firstly because, the two companies never made available any F
information sought from !~em. They always stonewalled all
attempts to gather information by the SEBI, even by exerting
influence from the Ministry of Corporate Affairs, and by raising
purely technical pleas. And also because, the little bits of
information made available by the companies for evaluation, G
were found to be seriously doubtful. It is also important for us ·
to record, that the pointed position adopted by the SEBI before
this Court, during the disposal of Civil Appeal nos. 9813 and
9833 of 2011 was, that neither SIRECL, nor SHICL, ever
H
600 SUPREME COURT REPORTS · [2014] 12 S~C.R.

A provided details of its investors to the SEBI (FTM). They
contested the proceedings initiated by the SEBI (FTM), only on
technical grounds. We were told ttiat even before the SAT, no
details were furnished. The position remained the same, even
before this Court. Based on the non disclosure of information ·
B sought from the two companies, it was not possible to record
a firm finding, either ways. It is, therefore, that a different
procedure was adopted by this Court while disposing the .
appeals preferred by the two companies, vide order dated
31.8.2012. The companies were restrained from making direct
C refunds. They were directed to deposit all investor related funds
(along with interest) with the SEBI. The SEBI was in turn
directed, to make the refunds to the investors. In case the
investors could not be identified, or were found to be non-
existent or bogus, the remaining funds along with interest, were
directed to be deposited with the Government of India. This
0
seems to us, to be the reason, for all these twists and turns, in
the aftermath of this Court's order dated 31.8.2012. If the two
companies were ready and willing to pay the money, as has
been made out, on behalf of the two companies, there would
be no cause for agitation.
E
14. One of the reasons for retaining the instant petition for
hearing with ourselves was, that we had heard eminent Senior
Counsel engaged by the two companies exclusively for over
three weeks during the summer vacation of 2012. We had been
F taken through thousands of pages of pleadings. We had the
occasion to watch the demeanour arid defences adopted by the
two companies and the contemnors from time to time, from
clo~e quarters. Writing the judgment, had occupied the entire
remaining period of the summer vacation of 2012, as also,
G about two months of further time. The judgment dated
31.8.2012 runs into 269 printed pages. Both of us had rendered
separate judgments, concurring with one another, on each
aspect of the matter. During the course of writing the judgment,
we had the occasion to minutely examine numerous
H communications, exchanged between the rival parties. That too
SUBRATA ROY SAHARA v. UNION OF INDIA 601
[JAGDISH SINGH KHEHAR, J.]
had resulted in a different kind of understanding, about the A
controversy. For any other Bench to understand the nuances
of the controversy determined through our order dated
31.8.2012, would require prolonged hearing of the matter.
Months of time, just in the same manner as we had taken while
passing the order dated 31.8.2012, would have to be spent B
again. Possibly the submissions made by the learned counsel
seeking our recusal, was consciously aimed at the above
objective. Was this the reason for the theatrics, of some of the
learned Senior Counsel? Difficult to say for sure. But deep
within, don't we all understand? It was also for the sake of c
saving precious time of this Court, that we decided to bear the
brunt and the rhetoric, of some of the learned Senior Counsel
representing the petitioner. We are therefore satisfied, that it
would not be better, for another Bench to hear this case.

II. Must judicial orders be obeyed at all costs? D

Can a judicial order be disregarded, if the
person concerned feels, that the order is
wholly illegal and void?
E
15. By the time a Judge is c;;illed upon to serve on the
Bench of the Supreme Court of India, he understands his
responsibilities and duties ..... and also his powers and authority.
A Judge has the solemn duty of deciding conflicting issues
between rival parties. Rival parties inevitably claim diagonally
opposite rights. The decision has however to be rendered in
F
favour of one party (and against the other). That, however, is
not a cause for much worry, because a Judge is to decide every
dispute, in consonance with law. If one is not free to decide in
consonance with his will, but must decide in consonance with
law, the concept of a Judge being an individual possessing G
power and authority, is but a delusion. The saving grace is, that
only a few understand this reality. But what a Judge is taught
during his arduous and onerous journey to the Supreme Court
is, that his calling is ba~ed on, the faith and confidence reposed
in him to serve his country, its institutions and citizens. Each H
602 SUPREME COURT REPORTS [2014] 12 S.C.R.

A one of the above (the country, its institutions and citizens),
needs to be preserved. Each of them grows to prosper, with
the others' support. Each of them has duties, obligations and
responsibilities ..... and also rights, benefits and advantages.
Their harmonious glory, emerges from, what is commonly
B understood as, "the rule of law." The judiciary as an institution,
has extremely sacrosanct duties, obligations and
responsibilities. We shall, in the succeeding paragraphs,
attempt to express these, in a formal perspective.

C 16. The President of India is vested with executive power
of the Union. All executive actions of the Government of India,
are expressed to be taken in his name. The responsibility, and
the power, which is vested in the President of India, is to be
discharged/ exercised, in accordance with the provisions of the
Constitution of India. For that, the President of India may even
D consult the Supreme Court, on a question of law or fact of public
importance. _And when so consulted, the Supreme Court is
obliged to tender its opinion to the Pre$ident. Furthermore, the
Constitution of India contemplates, that law declared by the
Supreme Court, is binding on all courts within the territory of
E India. It also mandates, that an order made by the Supreme
Court, is enforceable throughout the territory of India. But what
is the scope of the law declared by the Supreme Court? And
what are the kinds of orders it passes? The Supreme Court
has been vested with the power to decide substantial questions
F of law, as also, to interpret the provisions of the Constitution of
India. The Supreme Court exercises jurisdiction to determine,
whether or not, laws made by. Parliament or by a State
Legislature, are consistent With the provisions of the
Constitution of India. And in case any legislation is found to be
G enacted, in violation of the provisions of the Constitution of India,
this Court is constrained to strike it down. The resultant effect
is, that a law enacted by the Parliament or by a State
Legislature, is declared .illegal or void. After a Court's verdict
has attained finality, not once, never and never, has any
H legislative body ever disobeyed or disrespected an order
SUBRATA ROY SAHARA v. UNION OF INDIA 603
[JAGDISH SINGH KHEHAR, J.] ·
passed by a court, declaring a legislation, illegal or void. The A
Supreme Court also exercises original jurisdiction, to settle
disputes between the Government of India and one or more
States; or between the Government of India and any one State
or more States on the one side, and one or more other States
on the other; or between two or more States. In such disputes, B
the order could be in favour of (or against), the Government of
India, and/or one or the other State Government(s) concerned.
Yet, the orders passed by the Supreme Court on the above
disputes, have unfailingly been accepted and complied with,
despite the seriousness of the consequences, emerging from c
such orders. The settlement of such disputes by the Supreme
Court, has not ever earned scorn, disdain, disrespect or
denigration of the parties concerned. The Supreme Court also
enforces through its writ jurisdiction, fundamental rights of the
citizens of this country. In case an individual's fundamental rights
0
(or other legal rights), are found to have been violated, the
Government of India, or the concerned State Government, or
the instrumentality/institution concerned, is directed to restore
to the individual, what is due to him. The Government (or the
instrumentality/institution) concerned, which is directed to extend
benefits denied to an individual(s), has always honourably E
obeyed and implemented Court orders, gracefully. There are
numerous institutions created to assist the executive
government, in matters of governance. Some of them are
constitutional authorities, others are creatures, either of a
legislation or of the executive. The object of executive F
governance, is to enforce duties, obligations and
responsibilities, and also, to extend rights, benefits and
advantages. Courts also exercise, the power of judicial review,
over actions of such instrumentalities/institutions. While
exercising the power of judicial review, Courts also pass orders G
and directions, to enforce legal rights. Courts are rarely
confronted with a situation where an executive department of
a government, or an instrumentality/institution, has denied
compliance. Likewise. the Supreme Court is also vested with
the responsibility to adjudicate private disputes between H
604 SUPREME COURT REPORTS f20141 12 S.C.R.

A individuals (both civil and criminal), so as to render a
determination of their individual rights. These too, are as a rule
(almost)always complied with voluntarily and gracefully.

17. There is no escape from, acceptance, or obedience,
B or compliance of an order passed by the Supreme Court, which
is the final and the highest Court, in the country. Where would
we find ourselves, if the Parliament or a State Legislature
insists, that a statutory provisioa struck down as
unconstitutional, is valid? Or, if a decision rendered by the
C Supreme Court, in exercise of its original jurisdiction, is not
accepted for compliance, by either the Government of India,
and/or one or the other State Government(s) concerned? What
if, the concerned government or instrumentality, chooses not to
give effect to a Court order, declaring the fundamental right of
a citizen? Or, a determination rendered by a Court to give effect
D to a legal right, is not acceptable for compliance? Where would
we be, if decisions on private disputes rendered between
private individuals, are not complied with? The answer though
preposterous, is not far fetched. In view of the functional position
of the Supreme Court depicted above, non-compliance of its
E orders, would dislodge the cornerstone maintaining the
equilibrium and equanimity in the country's governance. There
would be a breakdown of constitutional functioning. It would be
a mayhem of sorts.

F 18. Before we advert to the question, whether this Court
can order obedience of an order passed by it, it may be relevant
to understand, the extent and width of jurisdiction, within the
framework whereof this Court can pass orders. In this behalf
reference may be made to the nine-Judge Constitution Bench
G judgment of this Court, in Naresh Sridhar Mirajkar v. State of
Maharashtra, AIR 1967 SC 1, wherein it was held as under:-

"6.0. There is yet another aspect of this matter to which it
is necessary to refer. The High Court is a superior Court
of Record and under Article 215; shall have all powers of
H such a Court of Record including the power to punish
SUBRATA ROY SAHARA v. UNION OF INDIA 605
[JAGDISH SINGH KHEHAR, J.]
contempt of itself. One distinguishing characteristic of such A
superior Courts is that they are entitled to consider
questions of their jurisdiction raised before them. This
question fell to be considered by this Court in Special
Reference No. 1 of 1964, (1965) 1 S.C.R. 413 at p. 499.
In that case, it was urged before this Court that in granting 8
bail to Keshav Singh, the High Court had exceeded its
jurisdiction and as such, the order was a nullity. Rejecting
this argument, this Court observed that in the case of a
superior Court of Record. it is for the Court to consider
whether any matter falls within its jurisdiction or not. Unlike C
a court of limited jurisdiction. the superior court is entitled
to determine for itself questions about its own jurisdiction.
That is why this Court did not accede to the proposition
that in passing the order for interim bail, the High Court
can be said to have exceeded its jurisdiction with the result
that the order in question was null and void. In support of 0
this view, this Court cited a passage from Halsbury's Laws
of England where ii is observed that:-

"prima facie. no matter is deemed to be beyond the
jurisdiction of a superior court unless it is expressly E
shown to be so. while nothing is within the
jurisdiction of an inferior court unless it is expressly
shown on the face of the proceedings that the
particular matter is within the cognizance of the
particular Court." (Halsbury's Laws of England, Vol. F
9, p. 349).".

If the decision of a superior Court on a question of its
jurisdiction is erroneous, it can, of course, be corrected by
appeal or revision as may be permissible under the law; G
but until the adjudication by a superior Court on such a
point is set aside by adopting the appropriate course, it
would not be open to be corrected by the exercise of the
writ jurisdiction of this Court."

(emphasis is ours) H
606 SUPREME COURT REPORTS. [2014] 12 S.C:R.

A Just like High Courts, the Supreme Court is a superior
Court of Record. This mandate is expressly contained in Article
129 of the Constitution of India. Since it is not the case of th~
petitioner before this Court, that there is !>Orne legislative or
constitutional provision, curtailing the jurisdiction of this Court,
B to pass an order of the nature which is impugned through the
instant writ petition, it stands acknowledged, that the above
order has been passed by this Court, in legitimate exercise of
its jurisdiction.

19. On the subject of obedience of orders passed by this
C Court, this Court recently in K.A. Ansari v. Indian Airlines Ltd.,
(2009) 2 SCC 164, observed thus: "The respondent Indian
Airlines was obliged to obey and implement the ... direction. If
they had any doubt or if the order was not clear, it was always
open to them to approach the court for clarification of the ...
D order. Without challenging the ... direction or seeking
clarification, Indian Airlines could not circumvent the same, on
any ground whatsoever. Difficulty in implementation of an order
passed by the Court, howsoever grave its effect may be, is no
answer for its non-compliance." It is therefore that Article 142
E of the Constitution of India mandates that this Court " .. .in
exercise of its jurisdiction may pass such decree or make such
order as is necessary for doing complete justice in any cause
or matter pending before it, and any decree so passed or order
so made shall be enforceable throughout the territory of India ... "
F And it is also inter alia for the above enforcement, that Article
129 of the Constitution of India, vests in the Supreme Court the
power, amongst other things, to enforce compliance of Co11rt
· directions. The Supreme Court has the jurisdiction and power,
to punish for its contempt." It is this dispensation, which
G authorizes the Supreme Court to enforce compliance of its
orders. For, the power to punish, would serve no purpose, if
the power to enforce compliance was lacking. It was; therefore,
that this Court in Maninderjit Singh Bitta v. Union of India,
(2012) 1 sec 273, with reference to its contempt jurisdiction
H observed, thus:-
SUBRATA ROY SAHARA v.
UNION OF INDIA 607
[JAGDISH SINGH KHEHAR, J.]
"26. It is also of some relevance to note that disobedience A
of court orders by positive or active contribution or non-
obedience by a passive and dormant conduct leads to the
same result. Disobedience of orders of the court strikes
at the verv root of rule of law on which ·the judicial system
rests. The rule of law is the foundation of a democratic B
society. Judiciarv is the guardian of the rule of law. If the
Judiciary is to perform its duties and functions effectively.
and remain true to the spirit with which they are sacredly
entrusted. the dignity and authority of the courts have to be
respected and protected at all costs (.refer T.N. c
Godavarman Thirumulpad vs. Ashok Khat, (2006) 5 SCC
1). The proceedings before the highest court of the land
in a public interest litigation, attain even more significance.
These are the cases which come up for hearing before the
court on a grievance raised by the public at large or public
0
spirited persons. The State itself places matters before the
Court for determination which would fall, statutorily or
otherwise, in the domain of the executive authority.

27. It is where the State and its instrumentalities have failed
to discharge its statutory functions or have acted adversely E
to the larger public interest that the courts are called upon
to interfere in exercise of their extraordinary jwisdiction to
ensure maintenance of the rule of law. These are the cases
which have impact in rem or on larger section of the
society and not in personam simpli.::iter. Courts are called F
upon to exercise jurisdiction with twin objects in mind.
Firstly, to punish the persons who have disobeyed or not
carried out orders of the court i.e. for their past conduct.
Secondly. to pass such orders. including imprisonment
and use the contempt jurisdiction as a tool for compliance G
of its· orders in future. This principle has been applied in
the United States and Australia as well.

34.Having found them guilty under the provisions of the
1971 Act and under Article 129 of the Constitution of India,
H
608 SUPREME COURT REPORTS (2014] 12 S.C.R.

A we punish the Secretary, Transport and Commissioner,
State Road Transport Authority of the State of Haryana as
under: ·

(i) They are punished to pay a fine of Rs.2,000/-
B each. and in default, they shall be liable to undergo
simple imprisonment for a period of fifteen days.

(ii) We impose exemplary cost of Rs.50,000/- on
the State of Haryana, which amount, at the first
instance, shall be paid by the State but would be
c recovered from the salaries of the erring officers/
officials of the State in accordance with law and
such recovery proceedings be concluded within six
months. The costs would be payable to the
Supreme Court Legal Services Committee.
D
(iii) In view of the principle that the courts also
invoke contempt jurisdiction as a tool for
compliance of its orders in future. we hereby direct
the State· Government and the Respondent/
contemnor herein now to positively comply with the
E
orders and implement the scheme within eight
weeks from today."
•
(emphasis is ours)

F In this.context, the following observations made by this
Court, in Supreme Court Bar Association v. Union of India,
(1998) 4 sec 409, illustrate the point sought to be made:

"42. The contempt of court is a special jurisdiction to be
exercised sparingly and with caution, whenever an act
G adversely effects the administration of justice·or which
tends to impede its course or tends to shake public
confidence in the judicial institutions. This jurisdiction may
also be exercised when the act complained of adversely
effects the Majesty of Law or dignity of the courts. The
H
SUBRATA ROY SAHARA v. UNION OF INDIA 609
[JAGDISH SINGH KHEHAR, J.]
purpose of contempt jurisdiction is to uphold the majesty A
and dignity of the Courts of law. It is an unusual type of
. jurisdiction combining "the jury, Mle judge and the
hangman" and it is so because the court is not adjudicating
upon any claim between litigating parties. This jurisdiction
is not exercised to protect the dignity of an individual judge B
"but to· protect the administration of justice from being
·maligned. In the general interest of the community it is
imperative that the authority of courts should not be
imperiled and there should be no unjustifiable interference
in the administration of justice. It is a matter between the c
court and the contemner and third parties cannot intervene.
It is exercised in a summary manner in aid of the
administration of justice. the majesty of law and the dignity
of the courts. No such act can be permitted which may
have the tendency to shake the public confidence in the 0
fairness and impartiality of the administration of justice."

(emphasis is ours}

We are satisfied to hold, that the provisions referred to by
us in the order dated 4.3.2014 (Articles 129 and 142 of the E
Constitution of India} vest in the Supreme Court, the power to
persuade, and if necessary, compel obedience and
observance, of judicial orders. It is not possible, to view this
matter in any other perspective, in the background of the
conclusion recorded by us hereinabove, namely, non- F
compliance of the orders of the Supreme Court, would dislodge
the cornerstone maintaining the equilibrium and equanimity, in
the governance of this country. This has been the manner of
understanding, of the power of this Court. In case there has
been any ambiguity, let it now be understood, that this Court G
has the unlimited power (in fact, the sac.red obligation), to
compel obedience and observance of its orders.

Ill. Facts reflecting the demeanour of the two
companies, the pe_titioner, and other directors
H
610 SUPREME COURT REPORTS [2014] 12 S.C.R.

A of SIRECL and SHICL, in the process of
litigation, leading upto the passing of the order
dated 3.1.8.2012.

20. During our entire careers as Advocates practicing
8 before the High Court and before this Court, and as Judges of
different High Courts, as Chief Justices of High -Courts in
different States, and alsq, as Judges of this Court, we have.yet
to experience a demeanour of defiance, similar to the one
adopted by SIRECL or SHICL or their promoter and directors.
The responsibility of the above defiance, which constituted a
C rebellious behaviour, challenging the authority of the SEBl, from
investigating into the affairs of the two companies, required
brazenness, flowing from unfathomable power and authority. It
is therefore essential to recapitulate, the demeanour adopted
by the two companies, before the SEBI (FTM), which position
D remained unaltered, before the SAT. These need to be
highlighted, to fully understand how a litigant can behave, to
defeat the cause of justice. The responsibility for the above ·
demeanour, would essentially fall, on the shoulders of the
promoter, and the directors, of the two companies. As a matter
E of fact, Mr. Subrata Roy Sahara (the petitioner before this
Court); Ms. Vandana Bhargava (the director exempted from
arrest, in the impugned order dated 4.3.2014), Mr. Ravi
Shankar Dubey and Mr. Ashok Roy Choudhary (the directors,
whose arrest and detention was ordered by this Court, along
F with that of the petitioner, on 4.3.2014) were expressly named
by the SEBI, and prohibitory orders were passed by the SEBI
(FTM), against the afore-stated promoter and directors,
expressly restraining them from carrying out various activities
connected with the two companies. It is also essential, to refer
G to the disposition of the two companies (under reference), in
the proceedings initiated by them, before the High Court of
Judicature at Allahabad, Lucknow Bench (hereinafter referred
to as, 'the High Court'). The above referred disposition, led to
passing of sirictures, and the vacation of an interim order
H passed by the High Court, in their favour. That too, would show
SUBRATA ROY SAHARA v. UNION OF INDIA 611
[JAGDISH SINGH KHEHAR, J.]
their spirit of defiance. The impressions gathered by this Court, A
when the two companies appeared before this Court in Civil
Appeal Nos. 9813 and 9833 of 2011, are also signifi~nt. Thus,
the above details are being set out briefly? herein below.

. 21. A complaint was addressed by ~Professional Group
8
for Investors Protection" on 25.12.2009, alleging violation of the
provisions of the Securities and Exchange Board of India Act,
1992 (hereinafter referred to as, 'the SEBI Act'), against the
companies under reference. On similar lines, another complaint
was addressed to the SEBI by one "Roshan Lal" on 04.01.2010.
In order to probe the authenticity of the allegations leveled in C
the complaints, the SEBI sought information from Enam
Securities Private Limited - a merchant banker. In its response
dated 21.2.2010, Enam Securities Private Limited asserted,
that the OFCDs issued by SIRECL and SHICL, had been
issued in conformity with all applicable laws. In sum and D
substance, the above merchant banker did not tender any reply,
which could have been of help, to determine the authenticity of
the allegations leveled in the complaints.

22. All the same, the SEBI again sought further details E
from Enam Securities Private Limited. The particulars· of the
information sought are being extracted herein below:

~ "a. details regarding the filing of RHP of the said.
companies with the concerned RoC ...
F
b. date of opening and closing of the subscription list.

c. details regarding the number of application forms
circulated after the filing of the RHP with RoC.

d. details regarding the number of applications G
received.

e. the number of allottees

f. list of allottees. H
612 SUPREME COURT REPORTS [2014] 12 S.C,R.

A g. the date of allotment.

h. date of dispatch of debenture certificates etc.
'
i. copies of application forms, RHP, pamphlets and
other promotional material circulated."
B
Enam Securities Private Limited, however, did not furnish
the information sought.

23. The SEBI then directly sought the desired information
C from SIRECL and SHICL, through two separate letters dated
12.05.2010. Instead of furnishing the details of the information
sought, the companies under reference, required the SEBI to
furnish them the complaints, which had prompted it to seek the
information.

D 24. The SEBI again addressed separate communications
to the two companies, dated 21.5.2010, seeking the same
information. Both companies adopted the same posture, yet
again. This time, however, SIRECL, as well as, SHICL pointed
out to the SEBI, that it had no jurisdiction to inquire into the
E affairs of th.e two companies, under the provisions of the SEBI
Act.

25. The SEBI repeated its request to the two companies,
for the required information, through two separate
F communications, dated 11.06.2010. On this occasion, the two
companies addressed separate letters dated 16.06.2010 to the
SEBI, informing it, that they had received a communication from
the office of the Union Minister of State for Corporate Affairs,
to the effect, that the jurisdictional issue raised by the two
G companies, was under the consideration of the Ministry of
Corporate Affairs. Accordingly, the two companies informed the
SEBI, that they would furnish the information sought, only upon
the Ministry's conclusion, that the SEBI had the jurisdiction in
the matter.

H 26. In view of the posture adopted by the two companies,
SUBRATA ROY SAHARA v. UNION OF INDIA 613
[JAGDISH SINGH KHEHAR, J.)
summons dated 30.8.2010 and 23.9.2010, were issued under A
Section 11 C of the SEBI Act to them, .to provide the following
information:

"1. Details regarding filing of prospectus/Red-herring
Prospectus with ROC for issuance of OFCDs.
B
2. Copies of the application forms, Red-Herring
Prospectus, Pamphlets, advertisements and other
promotional materials circulated for issuance of
OFCDs.
c
3. Details regarding number of application forms
circulated, inviting subscription for OFCDs.

4. Details regarding number of applications and
subscription amount received for OFCDs.
D
5. Date of opening and closing of the subscription list
for the said OFCDs.

6. Number and list of allottees for the said OFCDs and
the number of OFCDs allotted and value of such E
allotment against each allottee's name;

7. Date of allotment of OFCDs;

8. Copies of the minutes of Board/committee meeting
in which the resolution has been passed for F
allotment;

9 Copy of Form 2 (along with annexures) filed with
ROC, if any, regarding issuance of OFCDs or
equity shares arising out of conversion of such
G
OF CDs.

10 .. Copies of the Annual Reports filed with Registrar
of Companies for the immediately preceding two
financial years.
H
..

'
614 SUPREME COURT REPORTS [2014) 12 S.C.R.

A 11. Date of dispatch of debenture certificate etc."

The aforesaid summons were responded to by the
companies, through two separate communications dated
13.09.2010, wherein the companies again adopted the stance,
B that the SEBI had no jurisdiction in the matter, and further, that
the matter of jurisdiction was being examined by the Ministry
of Corporate Affairs. Based on the above response, the
companies required the SEBI to withdraw the above summons
(dated 30.8.2010 and 23.9.2010).

C 27. On 30.09.2010, through separate letters issued by
SIRECL and SHICL, the companies adopted the stance, that
they did not have the complete information sought by the SEBI.
This was indeed a shocking disclosure, by two statutory entities,
holding thousands of crores of rupees of investment funds,
D deposited by crores of investors. Such like absurdities, were
routine defences, adopted by the two companies.

28. The Chief Financial Officer of the Sahara India Group
of Companies sought an opportunity of personal hearing. The
SEBI (FTM) afforded the above sought opportunity of hearing,
E on 03.11.2010. During the course of hearing, it was impressed
upon the· Chief Financial Officer, that he should furnish
information solicited by the SEBI (through the aforesaid
summons, dated 30.8.2010 and 23.9.2010), fully and
accurately, without any delay, Despite the above, neither of the
F two companies, 'furnished the information sought.

29. On its own, the SEBI obtained a part of the information,
from the MCA-21 portal maintained by the Ministry of Corporate
Affairs. This information had been furnished by SIRECL, to the
G Registrar of Companies, Uttar Pradesh and Uttarakhand; and
by SHICL, to the Registrar of Companies, Maharashtra. By an
order dated 24.11.2010, the SEBI (FTM) drew the following
inferences/conclusions:

"Firstly, neither SIRECL nor SHICL had denied their having
H
SUBRATA ROY SAHARA v. UNION OF INDIA 615
[JAGDISH SINGH KHEHAR, J.]
issued OFCDs. Secondly, SIRECL as also SHICL A
acknowledged having filed RHPs in respect of the OF CDs
issued by them with the concerned Registrar of
Companies. Thirdly, besides the dates of filing the RHPs
with the respective Registrar of Companies, neither of the
companies hactfumished any other information/document B
sought from the companies by SEBI. Fourthly, the
companies had adopted a stance, that they did not have
complete details relating to the securities issued by them.
This stance adopted by the two companies, according to
the SEBI, was preposterous. Fifthly, SEBI had sought C
details of the number of application forms circulated, the
number of application forms received, the amount of
subscription deposited, the number and list of allottees, the
number of OF CDs allotted, the value of allotment, the date
of allotment, the date of dispatch of debenture certificates, ·
0
copies of board/committee meetings, minutes of meetings
during which the said allotment was approved. According
to SEBI, since the information sought was merely basic,
the denial of the same by the companies amounted to a
calculated and deliberate denial of information. Sixthly,
information sought by the SEBI depicted at serial number E
fifthly hereinabove, was solicited to determine the
authenticity of the assertion made by the companies, that
the OF CDs had been issued by way of private placement.
Whereas, it was believed by the SEBI that the companies
had issued the OFCDs to the public. Seventhly, since the F
companies had adopted the position, that the OFCDs
were issued by way of private placement to friends,
associate group companies, workers/employees and other
individuals who were associated/affiliated/connected to the
Sahara Group of Companies, according to SEBI it was G
highly improbable, that the details and particulars of such
friends, associate group companies, workers/employees
. and other individuals which were associated/affiliated/
connected to the Sahara India Group of companies, was
not available with them (for being passed over to SE~I)." H
616 SUPREME COURT REPORTS [2014] 12 S.C.R,

A wherein the following summary of inferences was
recorded:

"i. The issue of OFCDs by the companies have been
made to a base of investors that are fifty or more
B in number.

ii. The companies themselves tacitly admit the same
as they have no case that funds have been
mobilized from a group smaller than fifty,

c iii. A resolution under section 81 (1A} of the Act does
noftake away the 'public' nature of the issue.

iv. The filing of a prospectus under the Act signifies the
intention of the issuer to raise funds from the public.

D Therefore, for the aforesaid reasons, the submission of the
companies that their OFCD issues are made on private
placement and do not fall under the definition of a public
issue, is riot tenable. The instances discussed above
would prima facie suggest that the offer of OFCDs made
E by the companies is "public" in nature ."

30. Based on the DIP Guidelines and the ICDR
Regulations, the SEBI (FTM) found, that the two companies
had committed, the following violations:
F a) failure to file the draft offer document with SEBI;

b) failure to mention the risk factors and provide the
·adequate disclosures that is stipulated, to enable
the investors to take a well-informed decision.
G
c) denied the exit opportunity to the investors.

d) failure to lock-in the minimum promoters
contribution.

H e) failure to grade their issue.
SUBRATA ROY SAHARA v. UNION OF INDIA 617
[JAGDISH SINGH KHEHAR, J.]
f) failure to open and close the issue within the A
stipulated time limit.

g) failure to obtain the credit rating from the
recognized credit rating agency for their
instruments. ·s
h) . failure to appoint a debenture trustee

i) failure to create a charge on the assets of the
company.

j) failure to create debenture redemption reserve,
c
etc."

Based on the above conclusions, the SEBI {FTM) issued
directions by way of an ad interim ex parte order, restraining
SlRECL and SHICL from mobilizing funds under their D
respective RHPs, dated 13.03.2008 and 06.10.2009. The
companies were also directed, not to offer their equity shares/
OFCDs or any other securities, to the public and/or invite
subscription in any manner whatsoever, either directly or
indirectly, till further directions. The SEBl's ad interim ex parte E
order dated 24.11.2010 expressly referred to Mr. Subrata Roy
Sahara, Ms. Vandana Bhargava, Mr. Ravi Shankar Dubey and
Mr. Ashok Roy Choudhary. They were named as promoter and
directors, in the RHPs filed by the two companies, before the
respective Registrar of Companies. The above named . F
promoter and directors, were expressly prohibited from issuing
prospectus, or any other offer document, or issuing
advertisement for soliciting money, from the public for the issue
of securities, in any manner whatsoever, either directly or
indirectly, till further orders. G

31. The SEBl's order dated 24.11.2010 was challenged
before the High Court through Writ Petition No.11702 {M/B) of
2010 on 29.11.2010. On 13.12.2010, the High Court stayed the
operation of the order dated 24.11.2010. On an application filed
H
618 SUPREME COURT REPORTS ·[2014] 12 S.C.R.

A by the SEBI, the High Court vacated its interim order. While
vacating.the interim order, the High Court observed, inter alia:

"4...... The petitioners were supposed to cooperate in the
inquirv and their interest was protected by restraining the
B SEBI from passing any final orders. The matter was being
heard finally under the expectation that the assurances
·given by the learned counsel .for the petitioners would be
honoured by the petitioners and the matter would be
finished at the earliest. But the petitioners.appear to have
thought otherwise. The court's order cannot be allowed to
c be violated or circumvented by any means.

We, therefore, do not find any ground to continue with the
interim order, which is hereby vacated for the own conduct
of the petitioners and for which they have to thank their
D own stars."

{emphasis is ours)

It is, therefore, apparent that the High Court had denied
relief to the companies because of their non-cooperative
E attitude in the inquiry being conducted by the SEBI. It was also
sought to be concluded against the two companies, that they
had not honoured the commitments given to the Court. Anc!
further that, they were guilty of violating and circumventing
Court's orders. The order passed by the High Court, is yet
F another instance of the defiance of the two companies, in
allowing their affairs to be investigated.

32. The SEBI issued yet another show cause notice dated
20.5.2011, to the two companies, principally on the same facts
G and grounds, as the earlier show cause noti.ce dated
24.11.2010. The above notices were contested by both the
companies, again on legal technicalities. Importantly, the
companies yet again, did not furnish any factual details to the
SEBI. The defiance continued.
H
SUBRATA ROY SAHARA v. UNION OF INDIA 619
[JAGDISH SINGH KHEHAR, J.]
33. On 23.6.2011, the SEBl(FTM), passed the following A
directions:-

"1. The two Companies, Sahara Commodity Services
Corporation Limited (earlier known as Sahara India Real
Estate Corporation Limited} and Sahara Housing
Investment Corporation Limited and its promoter, Mr. B
Subrata Roy Sahara, and the directors of the said
companies, namely, Ms. Vandana Bhargava, Mr. Ravi
Shankar Dubey and Mr. Ashok Roy Choudhary, jointly and
severally, shall forthwith refund the money collected by the
aforesaid companies through the Red Herring Prospectus C
dated March 13, 2008 and October 6, 2009, issued
respectively, to the subscribers of such Optionally Fully
Convertible Debentures with interest of 15% per annum
from the date of receipt of money till the date of such
repayment. D

2. Such repayment shall be effected only in cash through
Demand Draft or Pay Order.

3. Sahara Commodity Services Corporation Limited
(earlier known as Sahara India Real Estate Corporation E
Limited) and Sahara Housing Investment Corporation
Limited shall issue public notice, in all editions of two
National Dailies (one English and one Hindi) with wide
circulation, detailing the modalities for refund, including
details on contact persons including names, addresses F
and contact details, within fifteen days of this Order coming
into effect.

4. Sahara Commodity Services Corporation Limited
(earlier known as Sahara India Real Estate Corporation G
limited) and Sahara Housing Investment Corporation
Limited are restrained from accessing the securities
market for raising funds, till the time the aforesaid payments
are made to the satisfaction of the Securities and
Exchange Board of India.
H
620 SUPREME COURT REPORTS (2014] 12 S.C.R.

A 5. Further, Mr. Subrata Roy Sahara, Ms. Vandana
Bhargava, Mr. Ravi Shankar Dubey and Mr. Ashok Roy
Choudhary are restrained from associating themselves,
with any listed· public .company and any public company
which intends to raise money from the public, till such time
B the aforesaid payments are made to the satisfaction of the
Securities and Exchange Beard of India."

(emphasis is ours)

. 34. The order of the SEBI (FTM) came to be assailed by
C the two companies, before the SAT. Even during the course
of appellate proceedings, the companies did not disclose, the
factual position. The companies, continued to contest the claim
of the responde.nts, by relying on technicalities of law, i.e., on
the same legal parameters, as had been adopted by them
o before the SEBI (FTM)~ The SAT by its order dated 18.10.2011
upheld the order passed by the SEBI (FTM) dated 23.6.2011.
The SAT directed the appellant companies to refund the entire
money collected from the investors, within six months (from the
date of its order dated 18.10.2011 ).
E 35. Thereupon the matter was brought to this Court by way
of appeals preferred by the two companies concerned, i.e.,
Civil Appeal nos. 9813 and 9833 of 2011. On 28.11.2011, this
Court passed the following interim order:-

F "By the impugned orde·r, the appellants have been asked
by SAT to refund a sum of Rs.17,400 crores approximately
on or before 28.11.2011. We extend the period upto
9.1.2012."

G It is, therefore, that this Court while issuing the interim ·
directions, merely permitted the two companies concerned to
refund a sum of Rs.17,400 crores (approximately) as directed
by the SEBI {FTM) and SAT, upto 9.1.2012. It.is, however,
imperative to understand, that this Court while passing the
above interim order, did not vary the manner. of making refunds,
H
SUBRATA ROY SAHARA v. UNION OF INDIA 621
[JAGDISH SINGH KHEHAR, J.]
in case the two companies concerned decided to make any A
refund to the investors. In this behalf it needs to be noticed, that
in its order dated 23.6.2011, the SEBI (FTM) had clearly
directed, that such repayment could only be made in cash
through demand draft or pay order. No liberty was granted to
the two companies, to convert the investment made by the B
holders of the OFCD's, ihto similar investments, with the other
companies. In other words, cash conversion in any other format,
was not permitted. To comply with the letter and spirit of the
above orders, therefore, even if refund was to be made by the
investors, it could have been done, only by way of demand c
drafts or pay orders, and not, by way of cash. The alleged cash
payment made by the two .companies, while redeeming the
OFCD's, was therefore per se illegal, and in violation of the
orders, dated 23.6.2011 (passed by the SEBI (FTM)) and
18.10.2011 (passed by the SAT) ..we must, therefore 0
emphatically point out, that the very submission now made by
the companies, that the investors were refunded their deposits
by way of cash, is per se another tactic in the series of
manoeuvres adopted by the two companies, to defeat the
process of law. Factually, there is no acceptable proof of such E
refund. This aspect is being dealt with separately, hereafter.

36. During the course of adjudication of Civil Appeal
No.9813 of 2011 (along with Civil Appeal No.9833 of 2011 ),
the issues were canvassed at the behest of the appellants, as
is apparent from the order passed by this Court on 31.8.2012, F
on the same legal issues, which were canvassed on behalf of
the companies under reference before the SEBI (FTM) and the
SAT. In the adjudication rendered by this Court, it was
concluded that the material sought by the SEBI from the
companies, though available with them, must be deemed to G
have been consciously withheld. Since the companies willfully
avoided to furnish the information to the SEBI, it was felt that
an adverse inference should be drawn against the two
companies. Having examined the factual details available on
the record, this Court also expressed an impression that the H
622 SUPREME COURT REPORTS [2014] 12 S.C.R.

A material made available by the companies " ... was totally
unreaiistic and could well be fictitious, concocted and made
up ... •. While disposing of the appeals, filed by the two
companies, this Court was· not certain whether all the
subscribers were genuine, and therefore, while concluding the
B matter, this Court in its order dated 31.08.2012; expressed the
hope that all the subscribers were genuine. And so also, the
subscription amount, as there was indeed a needle of suspicion
on this subject as well. Accordingly this Court, in its order dated
31.8.2012 observed, that " ... whole affair being doubtful,
c dubious and questionable ... ". These observ;:itions were
recorded, because the actions of the appellants made the
genuineness of the affairs of the two companies, questionable.

37. It is also important for us to record that the positive
position adopted by the SEBI before this Court, during the
D disposal of Civil Appeal Nos.9813 and.9833 of 2011 was, that
neither SIRECL nor SHICL ever provided details of its investors
to the SEBI (FTM) or to the SAT. The two companies had,
contested the proceedings initiated against them, only on
technical grounds. We may record, that we were told, that even
E before the SAT, no details were furnished. As against the
above, the position adopted by the SIRECL before us, during
the course of the appellate proceedings was, that SIRECL had
furnished a compact disc to ,the SEBI (FTM), along with its
operating key. The compact disc, according to learned counsel,
F had complete investor related data, pertaining to SIRECL.
Whilst it was acknowledged by the SEBI before this Court, that
a compact disc (allegedly containing details about the
investors) was furnished by SIRECL, yet it was emphatically
pointed out, that its operating key was withheld. This was
G another deliberate manoeuvre adopted, to withhold investor
related information from the SEBl(FTM). Resultantly, no details
whatsoever were ever disclosed by SIRECL either before the
SEBI (FTM) or the SAT.

38. The position adopted by SHICL was even worse. It is
H
SUBRATA ROY SAHARA v. UNION OF INDIA 623
[JAGDISH SINGH KHEHAR, J.]
necessary to place on record the fact, that the SHICL, one of A
the two concerned companies, never ever disclosed the names
and other connected details of its investors _to the SEBI. We
made a repeated poser, during open hearing (in the present.
writ petition), about SHICL having never furnished its investor
details. The above position was confirmed by learned counsel B
representing the SEBI. Unfortunately, Mr. S. Ganesh, learned
Senior Counsel for the petitioner, on the last day of hearing,
ventured to contest the above position. He handed over to us
two volumes of papers running into 260 pages under the title -
Note on information provided by SHICL to the SEBI). We c
required him to invite our attention to documents indicating
disclosure of the above information. His subterfuge stood
exposed, when no material depicting disclosure of names and
other connected details by SHICL to the SEBI emerged from
the two volumes of papers, handed over to us. What is essential
0
to record is, that till date SHICL has never ever supplied investor
related details to the SEBI. A fact about which there is now no
ambiguity (specially after, learned counsel, filed the
aforementioned two volumes of papers). Does it lie in the mouth
of learned counsel to assert; that unjustified conclusions have
been recorded, in the impugned order dated 4.3.2014 against E
the two companies without any basis? We are fully satisfied,
_ that the factual position depicted hereinabove, fully justifies our
mentioning in the impugned or-der (dated 4.3.2014), that the
contemnors had maintained an unreasonable stand throughout
the proceedings before the SEBI, SAT, High Court, and even F
before this Court.

39. According to the assertions made by SIRECL, it had
collected an amount of Rs.19,400,86,64,200 through its open
ended schemes between 25.4.2008 and 13.4.2011. Its G
collections, after. taking into consideration redemptions, statecjly
stood at Rs.17,565,53,22,500 as on 31.8.2011. The above
collection was allegedly made from 2,21,07,271 investors. It is
not possible for us to narrate similar figures in respect of the
amount collected by SHICL, or for that matter, the number of H
624 SUPREME COURT REPORTS . [2014] 12 S.C.R.

A investors, because the records depicting the above details have
never been disclosed by SHICL. The figures mentioned in the
order dated 31.8.2012, are therefore, the figures provided by
SIRECL and SHICL. All those figures are unauthenticated. In
sum and substance, nothing was known. All assertions made
B by the two companies were subject to verification. The above
factual position indicates the basis and the rationale, of the
directions issued by this Court on 31.8.2012. We had simply
required the two companies, to deposit the admitted investor
funds. We had directed disbursement, only on verification. The
c factual position depicted above also inter alia depicts, that the
petitioner - Mr. Subrata Roy Sahara as promoter, and Mr.
Ashok Roy Choudhary and Mr. Ravi Shankar Dubey, as
directors, were always treated as actively involved in the .matter,
and therefore, various orders (including restraint orders) were
passed, wherein they were expressly named. Since they.
0
shouldered the overall respon~ibility of the affairs of the two
companies, it was fully justified for this Court, to require them
to comply with the orders passed by this Court on 31.8.2012
and. 5.12.2012. ·

E IV. Efforts made by this Court, to cajole the
contemnors, including the petitioner.- Mr.
Subrata Roy Sahara, for compliance of the
orders of this Court, dated 31.8.2012 and
5.12.2012
F
40. During the course of hearing of the instant writ petition,
we were given to understand, that all counsel representing the
petitioner were taken by surprise when we passed the order
dated 4.3.2014 (extracted at the beginning of this order). It was
G submitted, that a person of the eminence of the petitioner, could
not be suddenly sent to jail without notice. It was asserted, that
the petitioner had entered appearance to assist this Court, and
to explain his position, but no opportunity was granted to him.
Some of the learned counsel representing the petitioner
accordingly described the impugned order dated 4.3.2014 as
H
SUBRATA ROY SAHARA v. UNION OF INDIA 625
[JAGDISH SINGH KHEHAR, J.]
a "draconian order". Because, according to them, the said A
impugned order, had violated the petitioner's rights under
Article 21 of the Constitution of India. And also because, it was
issued without affording the petitioner an opportunity of showing
cause.
B
41. The bona fides of the above submission, are difficult
to fathom. It seems to us, that rather than the petitioner tendering
his explanation to this Court, for not complying with the orders
passed by it, the petitioner's counsel were posing a question
to this Court to explain to them, the legitimacy of the procedure C
adopted by the Court. In our understanding, learned counsel
who represented the petitioner, were surely insincere to the
cause of justice, when they drummed their assertions, without
blinking an eye; since they were aware, that the factual position
was otherwise. For learned counsel for the petitioner, to
advance such submissions, to state the least, was D
unimaginable. Both Mr. Ram Jethmalani and Dr. Rajeev
Dhawan, were lead counsel representing the contemnors in the
contempt proceedings. They surely ought to have known better,
because they had appeared in the contempt proceedings, in
the defence of the contemnors. It is not for a Court, to tender E
any explanation to any litigant, or to his counsel. Accordingly, it
should never be considered as obligatory, on the !)art of this
Court, to tender any such explanation. Undoubtedly, it is open
to a party to seek review, of an order passed by this Court,
under Article 137 of the Constitution of India. Or to file a curative F
petition, after a review petition had been rejected, as laid down
by this Court in Rupa Ashok Hurra's case (supra), if. it is felt
that a serious mistake had been committed. Just for this case,
in order to depict the position in its correct perspective, we shall
narrate in the succeeding paragraphs, the long rope which was G
extended to the petitioner (as also, to the other contemnors) to
comply with the directions issued by this Court (on 31.8.2012
and 5.12.2012), before the order dated 4.3.2014 was passed.

42. Ever since the disposal of Civil Appeal nos. 9813 and H
626 SUPREME COURT REPORTS [2014] 12 S.C.R.

A 9833 of 2011, on the issue of compliance (as also, the alleged
non-compliance}, one or the other proceeding was listed for
hearing, for no less than the following 35 dates, before the order
dated 4.3.2014 was passed:-

"11.9.2012, 28.9.2012, 19.102012, 19.11.2012, 8.1.2013,
B
6.2.2013, 8.2.2013, 19.2.2013, 25.2.2013, 4.4.2013,
22.4.2013, 2.5.2013, 8.5.2013, 17.7.2013, 24.7.2013,
30.7.2013, 6.8.2013, 13.8.2013, 26.8.2013, 2.9.2013,
16.9.2013, 4.10.2013, 28.10.2013, 31.10.2013,
1.11.2013, 20.11.2013, 21.11.2013, 11.12.2013,
c 17.12.2013, 2.1.2014, 9.1.2014, 28.1.2014, 11.2.2014,
20.2.2014 and 26.2.2014"

In recording the dates of hearirig, we have not taken into
consideration the dates of hearing in Civil Appeal no. 8643 of
D 2012 (and Writ Petition (Civil} no. 527 of 2012), during the
proceedings whereof a three-Judge Bench of. this Court,
passed the order dated 5.12.2012. Surely, during the 35 dates
of hearing, whereafter the order dated 4.3.2014 was passed,
the petitioner must have been able to understand, what was
E going on. For the proceedings were not smooth and favourable
for the petitioner. A number of earlier orders, affected the
petitioner's rights adversely. It is therefore, that we have
recorded hereinabove, that the stand canvassed by learned
counsel was unimaginable. We may therefore first record the ,
F happenings, after we passed the order dated 31.8.2012.

43. On 6.2.2013, this Court issued notices in Contempt
Petition (Civil} nos. 412 and 413 of 2012. Personal appearance
of ·the contemnors (which included the petitioner} was
dispensed with. The SEBI was also directed to file a status
G report. _The receipt of the above notices, shpuld have been the
first information to the petitioner, of this Court's concern, about
the non-compliam:;e of the order dated 31.8.2012. The petitioner
came to be represented in the contempt proceedings through
counsel, on 4.4.2013. Learned counsel for the petitioner, have
H however been making their submissions as if, the petitioner had
SUBRATA ROY SAHARA v. UNION OF INDIA 627
[JAGDISH SINGH KHEHAR, J.]
entered appearance only on 4.3.2014, when the impugned A
order was passed. Therewere actually 25 dates of hearing after
the petitioner had been represented in the contempt
proceedings, and before the impugned order was passed (on
4.3.2014).
B
44. We were shocked, when we were informed that
extension .of time to comply with this Court's orders dated
31.8.2012 and 5.12.2012 was, in the first instance, sought by
the two companies, from the SEBI. When the SEBI declined,
the concerned parties approached the SAT by preferring C
Appeal nos. 42 of 2013 (Subrata Roy Sahara v. SEBI), 48 of
2013 (SHICL v. SEBI), 49 of 2913 (SIRECL v. SEBI) and 50
of 2013 (Ashok Roy Chaudhary v. SEBI). For just the same
purpose, Writ Petition no. 2088 of 2013, was filed before the
High Court. We are at a loss to understand, how relaxation of
an order passed by this Court, could have been sought either D ,
from the SEBI or the SAT, or for that matter, even from the High
Court. How this abuse of process, was handled by us, stands
recorded in a subsequent paragraph.

45. The SEBI filed Interlocutory Application nos. 72 arid 73 E
of 2013. Notice in the above applications was issued for
8.5.2013. The above Interlocutory Applications pertained to
proceedings initiated by the contemnors before the SAT and
the High Court. The said proceedings were initiated by the
contemnors, after the SEBI had declined to extend the time F
frame, fixed by this Court through its order dated 31.8.2012.
Interestingly, the petitioner in the instant writ petition, had
initiated one such proceeding in his own name (Appeal no. 42
of 2013, Subrata Roy Sahara v. SEBI). We are of the prima
facie view, that the initiation of. the above proceedings was G
aimed at diverting the issue of implementation of our order
dated 31.8.2012. Accordingly on 17.7.2013, we directed" ...
that no High Court, Securities Appellate Tribunal and any other
Forum shall pass any order against the orders passed by the
Securities and Exchange Board of India (SEBI) in
implementation of this Court's judgment dated 31.8.2012". H
628 SUPREME COURT REPORTS (2014] 12 S.C.R.

A 46. On 24.7.2013, this Court issued notice, in Contempt
Petition (Civil) no. 260 of 2013 on account of non-compliance
of the orders passed by this Court on 5.12.2012. The order
dated 5.12.2012 (passed in Civil Appeal no. 8643 of.2012 and
Writ Petition (Civil) no. 527 of 2012) is being extracted
B hereunder:-

"This appeal is directed agai.nst the judgment and order
dated 29th November, 2012, passed by the Securities
Appellate Tribunal, in Appeal No.221 of 2012, holding that
the same was premature and was not, therefore,
c maintainable I

2. In earlier appeals, being C.A.No.9813 of 2011 and
C.A.No.9833 of 2011, this Court was concerned with the
powers of the Securities and Exchange Board of India
D (SEBI) under Section 55A(b) of the Companies Act, 1956,
to administer various provisions relating to issue and
transfer of securities to the public by listed companies or
companies· which intend to get their securities listed on any
recognized Stock Exchange in India and also the question
E whether Optionally Fully Convertible Debentures, offered
by the appellants, should have been listed on any
recognized Stock Exchange in India, being Public Issue
under Section 73 read with Section 60B and allied
provisions of the Companies f.ct. The said appeals were
F heard and finally disposed of on 31.st August, 2012, with
the following directions:-

"1. 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
G date of receipt of the subscription amount till the.date of
repayment, within a period of three months from today,
which. shall be deposited in a Nationalized Bank bearing
maximum rate of interest.

H 2. Saharas are also directed to furnish the det.ails with
SUBRATA ROY SAHARA v. UNION OF INDIA 629
[JAGDISH SINGH KHEHAR, J.)
supporting d.ocuments to establish whether they had A
refunded any amount to the persons who had subscribed
through RHPs dated 13.3.2008 and 16.10.2009 within a
period of 1O (ten) days from the pronouncement of this
order and it is for the SEBI (WTM) to examine the
correctness of the details furnished. B

.3. 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 C
who had invested money through RHPs dated 13.3.2008
and 16.10.2009:

4. Saharas are directed to ·furnish all documents in their
custody, particularly, the application forms submittecl by
subsc.ribers, the approval and allotment of bonds and all D
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 1O (ten) days from the date
of pronouncement of this order.
E
5. 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.
F
6. SEBI (WTM) shall take steps with the aid and
assistance of Investigating Authorities/Experts in Finance
and Accounts and other supporting staff to examine t~e
. documents produced by Saharas so as to ascertain their
genuineness and after having ascertained the same, they G
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. H
630 SUPREME COURT REPORTS [2014] 12 S.C.R.

A 7. SEBI {WTM), in the event of finding thatthe 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
B subscribers to establish their claims. Th_e decision of SEBI
(WTM) in this behalf will be final and binding on Saharas
as well as the subscribers.

8. SEBI (WTM) if, after the verification of the details
furnished, is u·nable to find out the whereabouts of all or
c any of the subscribers; then the amount collected from such
subscribers will be appropriated to the Government of
India. - ·

9.. We also appoint Mr. Justice B.N. Agrawal, a retired
D 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
E proper implementation of t~e 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
F by Justice B.N. Agrawal, which shall be borne by SEBI and _
recoverable from Saharas. 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. _
G
10. We also make 1! clear that if Saharas fail to comply
with these directions and do not effect refund of money as
directed, SEBI can take recourse fo all legal remedies,
including attachment and sale of properties, freezing of
H bank accounts etc. for realizations of the amounts.
SUBRATA ROY SAHARA V. UNION OF. INDIA 631
[JAGDISH SINGH KHEHAR, J.]
11. We also direct SEBl(WTM) to submit a status report, A
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. The appeals were, therefore, dismissed with
the aforesaid directions. B

3. As indicated above, the present appeal is directed
against the order of the Securities Appellate Tribunal, in the
Appeal, being No.221 of 2012, which had been filed on 27th
November, 2012, complaining that the SEBI had not accepted C
the documents, which were to be furnished to it by the
appellants, since they were tendered a couple of days after the
stipulated period.

4. We are not inclined to interfere with the substance of
the order of the Tribunal impugned in this appeal. The only D
question which we are inclined to consider is whether the
time forimplementing the directions contained in the earlier
order of 31st August. 2012. may be extended or not.

5. Mr. Gopal Subramanium. learned Senior Counsel, E
submitted that after the aforesaid order had been passed.
certain amounts had been paid to investors and that.
according to them a sum of' 5120/- Crores remained to
be paid to SEBI. out of the amount already indicated. for
the purpose of distribution to the investors.
F
6. Having heard learned Senior Counsel, Mr. Gopal
Subramanium, appearing for the appellants, Mr. Datar, for
SEBI and Mr. Vikas Singh, appearing for Universal
Investors Association & Ors., who has filed a separate Writ
Petition, we are not inclined to accept the submissions G
made by Mr. Gopal Subramanium. at their face value.
since, in the order of 31st August. 2012. it has been
indicated that if any payments had been made. the details
thereof. along with supporting documents. were to be
submitted to SEBI to verify the same. Essentially. the H.
632 SUPREME COURT REPORTS [2014] 12 S.C.R

A appellants have failed on both counts. since neither the
amount indicated in the order. together with interest@ 15%
per annum. accrued thereon. has been paid. nor have the
· documents been submitted within the time stipulated in the
said order. The reliefs prayed for in the writ petition filed
B by Universal Investors Association.amounts to a review of
the order passed by this Court on 31.08.2012.
'
7. We. therefore. dispose of the appeal and the writ
petition. as also the intervention applications with the
following directions:-
c
(1) The appellants shall immediately hand over the
Demand Drafts. which they have produced in Court,
to SEBI. for a total sum of ' 5120/- Crores and
deposit the balance in terms of the order of 31st
D August. 2012. namely. ' 17.400/- Crores and the
entire amount. including the amount mentioned
above. together with interest at the rate of 15 per
cent. per annum. with SEBI. in two installments. The.
first installment of 10.000/-Crores. shall be
E deposited with SEBI within the first week of
· Januarv, 2013. The remaining balance. along with
the interest. as calculated. shall be deposited within
the first week of Februarv. 2013. The time for filing
documents in support of the refunds made to any·
person. as claimed by the appellants. is extended
F
by a period of 15 days. On receipt of the said
documents. SEBI shall implement the directions
contained in the order passed on 31st August,
2012. In default of deposit of the said documents
within the stipulated period. or in the .event of default
G 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
. H .
SUBRATA ROY SAHARA v. UNION OF INDIA 633
[JAGDISH SINGH KHEHAR, J.]
attachment and sale of properties. freezing of bank A
accounts etc. for relisation of the balance dues.

8. Let a copy of this order be made available to Mr. Justice
B.N. Agrawal, who has been appointed by this Court, by
tomorrow, to enable His Lordship to oversee the working B
of the Order of 31st August, 2012, and this Order passed
by us today.

9. Having regard to the nature of the case, the appellants
shall bear the costs of the respondent(s) fn these
proceedings. C

10. In the event any excess payment is found to have been
made by the appellants by virtue of the earlier Order and
this Order, the same shall be refunded. to the appellants
by SEBI." D
(emphasis is ours)

When the above order was passed by this Court, should
the petitioner not have known, that the exercise of seeking
extension of time had come to an end, and the first installment E
of Rs.10,000 crores had to be paid "within the first.week of
January, 2013"?

4 7. Even though responses to. the contempt petitions
referred to above, had been filed, and we were hearing learned F
counsel representing the contemnors, on the subject of
contempt, we were also trying to cajole the two companies, into
an understanding that they were obliged to comply with the
orders dated 31.8.2012 and 5.12.2012. In our view,
compliance of the above orders would reduce the seriousness
of the issue. The effort on our part was always to avoid G
hardship, to any of the concerned parties. But in our above
effort, we could not compromise, the interest of the investors.
As already noticed, in the discussion recorded under the
preceding heading, the two companies never supplied any
H
634 SUPREME COURT REPORTS (2014] 12 s.c:R.

A authentic details of their·investors. Nor the details of the moneys
collected. Whatever the two companies asserted, had to be
accepted on its face value, to proceed"further. When learned
counsel for the petitioner, made a proposal to secure the
amount payable to the investors of the two companies, we were
B not averse to the proposal. We wished to explore some
intermediary· means to secure compliance. That would have
deferred adoption of harsher measures. With the above object
in mind, we accepted the proposal of the learned counsel for
the petitioner (and the other· contemnors), to furnish a list of
c unencumbered immovable properties, which would secure the
liability of the two companies (for compliance of the order dated
31.8.2012, as well as, the subsequent order dated 5.12.2012).
The list of properties furnished to this Court, could not have
been so furnished, without the petitioner's express approval.
. There can be no doubt about the aforesaid inference, because
0
·the stance now adopted by the petitioner shows, that the
petitioner is in absolute charge of all the affairs of the
companies. And nothing can move without his active
involvement. During the course of hearing of the present petition,
learned counsel hcwe repeatediy emphasized that further
E deposits will be possible, only after the petitioner is released
from judicial custody. This stance shows, that in the affairs of
the Sahara Group, Mr. Subrata Ray Sahara, is the only person
who matters. And therefore, the other individual directors, may
have hardly any say in the matter.
F
48. The lists of properties which were provided by the two
companies during the above exercise, were rejected by the
SEBI, for good reason. It is not necessary for us to record the
details herein, why the lists of properties furnished to this Court
G were found to be unacceptable. We may, hpwever, record, that
we were satisfied with the submissions advanced at the behest
of the SEBI, that the proposed properties, would not secure the
amount of the refund contemplated by the orders of this court.
It is therefore, that another attempt was made, consequent upon
H an offer made on behalf of the two companies, that other
SUBRATA. ROY SAHARA v. UNION OF INDIA 635
· [JAGDISH SINGH KHEHAR, J.]
companies within the framework of the Sahara Group, would A
also make available to the SEBI, their unencumbered
immovable properties. Is it possible for anyone to say, after the
petitioner agreed to provide the list of immovable properties,
that he was not aware of the nature of proceedings being
conducted in this Court, or their gravity? Is it possible for the B
petitioner to say, that he was not aware of the reason, why these
lists were being furnished to this Court? There can be no doubt,
that it was abundantly clear to the petitioner, that the properties
mentioned in the lists furnished, would be sold if necessary, to
comply with this Court's order dated 31.8.2012. This was c
sufficient notice to the petitioner, of the seriousness of the
situation.

49. Since efforts of this Court, to secure the investors'
interests, determined vide its order dated 31.8.2012, were
being systematically frustrated this Court in order to D
demonstrate the seriousness of the issue, directed that " ... the
alleged contemnors {respondents) shall not leave the country
without the permission of this Court... " till compliance of the
above order. The above direction was issued on 28.10.2013.
Is it open to the learned counsel for the petitioner, after the E
above restra.int order was passed, to contend that the petitioner
was not aware of the happenings in Court? He was aware that
the above restraint order was passed, during the pendency of
the contempt proceedings, which were initiated because of
non-compliance of the orders dated 31.8.2012 and 5.12.2012. F
It is therefore incorrect to contend, that the petitioner had no
notice, and was taken unawares. During the course of one of
the subsequent hearings {on the subject), learned counsel
representing tlie contemnors, clarified, that the properties in the
list provided to this Court, could not be put to sale, in execution G
of the orders dated 31.8.2012 and 5.12.2012. What was the
purpose sought to be achieved, if the properties {included in
the list furnished to this Court) could not be sold, for the
satisfaction of the judgment diited 31.8.2012? Surely, the·
contemnors, were taking this Court for a ride. The demeanour .H
636 SUPREME COURT REPORTS [2014] 12 S.C.R.

A . of the contemnors to stonewall the process of law; from the time
investigation was commenced by the SEBI in 2009, continued
even after the judicial process had attained finality, by this
Court's order dated 31.8.2012. All along the petitioner feigns
ignorance of everything.
B
50. Even though this Court had no intention to grant any
relaxation to the contemnors, on the restraint order passed on
28.10.2013 (by which the contemnors, were stopped from
leaving this country), yet when Interlocutory Application no. 4
was filed (in Contempt Petition (Civil) no. 260 of 2013),
C contending that Mr. Subrata Roy Sahara, had foreign
commitments, the Court relaxed the above order, and
permitted the petitioner to go abroad. But, simultaneously the
Court directed the petitioner, to immediately return back, and
be present in the country, in case of non-compliance of this
D Court's directions, (to submit original title deeds of
unencumbered properties of the Sahara Group of Companies).
On 21.11.2013, the Court was informed by the learned counsel
for the contemnors, that the. properties depicted in the list
furnished to this Court (in furtherance of the order dated
E 28.10.2013), could not be sold without the approval of the
Board of Directors, of the concerned companies (to which the
individual propertie·s belonged). The Court was then
·constrained to record, that the order dated 28.10.2013 passed
by this Court, had not been complied with, in its letter and spirit.
F It is, therefore, the Court took one further step to demonstrate
to the petitioner, as also, the other contemnors, the seriousness
of the issue, by ordering on 21.11.2013 " ... that the Sahara
Group of Companies shall not part with any movable or
immovable. property, until further orders .. ." Is it open to the
G petitioner to contend, that he had no notice, of the above Court
proceedings? The business obligations of the petitioner, were
bound to have been seriously affected, by the above order. The
petitioner would have to be hugely unconcerned and
disinterested, if he was ~till unaware of the n<!ture of the
H ongoing contempt proceedings; and where the proceedings
SUBRATA ROY SAHARA v. UNION OF INDIA 637
[JAGDISH SINGH KHEHAR, J.]
were leading to. The Court further directed (by the same order), A
that all the alleged contemnors would not leave the country,
without the permission of this Court. By th ts, the Court restored
its earlier order dated 28.10.2013. This order also had serious
repercussions, for the petitioner. When the above order was
passed, should the petitioner be permitted to contend, that he B
did not have any adverse business consequences? If it did, was
it open for him to assert, that he had no notice, and was
unaware about the direction towards which, the contempt
proceedings were moving?

51. Consequent upon passing of the above order dated
c
21.11.2013, a fresh list of properties was made available by
the companies, to this Court. The Court permitted learned
Senior Counsel representing the SEBI, time, to examine the
authenticity of the list of properties furnished, including the
valuation reports pertaining to the said properties. After a few D
dates of hearing, learned counsel for the contemnors informed
this Court, that the list of properties offered, could not be sold ·
for the execution of this Court's orders dated 31.8.2012 and
5.12.2012. We were then satisfied, that all the efforts made by
us were systematically scuttled by the contemnors, by adopting E
one or the other excuse. The petitioner was adopting these
tactics because, he had notice. Notice to comply with the orders
dated 31.8.2012 and 5.12.2012. Yet, he stonewalled all efforts
for compliance. He adopted the latter. Not even a single paisa
has been deposited, after this Court's order dated 5:12.2012. F

52. Outing the pendency of the contempt proceedings, we
also decided to determine the veracity of the redemption theory,
projected by the two companies. As a matter of law, it was not
open to the two companies to raise the aforesaid defence. This G
is because, exactly the same defence was raised by the two
companies, when they had approached this Court by filing Civil
Appeal no. 8643 of 2012 (and Writ Petition (Civil) no. 527 of
2012). In the aforesaid Civil Appeal, it was submitted on behalf
of the two companies, that they should be exempted from
H
638 SUPREME COURT REPORTS [2014] 12 S.C.R.

A depositing the amount already redeemed by them. The above
contention advanced by the two companies was hot accepted,
by the three-Judge ·Division Bench, when it disposed of Civil
Appeal no. 8643 of 2012 (and Writ Petition (Civil) no. 527 of
2012) by order dated 5.12.2012. It is, therefore apparent, that
B the instant defence of having already redeemed most of the
OFCD's, was not open to the two companies (and even the
contemnors). Yet, so as to ensure, that no injustice was done,
we permitted the two'companies to place material on the
record of this case, to substantiate the factum of redemption.
c The above issue has been dealt with by us in this judgment
(under the heading IX, "A few words, about the defence of
redemption of OFCD's, offered by the two companies"). It is,
therefore, that details about ttie conclusions on the alleged
redemptions, are not being expressed here. All that needs to
0 be stated is, that the two companies adopted the same tactics,
as were adopted by them on all earlier occasions. No material
worth the name, was ever produced before this Court, t6
establish the defence of redemption, even though ample
opportunities were afforded to the petitioner to do so. The
E instant factual position, has been placed on the record of this
case, only to demonstrate the efforts made by this Court, to
cajole the contemnors (including the petitioner - Mr. Subrata
Roy Sahara) into compliance of this Court's orders dated
31.8.2012 and 5.12.2012. lri the process, the Court ~xamined
each arid every defence raised on behalf of the two companies.
F The Court also examined alternative avenues by which, the
compliance of the orders dated 31.8.2012 and 5.12.2012,
could be ensured. In recording our conclusions, we may only
state, that the petitioner only engaged eminent learned Senior
Counsel, to avoid or defer compliance.
G
53. Having done the utmost, in requiring the contemnors
to comply with the orders dated 31.8.2012 and 5.12.2012,
wherein this Bench would meet exclusively for the benefit of the
contemnors, the Court felt that it had miserably failed, to
H persuade the contemnors to comply with its directions.
SUBRATA ROY SAHARA v. UNION OF INDIA 639
[JAGDISH SINGH KHEHAR, J.]
Accordingly on 4.3.2014, in exercise of the powers conferred A
under Articles 129 and 142 of the Constitution of India, this
Court ordered the arrest and detention of all the contemnors
(except Mrs. Vandana Bhargava) in judicial custody at Delhi,
till the next date .of hearing. By the order dated 4.3.2014, the
Court expressly granted liberty to the contemnors to propose B
an acceptable solution, for execution of its orders. Mrs.
Vandana Bhargava, who was excused from the order of
detention, was permitted to coordinate with those whose
detention the Court had ordered, so as to enable them to
formulate an acceptable solution for execution of the above c
orders. It is apparent, that right from the beginning, and everi
after ordering the detention of the contemnors including the
petitioner herein, The Court was only endeavouring, to ensure
the compliance of the orders passed by this Court on 31.8.2012
and 5.12.2012. On the following date of hearing i.e., on
0
7.3.2014, at the asking ofthe learned counsel representing the
contemnors, we enhanced the visitation times permissible to
the detenues, so as to enable them to meet their financial
consultants and lawyers for two hours every day. On 26.3.2014,
unilaterally, and without the asking of the contemnors, the Court E
also passed the following order:-

"We have gone through the fresh proposal filed on
25.03.2014. Though the same is not in compliance with our
Order dated 31.08.2012 or the Order passed by the three-.
Judge Bench of this Court on 05.12.2012 in Civil Appeal F
No.8643 of 2012 and on 25.02.2013 in I.A. No.67 of 2013
in Civil Appeal No.9813 cif 2011 with I .A. No.5 of 2013 in
Civil Appeal No.9833 of 2011, we are inclined to grant
interim bail to the contemnors who are detained by virtue
of our order dated 04.03.2014, on the condition that they G
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 nationalized bank be
furnished in favour of S.E.B.I. and be deposited before this
Court. H
640 SUPREME COURT REPORTS [201<i] 1/. S.C.R.

A On compliance, the contemnors be released
forthwith and the amount deposited be released to S.E.B.I.
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
B above."

We are not, and have never been interested in the
detention of the petitioner (and the two directors) in judicial
custody. Our only purpose has been, to ensure compliance of
this Court's orders dated 31.8.2012 and 5.12.2012.
c
54. Despite affording the contemnors close to 40 hearings,
and despite putting them to terms which ought to have shown
them, that leniency would not be extended forever, the
contemnors have remained adamant, and steadfast. They made
D only one deposit of Rs.5, 120 crores on 5.12.2012. Besides that
amount, not a single paisa has been deposited by the
contemnors. The thought, that repeatedly comes to our mind
is, why the two companies had not been able to pay anything
for the last about 1Y, years (close to 17 months) from this
E Court's order dated 5.12.2012, whereas, in· a period of three/
four months (before our order dated 31.8.2012) SIRECL claims
to have unilaterally refunded Rs.17,443 crores, and SHICL
claims to have on its own, redeemed Rs.5,442 crores, to their
investors. If the money could be easily collected and disbursed
F to the investors then, why not now? Considering the attitude of
the petitioner before this Court, one wonders what would
happen to the judicial system, if every Court order had to be
implemented, in the manner as the cine in hand. We are
informed, that the total amount presently payable in terms of this
G Court's order dated 31.8.2012, has swelled up to Rs.36,608
crores. In the above scenario; no other order, but the one
passed by us, could have been passed on 4.3.2014.

55. Our leniency is apparent from the fact, that we have
by our order dated 26.3.2014 ordered the petitioner and the
H other contemnors to be release.ct on bail, on the receipt of a
SUBRATA ROY SAHARA v. UNION OF INDIA 641
[JAGDISH SINGH KHEHAR, J.]
payment of Rs.10,000 crores, which is less than a third of the A
amount presently due. That would constitute, the first small step,
taken by the contemnors, for the satisfaction of the orders
passed by this Court on 31.8.2012 and 5.12.2012. The above
orders must, under all circumstances, be given effect to in letter
and spirit, and till that is done, the process of enforcing B
compliance, shall have to go on. The petitioner may be
released from judicial custody, if he complies with our order
dated 26.3.2014. That would however not excuse the petitioner
from making the balance payment, in terms of the orders dated
31.8.2012 and 5.12.2012, even if it means the re-arrest of the c
petitioner again and again, for the purpose of compliance of
this Court's orders.

V. Whether there is· no provision, whereunder an
order of arrest and detention can be passed for
the execution of a money-decree? D

56. One of the emphatic contentions advanced by some
of the learned counsel for the petitioner was; that execution of
a money-decree by way of arrest was a procedure "unknown
to law". Recourse to arrest of an individual for recovery of E
money, according to one learned counsel, constituted a
"draconian order". During the course of their submissions,
learned counsel for the petitioner, chose to address the Court
by using language, which we had not heard (either as practicing
Advocates, or even as Judges in the High Courts or this Cour'I]. F
We would, however, unhesitatingly state, that it is not possible
for us to accept, that learned counsel who addressed the
instant submission, were unaware of the relevant provisions of
law. It is however interesting to notice, that in the written
submissions handed over to us during the course of hearing, G
reference was actually made to· such a provision. It was
asserted in the written submissions prepared by Mr. Ram
Jethmalani, that "No imprisonment for failure to comply with a
decree or order for payment of money can be inflicted on a
person liable to pay in compliance, without complying with the
H
642 SUPREME COURT REPORTS [2014] 12 S.C.R.

A conditions of Section 51 proviso (b} of the CPC.". A
contradiction in terms. But there were many such contradictions, .
even on facts. A new phase of advocacy seems to have
dawned.

57. It is, therefore, that we shall first venture to set out the
8
provisions contained in the Code of Civil Procedure, 1908
(hereinafter referred to as, the CPC), as also, the Code of
Criminal Procedure, 1973 (hereinafter referred to as, the
Cr.P.C.), to highlightjhe provisions whereunder, a Court may
C order arrest and detention, for the execution of a money-decree
(or for the enforcement of a financial liability).

58. It is necessary, first of all, to place on record, the
provisions of Sections 51, 55 and 58 of the CPC. The same
are being extracted hereunder:- .
D
"51. Powers of Court to enforce execution ·

Subject to such conditions and .limitations as may
be prescribed, the Court may, on the application of
the decree-holder. order execution of the decree-
E
(a) by delivery of any property specifically decreed;

(b) by attachment and sale or by the sale without
attachment of any property;
F (c) by arrest and detention in prison for such period not
exceeding the period specified in section 58. where arrest
and detention is permissible under that section;

(d) by appointing a receiver;· or
G
(e) in such other manner as the nature of the relief granted
may require:

Provided that, where the decree is for the payment of
money. execution by detention in prison shall not be
H ordered unless. after ·giving the judgment-debtor an
SUBRATA ROY SAHARA v. UNION OF INDIA 643
(JAGDISH SINGH KHEHAR, J.]
opportunity of showing cause why he should not be A
committed to prison, the Court, for reasons recorded in
writing, is satisfied-

(a) that the judgment-debtor, with the object or effect of
_obstructing o_r delaying the execution of the decree,- B

(i) is likely to abscond or leave the local limits of the
jurisdiction of the Court.- or

(ii) has, after the institution of the suit in which the
decree was passed. dishonestly transferred. C
concealed, or removed any part of his propertv, or
committed any other act of bad faith in relation to
his property, or

(b) that the judgment-debtor has, or has had since the date
0
of the decree. the means to pay the amount of the decree
or some substantial part thereof and refuses or neglects
or has refused or neglected to pay the same, or

(c) that the decree is fo~ a sum for which the judgment-
debtor was bound in a fiduciary capacity to account. E

Explanation.- In the calculation of the means of the
judgment-debtor for'the purposes of clause (b), there shall
be left out of account any property which, by or under any
law or custom having the force of law for the time being in F
force, is exempt from attachment in execution of ttie
decree."

55. Arrest and detention

(1) A judgment-debtor may be arrested in execution of a G
decree at any hour and on any day. and shall. as soon as
practicable. be brought before the Court, and his detention
may be in the civil prison of the district in which the Court
ordering the detention is situate, or, where such civil prison
does not afford suitable accommodation, in any other H
644 SUPREME COURT REPORTS (2014] 12 S.C.R.

A place which the State Government may appoint for the
detention of persons ordered by the Courts of such district
to be detained:

Provided, firstly, that, for the purpose of making an arrest
B under this section, no dwelling-house shaU be entered after
sunset and before sunrise:

Provided, secondly, that no outer door of a dwelling-house
shall be broken open unless such dwelling-house is in the
occupancy of the judgment-debtor and he refuses or in· any
c way prevents access thereto, but when the officer
authorised to make the arrest has duly gained access to
any dwelling-house, he may bre?k open the door of any
room in which he has reason to believe the judgment-
debtor is to be found: · ·
D
Provided, thirdly, that, if the room is in the actual occupancy
of a woman who is not the judgment-debtor and who
according to the customs of the country does not appear
in public, the officer authorised to make the arrest shall
E give notice to her that she is at liberty to withdraw, and,
after allowing a reasonable time for her to withdraw and
giving her reasonable facility for withdrawing, may enter
the room for the purpose of making the arrest:

Provided, fourthly, that, where the decree in execution of
F which a judgment-debtor is arrested, is a decree for the
payment of money and the judgment-debtor pays the
amount of the decree and the costs of the arrest to the
officer arresting him, such officer shall at once release
him.
G
(2) The State Government may, by notification in the Official
Gazette, declare that any person or class of persons
whose arrest might be atten(!ed with danger or
inconvenience to the public shall notbe liable to arrest in
execution of a decree otherwise than in accordance with
H
SUBRATA ROY SAHARA v. UNION OF INDIA 645
[JAGDISH SINGH KHEHAR, J.]
such procedure as may be prescribed by the State A
Government in this behalf.

(3) Where a judgment-debtor is arrested in execution of a
decree for the payment of money and brought before the
Court, the Court shall inform him that he may apply to be
8
declared an insolvent, and that he may be discharged, if
he has not committed any act of bad faith regarding the
subject of the applicatfon and if he complies with
provisions of the law of insolvency for the time being in
force.
c
(4) Where a judgment-debtor expresses his iniention to
apply to be declared an insolvent and furnishes security,
to the satisfaction of the Court, that he will within one month
so apply, and that he will appear, when"called upon, in any
·proceeding upon the application or upon the decree in D
execution of which he was arrested, the Court may release
him from arrest, and, if he fails so to apply and to appear,
the Court may either direct the security to be realized or
commit him to the civil prison in execution of the decree.
E
58. Detention and release

(1) Every person detained in the civil prison in execution
of a decree shall be so detained,-

(a) where the decree is for the payment of a sum F
of money exceeding five. thousand rupees. for a
period not exceeding three months, and

(b) where the decree is for the payment of a sum
of money exceeding two thousand rupees. but not
exceeding five thousand rupees. for a period not G
exceeding six weeks:

Provided that he shall be released from such detention
before the expiration of the said period of detention-
H
646 SUPREME COURT REPORTS [2014] 12 S.C~R.

A (i) on the amount mentioned in the warrant for his
detention being paid to the officer ·in charge of the
civil prison, or

(ii) on the decree against him being otherwise fully
satisfiep, or
B
(iii) on the ·request of the person on whose
application he has been so detained, or
'' 1" •

(iv) on the omission by the person, on whose
c application he has been so detained, to pay
subsistence allowance:

Provided, also, that he shall not be released from such
deten.tion under clause (ii) or clause (iii), without the order
of the Court.
D
(1A) For the removal of doubts, it is hereby declared that
no order for detention of the judgment-debtor in civil prison
in execution of a decree for the payment of money shall
be made, where the total amount of the decree does not
E exceed two thousand rupees.

(2) A judgment-debtor released from detention under this
section shall not merely by reason ·of his release be
discharged from his debt, but he shall not be liable to be
re-arrested under the decree in execution of which he was
F
detained in the civil prison."

(emphasis is ours)

A perusal of Section 51 of the CPC, leaves no room for
G any doubt, that for the execution of a decree for payment of
money, an executing Court may order the arrest and detention
of the judgment-debtor. Section 55 of the CPC lays down the
manner and modalities to be followed, while executing an order
of arrest or detention. A perusal of Section 58 of the CPC
H postulate the detention of a judgment-debtor for up to six weeks
SUBRATA ROY SAHARA v. UNION OF INDIA 647
[JAGDISH SINGH KHEHAR, J.)

for the recovery of a meager amount, of less than Rs.5,000/-. A
Where the amount is in- excess of Rs.5,000/-, the provision
postulates, detention for upto three months. Interestingly, the first
proviso to Section 58(1) of the CPC clearly brings out, the
purpose of the person's detention. It provides for the concerned
person's release, on the satisfaction of the money-decree, even B
before the duration, for which he had been or~ered to be
detained. But the second proviso to Section 58(1) of the CPC
provides, that such an order of deteP.tion would not be revoked
"without the order of the Court.". Another interesting aspect
pertaining to the detention of an individual for the execution of C
a money-decree, is contained in Section 58(2) of the CPC,
which provides, that a person who has been ordered to be
arrested and detained (in the course of execution of a money-
decree) and has been released from jail, would not be treated
as having been discharged from his debt. In other words, the o
detention of a judgment-debtor in prison (for the execution of a
money-decree), would not liberate/free him from the financial
liability which he owes to the decree-holder. It is therefore
apparent, from the provisions of the CPC, that a Court can order
for the arrest and detention of a person, even for the E
enforcement of a paltry amount of Rs.2,000/- (and also for
recovery of amounts, in excess thereof).

· 59. We may also refer to the provisions under the Cr.P .C.
which mandate arrest and detention, for compliance of a
monetary payment. Reference in this behalf is to be made to F
Sections 125 and 128 of the Cr.P.C., which are being extracted
hereunder:-

"125. Order for maintenance of wives, child.ren and
parents-
G
(1) If any person having sufficient means neglects or
refuses to maintain-

(a) his wife, unable to maintain herself, or
H
648 SUPREME COURT REPORTS [2014] 12 S.C.R.

A (b) his legitimate or illegitimate minor child, whether
married or not, unable to. maintain itself, or

(c) his legitimate or illegitimate child (not being a
married daughter) who has attained majority, where
such child is, by reason of any physical or mental
B
abnormality or injury unable to maintain itself, or

(d) his father or mother, unable to maintain himself
or herself,

c A Magistrate of the first class may, upon proof of
such neglect or refusal, order such person to make a
monthly allowance for the maintenance of his wife or such
child, father or mother, at such monthly· rate, as such
magistrate thinks fit, and to pay the same to such person
D as the Magistrate may from time to time direct:

.Provided that the Magistrate may order the father of a
minor female child referred to in clause (b) to make such
allowance, until she attains her majority, if the Magistrate
is satisfied that the husband of such minor female child, if
E married, is not possessed of sufficient means.

Provided further that the Magistrate may, during the
pendency of the proceeding regarding monthly allowance
for the maintenance under this sub-section, order such
F person to make a monthly' allowance for the interim
maintenance.of his wife or such child, father or mother, and
the expenses of such proceeding which the Magistrate
considers reasonable, and to pay the same to such person
as the Magistrate may froni time to time direct:
·~ . . . '
G ,. Provided also that an application for the monthly allowance
for the interim maintenance and expenses for proceeding
under the second proviso shall, as far as possible, be
disposed of within sixty days from the date of t~e service
of notice of the application to such person.
H
SUBRATA ROY SAHARA v. UNION OF INDIA 649
. [JAGDISH SINGH KHEHAR, J.]
Explanation: For the purposes of this Chapter. A

(a) "minor" means a person who, under the
provisions of the Indian Majority Act, 1875 (9 of
1875) is deemed not to have attained his majority;

(b) ''wife" includes a woinan who has been divorced B
by, or has obtained a divorce from, her husband
and has not remarried. · · ·

(2) Any Such allowance for the maintenance or interim
maintenance and expenses of proceeding shall be c
payable from the date of the order, or, if so ordered, from
the date of the application for maintenance or interim
maintenance and expenses of proceeding, as the case
may be.

(3) If any person so ordered fails without sufficient cause D
to comply with the order. any such Magistrate may. for
everv breach of the order, issue a warrant for lewing the
amount due in the manner provided for levying fines. and
may sentence such person. for the whole. or any part of
each month's allowance for the maintenance or the interim E
maintenance and expenses of proceeding. as the case
be. remaining unpaid after the execution of the warrant,
to imprisonment for a term which may extend to one month
or until payment if sooner made:
F
Provided that no warrant shall be issued for the recovery
of any' amount due under this section unless application
be made to the court to levy such amount within a period
of one year from the date on which it.became due:

Provided further that if such persdn offers to maintain his G
wife on condition of her living with him, and she refuses
to live with him, such Magistrate may consider any
grounds of refusal stated by her, and may make an order .
l•nder this section notwithstanding such offer, if he is
satisfied that there is iust ground for so doing,_. H
650 SUPREME COURT REPORTS [2014) 12 S.C.R.

A Explanation: If a husband has contracted marriage with
another woman or keeps a mistress, it shall be considered
to be just ground for his wife's refusal to live with him.

(4) No wife shall be entitled to receive an allowance for the
maintenance or the inferim maintenance and expenses of
B
proceeding, as the case may be, from her husband under
this section if she is living in adultery, or if, without any
sufficient reason, she refuses to live with her husband, or
if they are living separately by mutual consent.

c (5) On proof that any wife in whose favour an order has
been made under this section is living in adultery, or that ·
without sufficient reason she refuses to live with her
husband, or that they are living separately by mutual
consent, the Magistrate shall cancel the order.
D
128. Enforcement of order of maintenance.

A copy of the order of maintenance or interim maintenance
and expenses of proceeding, as the case may be, shall
be given without payment to the person in whose favour it
E is made, or to his guardian, if any, or to the person to whom
the allowance for the maintenance or the allowance for the
interim maintenance and expenses of proceeding, as the
case may be, is to be paid; and such order may be
enforced by any Magistrate in any place where the person
F against whom it .is made may be, on such Magistrate
being satisfied as to the identity of the parties and the non-
payment of the allowance, or as the case may be,
expenses, due."

G (emphasis is ours)

Rather tlian venturing an interpretation of Sections 125 and 128
of the Cr.P.C., in order to demo[lstrate the nature of orders, that
can be passed thereunder, reference may be made to the
decision rendered by this Court in Ku/dip Kaur v. Surinder
H
SUBRATA ROY SAHARA v. UNION OF INDIA 651
[JAGDISH SINGH KHEHAR, J.]
Singh, (1989) 1 SCC 405, wherein this Court observed as . A
under:-

"6. A distinction has to be drawn between a mode of
enforcing recovery on the one hand and effecting actual
recovery of the amount of monthly allowance which has
8
fallen in arrears ·on the other. Sentencing a person to jail
is a 'mode of enforcement'. It is not a 'mode of satisfaction'
of the liabilitv. The liabilitv can be satisfied only by making
actual payment of the arrears. The whole purpose of
sending to jail is to oblige a person liable to pay the C
monthly allowance who refuses to comply with the order
without sufficient cause. to obey the order and to make the
payment. The purpose of sending him to jail is not to wipe
out the liability which he has refused to discharge. Be it
also realised that. a person ordered to pay monthly
allowance can be sent to jail only if he fails to pay monthly D
allowance 'without sufficient cause' to comply with the
order. ltwould indeed be strange to hold that a person who
'without reasonable cause' refuses to comply with the order
of the Court to maintain his neglected wife or child would
be absolved of his liability merely because he prefers to E
go to jail. A sentence of jail is no substitute for the recoverv
Of the amount of monthly allowance which has fallen in
arrears. Monthly allowance is paid in order to enable the
wife and child to live by providing with the essential
economic wherewithal. Neither the neglected wife nor the F
neglected child can live without funds for purchasing food
and the essential articles to enable them to live. Instead
of providing them with the funds, no useful purpose would
be served by sending the husband to jail. Sentencing to
jail is the means for achieving the end of enforcing the G
order by recovering the amount of arrears. It is not a mode
of discharging liability. The section does not say so; The
Parliament in its wisdom has not said so. Commonsense
does not support such a construction. From where does
H
652 SUPREME COURT REPORTS [2014] 12 S.C.R.

A the Court draw inspiration for persuading itself that the
liability arising under the order for maintenance would
stand discharged upon an effort being made to recover it?
The order for monthly allowance can be discharged only
upon the monthly allowance being recovered. The liability
B cannot be taken to have been discharged by sending the
person liable to pay the monthly allowance. to jail. At the
cost of repetition it may be stated that it is only a mode or
method of recoverv and not a substitute for recoverv. No
otheF view is possible. That is the reason why we set aside
c the order under appeal and passed an order in the
following terms:

'Heard both the sides.

The appeal is allowed. The order passed by the learned
D Magistrate as confirmed by the High Court in exercise of
its revisional jurisdiction to the effect that the amount of
monthly allowance payable under Section 125 of the Code
of Criminal Procedure is wiped out and is not recoverable
any more by reason of the fact that respondent No. 1.
E Surinder Singh. was sent to jail in exercise of the powers
under Section 125 of the Code of Criminal Procedure is
set aside. In our opinion, respondent No. 1, husband of
appellant, is not absolved of his liability to pay the monthly
allowance by reason of his undergoing a sentence of jail
F and the amount is still recoverable notwithstanding the fact
that the respondent No. 1 husband who is liable to pay he
monthly allowance·has undergone a sentenee of jail for
failure to pay the same. Our reasons for reaching lhis
conclusion will follow. ·
G So far as the amount of monthly allowance awarded in this
particular case is concerned, by consent of parties, we
pass the following order in regard·to future payments with
effect from 15th August, 1986.
'
We direct that respondent No. 1. Surinder Singh shall pay
H
SUBRATA ROY SAHARA v. UNION OF INDIA 653
[JAGDISH SINGH KHEHAR, J.]
Rs. 275 (Rs.200 for the wife and Rs.75 for the child) as A
and by way of maintenance to the appellant Sm!. Kuldip
Kaur commencing from August 15. 1986. The amount of
Rs.275 shall be paid by the 15th of every succeeding
month. On failure to pay any monthly allowance for any
month hereafter on the part of respondent No. 1. Surinder B
Singh. the learned Metropolitan Magistrate shall issue a
warran!for his arrest. cause him to be arrested and put in
jail for his failure to comply with this Court's order and he
shall not be released till he makes the payment.

With regard to the arrears wliich have become due till C
August 15, 1986, learned Counsel for the appellant states
that having regard to the fact that respondent No. 1, has
agreed to the aforesaid consent order, the appellant will
not apply for the respondent being sent to jail under
Section 125 of the Code of Criminal Procedure but will D
reserve the liberty to realize the said amount (Rs.5090 plus
the difference between the amount that became due and
the amount actually paid under the interim order) under the
law except by seeking an order for sending respondent No.
1 to jail. E

The appeal will stand disposed of accordingly."

(emphasis is ours)

On the subject in hand, reference may also be made to a F
recent judgment of this Court in Poongodi v. Thangavel, (2013)
10 SCC 618. The relevant observations rendered by this Court
in the above judgment are, being reproduced hereunder:-

"6. In another decision of this Court in Shantl:la v. 8.G. G
Shivananjappa, (2005) 4 SCC 468, it has been held that
the liability to pay maintenance under
Section 125 Cr. P. C. is in the nature of a continuing
liability. The nature of the right to receive maintenance
and the concomitant liability to pay was also noticed in H
654 SUPREME COURT REPORTS (2014] 12 S.C.R.

A a decision of this Court in Shahada Khatoon and Ors. v.
Amjad Ali and Ors., (1999) 5 SCC 672. Though in a
· slightly different context, the remedy to approach the court
by means of successive applications under
Section 125(3) Cr.P.C. highlighting the subsequent
B defaults in payment of maintenance was acknowledged
by this Court in Shahada Khatoon.

7. The ratio of the decisions in the aforesaid cases
squarely applies to the present case. The application dated
05.02.2002 filed by ttie Appellants under Section 125(3)
c was in continuation of the earlier applications and for
subsequent periods of default on the part of the
Respondent. The first proviso to Section 125(3), therefore
did not extinguish or limit the entitlement of the Appellants
to the maintenance granted by the learned trial court, as
D has been held by the High Court.

8. In view of the above, we are left in no doubt that the
order passed by the High Court needs to be interfered With
by us which we accordingly do. The order dated
E 21.04.2004 of the High Court is set aside and we now
issue directions to the Respondent to pay the entire
arrears of maintenance due to the Appellants commencing
from the date of filing of the Maintenance Petition CM.C.
No. 1 of 1993) i.e. 4.2.1993 within a period of six months
F and current maintenance commencing from the month of
September. 2013 payable on or before 7th.of October.
2013 and thereafter continue to pay the monthly
maintenance on or before the 7th of each successive
month. If the above order of this Court is not Complied With
by the Respondent. the learned Trial Court is directed to
G
issue a warrant for the arrest of ttie Respondent and
· ensure that the same is executed and the respondent
taken into custody to suffer imprisonment as provided by
Section 125(3) Cr.P.C.". · 1

H (emphasis is ours)
SUBRATA ROY SAHARA v. UNION OF INDIA 655
[JAGDISH SINGH KHEHAR, J.]
It is, therefore apparent, that even for a petty amount of A
maintenance (which .in Kuldip Kaur's case (supra) was a
meager amount of Rs.275/- per month), the respondent was
ordered to be arrested and put in jail for his failure to comply
with the Court's order, with a further direction that he would not
be released till he had made the payment. Most importantly, B
the purpose of sending a person to jail, must be understood
as being a manner, procedure or device, for the satisfaction
of the liability. Arrest and detention is only to coerce .
compliance. The liability to pay, would stand discharged only
by actual payment, of the amount due. Remaining in jail, would c
not discharge the liability to pay.

60. Insofar as the provisions of the Cr.P.C. are concerned,
reference may also be made to Sections 357, 421 and 431, .
which are being extracted hereunder:-
D
"357. Order to pay compensation.

ill When a Court imposes a sentence of fine or a
sentence (including a sentence of death) of which fine
forms a part, the Court may, when passing judgment order E
the whole or any part of the fine recovered to be applied-

@}. in defraying the expenses properly incurred in the
prosecution; ·

.{Ql in the payment to any person of compensation for any F
loss or injury caused by the offence, when compensation
is, in the opinion of the Court; recoverable by such person
in a Civil Court;

~when any person is convicted.of any offence for having
caused the death of another person or of having abetted G
the commission of such an offence, in paying
compensation to the persons who are, under the Fatal
Accidents Act, 1855 (13 of 1855), entitled to recover
damages from the person sentenced for the loss resulting
to them from such death; H
656 SUPREME COURT REPORTS [2014] 12 S.C.R.

A @when any person is convicted of any offence which
includes theft, criminal misappropriation, criminal breach
of trust; or cheating, or of having dishonestly received or
retained, or of having voluntarily assisted in disposing of,
stolen property knowing or having reason to believe the
B same to be stolen, in compensating any bona fide
purchaser of such property for the loss of the same if such
property is restored to the possession of the person
entitled thereto.

ill If the fine is imposed in a case which is subject to
c appeal, no such payment shall be made before the period
allowed for presenting the appeal has elapsed, or, if an
appeal be presented, before the decision of the appeal.

.@l When a Court imposes a sentence, of which fine does
D not form a part. the Court mav. when passing judgment
order the accused person to pay, by wav of compensation,
such amount as may be specified in the order to the
person who has suffered any loss or injury by reason of
the act for which the accused person has been so
E sentenced. ·

ffi An order under this section may also be made by an
Appellate Court or by the High Court or Court of Session
when exercising its powers of revision.

F .{fil At. the time of awardin_g compensation in any
subsequent civil suit relating to the same matter, the Court
shall take into account any sum paid or recovered as
compensation unde!r this section.

421. Warrant for levy of fine.
G
ill When an offender has been sentenced to pay a fine.
the Court passing the sentence may take action for the
recovery of the fine Jn either or both of the following ways,
that is to say, it may-
H
SUBRATA ROY SAHARA v. UNION OF INDIA 657
[JAGDISH SINGH KHEHAR, J.]
@l issue a warrant for the levy of the amount by attachment A
and sale of any movable property belonging to the offender;

ill issue a warrant to the Collector of the district,
authorizing him to realise the amount ·as arrears of land
reven~e from the movable or immovable property, or both, B
of the defaulter:

Provided· that, if the sentence directs that in default of
payment of the fine, the offender shall be imprisoned, and
if such offender has undergone the whole of such
imprisonment in default, no Court shall issue such warrant C
unless, for special reasons to be recorded in writing, it
considers it necessary so to do, or unless it has made an
order for the payment of expenses or compensation out
of the fine under section 357.
D
ill The State Government may make rules regulating the
manner in which warrants under clause (a) of sub- section
(1) are to be executed, and for the summary determination
of any claims made by any person other than the offender
in respect of any property attached in execution of such_ E
warrant. •
ill Where the Court issues a warrant to the Collector under
clause (b) of sub-section (1), th€! Collector shall realise the
amount in accordance with the law relating to recovery of
arrears of land revenue, as if such warrant were a F
certificate issued under such law:

Provided that no such warrant shall be executed by the
arrest or detention in prison of the offender.

431. Money ordered to be paid recoverable as fine.- G

Any money (other than a fine) payable by virtue of any order
made under this Code. and the method of recovery of
which is not otherwise expressly provided for. shall be
recoverable as if it were a fine: H
658 SUPREME.COURT REPORTS [2014] 12 $.C.R.

A Provided that Section 421 shall, in its application to an
order under Section 359, by virtue of this section, be
construed as if in the proviso to sub-section (1) of Section
421. after the words and figures "under Section 357'',. the ·
words and figures "or an order for payment of costs under
B Section 359" had beein inserted."

(emphasis is ours)

The above provisio'ns were examined by this Court in K.A
Abbas H.S.A. v. Sabu Joseph & Anr. Etc., (2010) 6 SCC 230,
C a relevant extract of the observations made in the above
judgment, are being reproduced hereunder:-

"17. In Ba/raj v. State of UP, AIR 1995 SC 1935, this Court
has held, that, Section 357(3) Cr. P.C. provides for
D ordering of payment by way of compensation to the victim
by the accused. It is an important provision and it must also
be noted that power tc> award compensation is not ancillary
to other sentences but it is in addition thereto. In Hari
Kishan v. Sukhbir.Singh and Ors., AIR 1988 SC 2127, this
Court has observed l!hat, Sub-section (1) of Section 357
E
provides power to award compensation to victims of the
•offence out of the sentence of fine imposed on accused.

18. In this case, we are not concerned with Sub-section
(1). We are concerned only with Sub-section (3). It is an
F important provision but Courts have seldom invoked it.
Perhaps due to ignorance of the object of it. It empowers
the Court to award compensation to victims while passing
· judgment of conviction. In addition to conviction. the Court
may order the accused to pay some amount by way of
G compensation to victim who has suffered by the action of
accused. It may be noted that this power of Courts to award
compensation is not ancillary to other sentences but it is
in addition thereto. This power was intended to do
something to reassure the victim that he or she is not
H forgotten in the criminal justice system. It is a measure of
SUBRATA ROY SAHARA v. UNION OF INDIA 659
[JAGDISH SINGH KHEHAR, J.]
responding appropriately to crime as well of reconciling the A
victim with the offender. It is, to some extent, a constructive
approach to crimes. It is indeed a step forward in our
criminal justice system. We, therefore, recommend to all
Courts to exercise this power liberally so as to meet the
ends of justice in a better way. B

19. In Dilip S. Dahanukar v. Kotak Mahindra Co. Ltd. and
Anr. (2007) 6 SCC 528, this Court differentiated between
fine and compensation, and while doing so, has stated that
the distinction between Sub-sections (1) and (3) of
Section 357 is apparent. Sub-section (1) provides for C
application of an amount of fine while imposing a sentence
of which fine forms a part; whereas Sub-section (3) calls
for a situation where a Court imposes a sentence of which
fine does not form a part of the sentence.
D
The court further observed:

27. Compensation is awarded towards sufferance of any
loss or iniurv by reason of an act for which an accused
person is sentenced. Although it provides for a criminal E
liability. the amount which has been awarded as
compensation is considered to be recourse of the victim
in the same manner which may be granted in a civil suit.

Finally the court summed up:
F
31. We must. however. observe that ther.e exists a
distinction between fine and compensation. although. in a
way it seeks to achieve the same puroose. An amount of
compensation can be directed to be recovered as a 'fine'
but the legal fiction raised in relation to recovery of fine only. G
it is in that sense 'fine' stands on a higher footing than
compensation awarded by the Court.

20. Moving over to the question. whether a default sentence
can be imposed on default of payment of compensation.
this Court in the case of Hari Singh v. Sukhbir Singh and H
· 660 SUPREME COURT REPORTS [2014) 12 S.C.R.

A in Balraj v. State of U.P. has held that it.was open to all
courts in India to impose a sentence on default of payment
of compensation under Sub-section (3) of Section 357. In
Hari Singh v. Sukhbir Singh (supra), this Court has r.ioticed
certain factors which requires to be taken into
B consideration while passing an order under the section:

"11. The payment by way of compensation must,
however, be reasonable. What is reasonable, may
depend upon the facts and circumstances of each
case. The quantum of compensation may be
c determined by taking into account the nature of
crime, the justness of claim by the victim and the
ability of accused to pay. If there are more than one
accused they may be asked to pay in equal terms
unless their capacity to pay varies considerably.
D The payment may also vary depending upon the
acts of each accused. Reasonable period for
payment of compensation, if necessary by
installments, may also be given. The Court may
enforce the order by imposing sentence in default."
E
JOO(. JOO( JOO( JOO( JOO(

22. The raw laid down in Hari Singh v. Sukhbir Singh
(s4pra) was reiterated by this Court in the case of Suganthi
Suresh Kumar v. Jagdeeshan, (2002) 2 SCC 420. The
F court observed: . .

"5. In the said decision this Court reminded all
concerned that it is well to remember the emphasis
laid on the need for making liberal use of
G Section 357131 of the Code. This was observed by
reference to a decision of this Court in, 1989 Cri
LJ 116 Hari Singh v. Sukhbi.r Singh.

xxx xxx JOO(
r
JOO( JOO(

H
SUBRATA ROY SAHARA v. UNION.OF INDIA 661
[JAGDISH SINGH KHEHAR, J.]
10. That apart. Section 431 of the Code has only A
prescribed that any money (other than fine) payable by
virtue of an order made under the Code shall be
recoverable "as if it were a fine". Two modes of recovery
of the fine have been indicated in Section 421(1) of the
Code. The proviso to the Sub-section says that if the B
sentence directs that in default of payment of the fine. the
offender shall be imprisoned. and if such offender has
undergone the whole of such imprisonment in default. no
court shall issue such warrant for lew of the amount.
)()()( )()()( )()()( )()()( )()()(
c
23. In order to set at rest the divergent opinion expressed
in Kunhappu's case (supra), this Court in the case of
Vijayan v. Sadanandan K. and Anr., (2009) 6 SCC 652,
after noticing the provision of Section 421 and 431 of D
Cr.PC. which dealt with mode of recovery of fine and
Section 64 of IPC. which empowered the courts to provide
for a sentence of imprisonment on default of payment of
fine, the Court stated:
E
"24. We have carefully considered the submissions
made on behalf of the respective parties. Since a
decision on the question raised in this petition is· still .
in a nebulous state. there appear to be two views as
to whether a default sentence on imprisonment can
be imposed in cases where compensation is F
awarded to the complainant under
Section 357(3) Cr.P.C. As pointed out by Mr. Basant
in Dilip S. Dahanukar's case. the distinction between
a fine and compensation as understood under
Section 357(1)(b) and Section 357(3) Cr.P.C. had G
been explained. but the question as to whether a
default sentence clause could be made in respect
of compensation payable under
Section 357(3) cr:P.C. which is central to the
decision in this case. had not been considered. H
662 · SUPREME COURT REPORTS (2014) 12 S.C.R.

A The court further held:

31. The provisions of Sections 357(3) and 431 Cr.P.C ..
when read with Section 64 IPC. empower the Court, while
making an order for payment of compensation. to also
include a default sentence in case of non-payment of the
B
~·

32. The observations made by this Court in Hari
Sinqh's case (supra) are as important today as they were
when they were made and if. as submitted by Dr. Pillay.
c recourse can only be had to Section 421 Cr.P.C.· for
enforcing the same; the very object of Sub-section (3) of
Section 357 would be frustrated and the relief
contemplated therein would be rendered somewhat
illusorv."
D
24. In Shantilal v. State of M.P., (2007) 11 SCC 243, it is
stated, that. the sentence of imprisonment for default in
payment of a fine or compensation is different from a
normal sentence of imprisonment. The court also delved
into the factors to be taken into consideration while passing .
E
an order under SeGtion 357(3) of the Cr.PC. This Court
stated:

"31 . ... The term of' imprisonment in default of payment
of fine is not a sentence. It is a penalty which a person
F incurs on account of non-payment. of fine. The sentence
is something which an offender must undergo unless it
is set aside or remitted in part or in whole either in appeal
or in revision or in other appropriate judicial proceedings
or "otherwise". A term of imprisonment ordered in default
G of payment of fine stands on a different footing. A person
is required to und•~rgo imprisonment either because he
is unable to pay thH amount affine or refuses to pay such
amount. He. therefore. can always avoid to undergo
imprisonment in default of payment of fine by paying
H such amount. It i.s. therefore. not only the power. but
SUBRATA ROY SAHARA v. UNION OF INDIA 663
[JAGDISH SINGH KHEHAR, J.]
the duty of the court to keep in view the nature of offence. A
circumstances under which it was committed. the position
of the offender and other relevant considerations before
ordering the offender to suffer imprisonment in default of
pavment of fine."
B
(emphasis in original)

25. In Kuldip Kaur v. Surinder Singh and Anr., AIR 1989
SC 232, in the context of Section 125 Cr.PC observed
that sentencing a person to jail is a mode of
enforcement... C

xxx JOO( xxx xxx JOO(

26. From the above line of cases, it becomes very clear,
that, a sentence of imprisonment can be granted for
default in ,payment of compensation awarded under D
Section 357(3) of Cr.PC. The whole puroose of the
provision is to accommodate the interests of the victims
in the criminal justice system. Sometimes the situation
becomes such that there is no purpose is served by
keepinq a person behind bars. Instead directing the E
accused to pay an amount of compensation to the victim
or affected party can ensure delivery of total justice.
Therefore. this grant of compensation is sometimes iii lieu
of sending a person behind bars or in addition to a very
light sentence of imprisonment. Hence on default of F
payment of this compensation. there must be a just
recourse. Not imposing a sentence of imprisonment would
mean allowing the accused to get away without paying the
compensation. and imposing another fine would be
impractical as it would mean imposing a fine upon another G
fine and therefore would not ensure proper enforcement
of the order of compensation. While passing an order
under Section 357(3). it Is imperative for the courts to look
at the ability and the capacity of the accused to pay the
same amount as has been laid down by the cases above, H
664 SUPREME COURT REPORTS [2014] 12 S.C.R.

A otherwise the very purpose of granting an order of
compensation would stand defeated.
)()()( )()()( )()()( )()()( )()()(

29. Section 431 clearly provides that an order of
B compensation under Section 357(3) will be recoverable in
the same way as if it were a fine. Section421 further
provides the mode of recovery of a fine and the section
clearly provides that a person can be imprisoned for non-
payment of fine. The,refore. going by the provisions of the
c code. the intention of the legislature is clearly to ensure that
mode of recovery of a fine and compensation is on the
same footing. In liqht of the aforesaid reasoning. the
contention of the accused that there can be no sentence
of imprisonment for default in payment of compensation
D under Section 357(3) should fail."

(emphasis is ours)

It is therefore appan3nt, that even under the provisions of
the Cr.P.C. there is an elaborate procedure prescribed,
E whereunder a person can be subjected to arrest and detention
for the satisfaction of a fine or compensation (i.e., for the
recovery of a financial liability).

61. From the above' provisions of the CPC, as also, the
F Cr.P .C. it is apparent, that to enforce a financial liability ordered
by a Court, one of the p13rmissible means is, by way of arrest
and detention. The submissions advanced by the learned
counsel for the petitioner, that there is no provision,
whereunder, an order of arrest and detention can be passed,
G for the execution of a money-decree, cannot therefore be
accepted. It is also not possible for us to infer, that learned
counsel were oblivious o,f the provisions contained in the civil/
criminal procedure code~;. It may be pointed out, that there are
a large number of standalone statutory enactments, whereunder
H
SUBRATA ROY SAHARA v. ·UNION OF INDIA 665
[JAGDISH SINGH KHEHAR, J.J.
arrest and detention is ordered for the execution cif a financial A
liability.

VI. Whether it was imperative for this Court to
adopt the procedure prescribed under Section
51 (and other allied provisions) of the CPC? B

Whether if the above procedure was not
followed, the impugned order passed by this
Court on 4.3.2014 was. rendered void, and as
such, unsustainable in law?
c
62. Despite the written submission file"d by Shri Ram
Jethmalani, which we have adverted to in the immediately
preceding part of this order, the credit for advancing
submissions on the issue depicted in the heading hereinabove,
goes to Dr. Abhishek Manu Singhvi, learned senior Counsel, D
who also represented the petitioner. It was his submission, that
it was imperative for this Court before ordering the detention
of the petitioner, to ensure compliance of the preconditions
referred to in Section 51 of the CPC. Section 51 is once again
being extracted hereunder:- E
"51. Powers of Court to enforce execlltion

Subject to such conditions and limitations as may
be prescribed, the Court may, on the application of
the decree-holder. order execution of the decree- F

(a) by delivery of any property specjfically decreed;

(b) by attachment and sale or by the sale without
attachment of any property;
G
(c) by arrest and detention in prison for such period
not exceeding the period specified in section 58.
where arrest and detention is permissible under
that section;
H
666 SUPREME COURT REPORTS (2014] 12 S.C.R.

A (d) by appointing a receiver; or

(e) in such other manner as the nature of the relief .
granted may require:

Provided that, where the decree is for the payment of
B money. execution by detention in prison shall not be
ordered unless. affier giving. the judgment-debtor an
opportunity of showing cause why he should not be
committed to prison, the Court, for reasons recorded in
writing, is satisfie·d-
c
(a) that the judgment-debtor, with the object or effect of
obstructing or delaying the execution of the decree.-
!
(i) is likely to abscond or leave the local limits of the
jurisdiction of the Court. or
D
•
(ii) has. after the institution of the suit in which the
decree was passed. dishonestly transferred.
concealed. or removed any part of his property. or
committed any other act of bad faith in relation to
E his property, or

(b) that the judgment-debtor has. or has had since the date
of the decree. the means to pay the amount of the decree
or some substantial part thereof and refuses or neglects
or has refused or nE!glected to pay the same, or
F
(c) that the decree is for a sum for which the judgment-
debtor was bound in a fiduciary capacity to account.

Explanation.- In the calculation of the means of the
G judgment-debtor for the purposes of clause (b), there shall
be left· out of account any property which, by or under any
law or custom having the force of law for the time being in
force, is exempt from attachment in execution of the
decree."
H (emphasis is ours)
SUBRATA ROY SAHARA v. UNION OF INDIA 667
[JAGDISH SINGH KHEHAR, J.]
Referring to Section 51 of the CPC, it was.the pointed A
contention of the learned counsel, that the proviso to Section
51, lays down the preconditions for execution of a money-
decree (by way of arrest and detention, in prison). While inviting
our attention to the aforesaid proviso, it was asserted, that it
was imperative for a Court, to afford an oppo.rtunity to show B
cause to a judgment-debtor, before he is committed to prison.
Furthermore, while interpreting the above proviso, it was the
submission of learned Senior Counsel, that such detention
could be ordered, only and only, if the Court felt that the
judgment-debtor had consciously obstructed or delayed the c
execution of a money-decree. Such active obstruction or delay,
according to the learned counsel, could be inferable, if the Court
was apprehensive, that the judgment-debtor would abscond or
leave the local limits of the jurisdiction of the Court. Or if the
Court was satisfied, that the judgment-debtor had dishonestly
0
transferred, concealed or removed his property, so as to avoid
the execution of the money-decree. Or if it was found by the
Court, that the judgment-debtor had committed an act of bad
faith in relation to his property, with the above stated objectives.
Or if the Court could arrive at the conclusion, that even though E
the judgment-debtor had means to pay the amount expressed
in the decree (or some substantial part thereof), yet he was
refusing or neglecting to pay the same. According to learned
counsel, any one of the above alternatives would enable the
Court concerned, to enforce payment, by way of arrest and
detention. It was however the contention of the learned Senior F
Counsel, that none of the above preconditions existed, when
this Court all of a sudden, without affording an opportunity to
the petitioner, ordered his arrest and detention along with two
other directors on 4.3.2014 (by passing the impugned order).
G
63. In addition to the above submission, learned Senior
Counsel invited our attention to Order XXl.rules 37 and 40 of
the CPC. The above.Rules are being extracted hereunder:-

"37. Discretionary power to permit judgment-debtor to H
668 SUPREME COURT REPORTS [2014] 12 S.C.R.

A show cause against detention in prison

(1) Notwittis1anding anything in these rules, where
an application is for the execution of a decree for
the payment of money by the arrest and detention
in the civil pnison of a judgment-debtor who is liable
B
to be arreste'd in pursuance of the application. the
·Court shall. instead of issuing a warrant for his
arrest. issue a notice calling upon him to appear
before the Court on a day to be specified in the
notice and show cause why he should not be
c committed to the civil prison:

Provided that such notice shall not be necessary if
the Court is satisfied, by affidavit, or otherwise, that,
with the obje1ct or effect of delaying the execution
D of the decree, the jddgment-debtor is likely to
abscond or leave the local limits of the jurisdiction
of the Court.

(2) Where appearance is not made in obedience
to the notice. the Court shall. if the decree-holder
E
so requires. issue a warrant for the arrest of the .
judgment-debtor.

40. Proceedings on appearance of judgment-debtor in
. obedience fo notice or after a.rrest
F
(1) When a judgment-debtor"appears before the
Court in obedience to a notice issued under rule· 37.
or is broughi: before the Court after being arrested
in execution of a decree for the paynient of money.
the Court shall proceed to hear the decree-holder
G
and take all such evidence as may be produced
by him in support of his application for execution.
and shall then give the judgment-debtor an
opportunity of showing 'cause why he should not be
committed to the civil prison.
H
SUBRATA ROY SAHARA v. UNION OF INDIA 669
[JAGDISH SINGH KHEHAR, J.]
(2) Pending the conclusion of the inquiry under sub- A
rule (1) the Court may. in its discretion. order the
judgment-debtor to be detained in the custody of an
officer of the Court or release him on his furnishing
security to the satisfaction of the Court for his
appearance when required. B
(3) Upon the conclusion of the inquiry under sub-rule
(1) the Court may, subject to the provisions of
section 51 and to the other provisions of this Code,
make an order for the detention of the judgment-
debtor in the civil prison and shall in that event C
cause him to be arrested if he is not already under
arrest:

·Provided that in order to give the judgment-debtor
an opportunity of satisfying the decree, the Court · o
may, before making the order of detention, leave
the judgment-debtor in the custody of an officer of
the Court for a specified period not exceeding
fifteen days or release him on his furnishing security
to the satisfaction of the Court for his appearance E
at the expiration of the specified period if the
decree be not sooner satisfied.

(4) A judgment-debtor released under this rule may
be re-arrested.
F
(5) When the Court does not make an order of ·
detention under sub-rule (3), it shall disallow the
application and, if the judgment-debtor is under ..
arrest, direct his release.?
G
(emphasis is ours)

Relying on the afore-extracted rules from Order XXI of the CPC,
it was sought to be asserted, that a show cause notice to a
judgment-debtor was imperative, before he could be committed
H
670 SUPREME COURT REPORTS [2014] 12 S.C.R.

A to civil prison. In fact, according to learned counsel, rule 40
extracted above, affords an opportunity to the judgment-debtor
to lead evidence in ord13r to demonstrate, why he should not
be committed to civil prison. Based on the aforementioned
assertions, it was sought to be contended, that since no
8 procedure, of the nature referred to hereinabove, had been
followed before-issuing the order dated 4.3.2014, the said order
must be -treated as void, as it must be deemed to have been
passed in violation of th13 mandatory procedure, established by ·
law.
c 64. In order to support his above submissions, learned
Senior Counsel·also pla.ced reliance on Supreme Court Rules,
1966. He invited our atte1ntion to Order XIII rule 6, which is being
reproduced hereunder:··
"Order XIII
D Judgments, decrees and Orders
6. The decree passed or order made by the Court in every .
appeal, and any order for costs in connection with the·
proceedings therein, shall be transmitted by the Registrar
E to the Court or Trib1Jnal from which the appeal was brought.
and steps for the e11forcement of such decree or order shall
be taken in that court or Tribunal in the way prescribed by
law."

{emphasis is ours)
F
It was sought to be asserted, on the basis of the above rule,
that the power of execution of an order passed by this Court iri
appeal, did not resfwith this Court, but was to be exercised by
the Court or Tribunal concerned, in the manner "prescribed by
G law". It was accordingly asserted, that this Court had
transgressed the afore::iaid rule framed by this Court, inasmuch
as, it had exercised the power of an executing Court while
passing the order dated 4.3.2014, whereas, no such power
was vested in this Court.
H
SUBRATA ROY SAHARA v. UNION OF INDIA 671
[JAGDISH SINGH KHEHAR, J.]
65. In order to demonstrate, that it was not within the A
jurisdictiol) of this Court (in exercise of the power vested in it
Linder Article 142 of the Constitution of India), to pass the
impugned order dated 4.3.2014, learned Senior Counsel
placed reliance on the judgment rendered by this Court in
Supreme Court Bar Association's case (supra), wherein this B
Court ha.d declared the legal position as under:-

"47. The plenary powers of this court under Article 142 of
the Constitution are inherent in the Court and are
complementary to those .powers which are specifically C
conferred on the court by various statutes though are not
limited by those statutes. These powers also exist
independent of the statutes with a lliew to do complete
justice between the parties. These powers are of very wide
amplitude and are in the nature of supplementary powers.
This power exists as a separate and independent basis D
of jurisdiction, apart from the .statutes. It stands upon the
foundation, and the basis for its exercise may be put on a
different and perhaps even wider footing, to prevent
injustice in the process of litigation and to do complete
justice between the parties. This plenary jurisdiction is, thus, E
the residual source.of power which this Court may draw
upon as necessary whenever it is just and .equitable to do
so and in particular to ensure the observance of the due
process of law, to do complete justice between the parties,
·while administering justice according to law. There is no F
doubt that it is an indispensable adjunct to all other powers
and is free from the restraint of jurisdiction and operates
as a valuable weapon in the hands of the Court to prevent
"clogging or obstruction of the stream of justice". It,
however, needs to be remembered that the powers G
conferred on the Court by Article 142 being curative in
nature cannot be construed as powers which authorise the
Court to ignore the substantive rights of a litigant while
dealing with a cause pending before it. This power cannot
be used to "supplant" substantive law applicable to the H
672 SUPREME COURT REPORTS [2014] 12 S.C.R.

A case or cause under consideration of the court. Article 142,
even with the width of its amplitude, cannot b~ used to
build a new edifice where none existed earlier, by ignoring
express statutory provisions dealing with a subject and
thereby to achieve something indirectly which cannot be
B achieved directly. Punishing a contemner advocate, while
c;lealing with a conte:mpt of court case by suspen~ing his
licence to practice, a power otherwise statutorily available
only to the Bar Council of India, on the ground that the
contemner is als<>- an advocate, is, therefore, not
c permissible in exercise of the jurisdiction under Article 142.
The construction <>f Article 142 must be functionally
informed by the salutary purpose of the Article, viz., to do
complete justi'ce between the parties. It cannot be
otherwise. As already noticed in a case of contempt of
court, the contemnm and the court cannot be said to be
D
litigating parties."

Reliance was also placEld by the learned SeniofCounsel, fer
the same objective, on P. Ratnachandra Rao v. State of
Kamataka, (2002) 4 SCC 578. In order to understand the exact
E purport of the decision, l·earned counsel invited our attention to
the factual position which constituted. the basis of the above
adjudication. The factual position has been expressed in
paragraph 2 of the abovia judgment, which is being reproduced
hereunder:-
F
."2. In Criminal Appeal No.535/2000 the appellant was
working as an Electrical Superintendent in the Mangalore
City Corporation. For the check period 1.5.1961 to
25.8.1987 he was found to have amassed assets
. disproportionate to his known sources of income. Charge-
G
sheet accusing hirn of offences under Section 13(1)(e)
read with Section 13(2) of the Prevention of Corruption Act,
1988 was filed on 15.3.1994. The accused appeared
before the Special Court and was enlarged on bail on
6.6.1994. Charges were framed on 10.8.1994 and the
H
SUBRATA ROY SAHARA v. UNION OF INDIA 673
[JAGDISH SINGH KHEHAR, J.]
case proceeded for trial on 8.11.1994. However, the trial A
did not commence. On 23.2.1999 the learned Special
Judge who was seized of the trial directed the accused to
be acquitted as the trial had not commenced till ttien and
the period of two years had elapsed which obliged him to
acquit the accused in terms of the directions of this court 8
in Raj Deo Sharma Vs. State of Bihar (1998) 7 SCC 507
(hereinafter, Raj Deo Sharma-I). The State of Karnataka
through the D.S.P. Lokayukta, Mangalore preferred an
appeal before the High Court putting in issue the acquittal
of the accused. The learned Single Judge of the High c
Court, vide the impugned order, allowed the appeal, set
aside the order of acquittal and remanded the case to the
Trial Court, forming an ·opinion that a case charging an
accused With corruption was an exception to the directions
made in Raj'Deo Sharm;:i-1 as clarified by this Court in Raj
D
Deo Sharma (II) Vs. State of Bihar (1999) .7 SCC 604.
Strangely enough the High Court not only condoned a
delay of 55 days in filing the appeal against acquittal by
the State but also allowed the appeal itself - both without
even issuing notice to the accused. The aggrieved
E
accused has filed this appeal by special leave. Similar are
the facts in all the other appeals. Shorn of details, suffice.
it to say that in all the appeals the aC?cused persons who.
. were facing corruption charges, were acquitted by the
· Special Courts for failure of commencement of trial in spite
of lapse of two years from the date of framing of the F
charges and all the State appeals were allowed by the High
Court without noticing the respective accused persons."

llJ the factual scenario noticed hereinabove, this Court recorded
its conclusions, in respect of the power available to G
Constitutional Courts, by recording the following observations:-

"27. Prescribing periods. of limitation at the ehd of which
the trial court would be obliged to terminate the
proceedings and necessarily acquit or discharge the
H
674 SUPREME COURT REPORTS (2014] 12 S.C.R.

A accused, and further, making such directions applicable to
all the cases in the present and for the future amounts to
legislation, which, in our opinion, cannot be done by judicial
directives and within the arena of the judicial law-making
power available to CC>nstitutional courts, howsoever liberally
B we may interpret Articles 32, 21, 141 and 142 of the
Constitution. The dividing line is fine but perceptible. Courts
can declare the law, they can interpret the law, they can
remove obvious lacunae and fill the gaps but they canhot
.entrench upon in th1~ field of legislation properly meant for
c the legislature. Binding directions can be issued for
enforcing the law a1nd appropriate directions may issue,
including laying down of time limits or chalking out a
calendar for proceedings to follow, to redeem the injustice
done or for taking c:are of rights violated, in a· given case
or set of cases, depending on facts brought to the notice
D
of the court. This i11 permissibie for judiciary to do. But it
may not, iike legislature, enact a provision akin to or on
the lines of Chapter XXXVI of the Code of Criminal
Procedure, 1973."

E It was, therefore the vehement contention of the learned
counsel for the petition1er, that the order passed by this Court
was clearly impermissible, not only under the provisions of the
CPC, but also in term:s of the Supreme Court Rules, 1966,
coupled with t~e legal position declared·by this Court. ·
•
F
66. Before endeavouring to deal with the submissions
advanced at the hands of the learned counsel for the petitioner,
on the basis of Section 51 of the CPC, and other allied
provisions referred to h1ireinabove, it is relevant to keep in mind,
G that the orders dated 31.8.2012 and 5.12.2012 (the·
implementation whereof is subject matter of consideration),
arose out of proceedings initiated by the SEBI (FTM), under
the SEBI Act. In the context under reference, it is necessary to
peruse Sections 11 (3), 15U and 15Y of the SEBI Act. The
same are accordingly being extracted hereunder:-
H
SUBRATA ROY SAHARA v. UNION OF INDIA 675
[JAGDISH SINGH KHEHAR, J.]
"11 (3) Notwithstanding anything contained in any other law A
for the time being in force while exercising the powers
under 22 clause (i) or clause (ia) of sub-section (2) or sub-
section (2A), the Board shall have the same powers as are
· vested in a Civil Court under the Code of Civil Procedure.
1908 (5 of 1908), while trving a suit, in respect of the B
following matters. namely:

(i) the discovery and production of books of account and
other documents, at such place and such time as may be
specified by the Board;
c
(ii) summoning and enforcing the attendance of persons
and examining them on oath;

(iii) inspection of any books, registers and other documents
of any person referred to in section 12, at any place; o
(iv) inspection of any book. or register. or other document
or record of the company referred to in sub-section (2A);

(v) issuing commissions for the examination of witnesses
or documents. E

15U. Procedure and powers of the Securities Appellate
Tribunal-

(1) The Securities Appellate Tribunal shall riot be bound
by the procedure laid down by the Code of Civil Procedure. F
1908 (5 of 1908), but shall be guided by the principles of
natural justice and, subject to the other provisions of this
Act and of any rules, the Securities Appellate Tribunal shall
have powers to regulate their own procedure including the
places at which they shall have their sittings. G

(2) The Securities Appellate Tribunal shall have. for the
purposes of discharging their functions under this Act. the
same powers as are vested in a Civil Court under the
Code of Civil Procedure. 1908 (5 of 1908), while trying a H
676 SUPREME COURT REPORTS [2014] 12 S.C.R.

A suit, in respect of the following matters, namely:

(a) summoning and enforcing the attendance of any
person and examining him on oath;

(b) reauiring the discovery and production of
B documents;

(c) receiving evidence on affidavits;

(d) issuing commissions for the examination of
witnesses or documents;
c
(e) reviewing its decisions;

(f) dismissing an application for default or deciding
it ex parte; '
D
(g) setting aside any order of dismissal of any
application for default or any order passed by it ex
pa rte;

(h) any other matter which may be prescribed.
E
(3) Every proceeding before the Securities
Appellate Tribunal shall be deemed to be a judicial
proceeding within the meaning of sections 193 and
228, and for the purposes of section 196 of the
Indian Penal Gode (45of1860), and the Securities
F
Appellate Tribunal shall be deemed to be a Civil
Court for all the purposes of section 195 and
Chapter XXVI of the·Code of Criminal Procedure,
1973(2 of 1974).
G 15Y. Civil Court not to have jurisdiction -

No Civil Court shall have jurisdiction to entertain any
suit or procee1ding in respect of any matter which
an Adjudicating Officer appointed under ttiis Act or
H a Securities Appellate Tribunal constituted under
SUBRATA ROY SAHARA v. UNION OF INDIA 677
[JAGDISH SINGH KHEHAR, J.]
this Act is empowered by or under this Act to A
determine and no injunction shall be granted by any
court or other authority in respect of any action
taken or to be taken in pursuance of any power
conferred by or under this Act."
B
(emphasis is ours)

A perusal of the above provisions reveals, that the functionaries
under the SEBI Act, have been vested on some subjects, with
the same powers, which are available to a Civil Court under
the CPC. This necessarily leads to the inference, that other C
provisions of the CPC are per se, not applicable to the subjects
not covered by the above provisions. Similarly, for the SAT, it
has been specially provided, that the provisions of the CPC will
be inapplicable to it, however, in its functioning it would be
guided by the principles of natural justice. The above provision D
also vests in the SAT, some powers as are vested in a Civil
Court. Obviously therefore, on the remaining subjects the
provisions of the CPC would not be applicable. Since the
.provisions in the CPC relating to execution have not.been made
applicable for enforcement of orders passed under the SEBI E
Act, the conclusion has· to be, that the same (including the
provisions referred to by learned counsel), would not be
applicable for the enforcement of orders passed under the SEBI
Act. Furthermore, Section 15Yofthe SEBI Act bars Civil Courts
from entertaining any suit or proceeding, in respect of a F
controversy governed by the SEBI Act. It is, therefore apparent,
that the provisions of the CPC are per se inapplicable to
proceedings under the SEBI Act.

67. It is however important to notice, that the SEBI Act
does not provide either to the SEBI or the SAT, power for G
execution of orders passed by either of them. Therefore, no
such power could be exercised by the above fora for executing
even the appellate order(s) passed by this Court under Section
15Z of the SEBI Act. It was when the legal position stood thus,
H
678 SUPREME COURT REP<?~TS (2014] 12 S.C.R:

A that the question of exec:ution of the orders dated 31.8.2012
and 5.12.2012 arose (during the pendency of Contempt Petition
"·
(Civil) nos. 412 and 413 of 2012 and Contempt Petition (Civil)
no. 260 of 2013).
• . t .
B 68. It is in the above background, that we shall first
determine the submissions advanced by learned Senior
Counsel, based on Section 51 of the CPC. First and foremost,
the procedure contemplated under Section 51 of the CPC has
not been adopted by the SEBI Act, either expressly or impliedly.
Secondly, Section 51, d(~als with the power of a Civil Court to
C enforce execution of nioneycdecrees rendered by a Civil Court.
Herein, we are concerned .with the execution of orders
emanating from the provisions of the SEBI Act, and not out of
orders in proceedings, initiated before a Civil Court. Insofar as
the SEBI Act is concerned, as already noticed hereinabove,
D Section 15Y totally excludes the jurisdiction of Civil Courts, in
respect of subjects governing investors' interest and the
regulation of the securities market. There can, therefore be no
doubt that Section 51 of the CPC is per se inapplicable to the
controversy in hand.
E
69. There can however be no doubt, that even though the
provisions of the CPC are inapplicable to proceedings under
the SEBI Act (except when expressly provided for), yet we all
understand, that the provisions of the CPC have evolved as a
F matter of long years of experience emanating out of the
common law of England. Even though the same may not be
binding, insofar as the present controversy is concerned, yet if
an order is passed keeping in mind the parameters laid down
in the CPC, it would be sufficient to conclude that the rules of
G natural justice were fullir complied with. We are of the view that
the conditions contemplated in Section 51 of the CPC as
preconditions, for the arrest and detention of a judgment-debtor
for executing a Court's order, can be demonstrated as having
been duly complied with, before this Court passed the
H impugned order dated 04.03.2014. The proviso to Section 51
SUBRATA ROY SAHARA v. UNION OF INDIA 679
[JAGDISH SINGH KHEHAR, J.)
of the CPC contemplates certain preconditions for execution A
of a money-decree by way of arrest and detention in prison.
As already discussed above, on the satisfaction of any one of
the preconditions, a money-decree can be executed, by
ordering arrest and detention of the judgment-debtor in prison.
B
70. The first situation contemplated by the proviso to
Section 51 of the CPC is, when the executing Court entertains
the view, that the judgment-debtor is likely to abscond or leave
the local jurisdiction of the Court, with the object of obstructing
or delaying the execution of the decree. Insofar as the instant C
aspect of the matter is concerned, it is apparent that this Court
actually entertained the view, that the petitioner was "likely" to
abscond or leave the local limits of the jurisdiction of this Court,
for obstructing or delaying the execution of the decree. It is,
therefore, that·this Court by its order dated 28.10.2013 directed,
that" ... the alleged contemnors (respondents) shall not leave D
the country without the permission of this Court... ". Even though
the above order was subsequently relaxed by this Court on a
request made by the petitioner, yet once again on 21.11.2013,
this Court directed" ... the alleged contemnors shall not leave
the country without the permission of this Court.". The first of E
the postulated preconditions for ordering arrest and detention
of a judgment-debtor, for the execution of the liability resting on
the shoulders of the two companies, was therefore clearly made
out, before the impugned order dated 4.3.2014 was passed.
F
71. Another alternative pre-condition contemplated in the
proviso to Section 51 of the CPC is, when a judgment-debtor
has the means to pay the amount of the decree (or some
substantial part thereof), and yet refuses cir neglects to pay the
same. Insofar as the instant aspect of the matter is concerned, G
the two concerned companies could have easily paid the
contemplated amounts, by selling their assets (in terms of their
affidavit dated 4.1.2012). It is also relevant to mention, that in
the affidavits filed by the two concerned companies before the
SAT on 14.9.2011 (taken from Volume II of additional
H
680 SUPREME COURT REPORTS• [2014] 12 S.C.R.
'
A documents filed by the respondents in Contempt Petition (Civil)
no. 412 of 2012), it was acknowledged on behalf of the two
companies, that the book value/market value of their properties
as on 30.8.2011 were as under:-

Book Value Market Value
B
(Rs. in Crores) (Rs. in Crores)

SIRECL

i) Investments 6,430 36,021
c ii) Cash/Current Assets etc. 15,937 20,297

SHICL

i) Investments 1,865 5,498
D
ii) Cash/Current Assets etc. 6,027 7,682

Total 30,259 69,498

The market value of the assets acknowledged by the two
E companies, would nave undoubtedly appreciated fu.rther, from
the figures depicted in 2.011. During the course of hearing
before this Court, on sev•sral occasions it was undertaken by
the contemnors, that they would dispose of the unencumbered
immovable properties owned by the Sahara Group, to comply
F with the orders dated :31.8.2012 and 5.12.2012. In this
background it may also b!l mentioned, that the official website
of Sahara India, indicates; the net worth of the Sahara·Group
as Rs.68, 174/- crores. According to the above website, the
Sahara Group has a land bank of approximately 36,631 acres,
G and the inarket value of tl1e Group assets/potential earning is
to the tune of Rs.1,52,518 crores. It is also not a matter of
dispute, that the Sahara Group owns premium hotels in London
(the Grosvenor House) and in New York (the New York Plaza).
The above hotels, according to the Sahara Group, are valued
at over several thousand crores of rupees. Be that as it may,
H
SUBRATA ROY SAHARA v. UNION OF INDIA 681
(JAGDISH SINGH KHEHAR, J.]
after the passing of the orders dated 31.8.2012 and 5.12.2012, A
no payment has been made by the two concerned companies ..
The last deposit of Rs.5120 crores was made on 5.12.2012. It
is, therefore apparent, that inspite of their means to pay, the
two companies have refused and neglected to pay the amount
due in its entirety (or even a substantial part thereof). Another B
postulated pre-condition for ordering the arrest and detention
of a judgment-debtor, for the execution of a money-decree, was
therefore clearly made out, before the impugned order dated
04.03.2014 was passed.

72.We are prima facie satisfied, that yet another pre-
c
condition contemplated in the proviso to Section 51 of the CPC
was also made out. The reason for expressing the instant view
is, that no clear responses were ever given by the two
companies. The position remained the same whether those
answers were sought by the SEBl(FTM), or the SAT; or even D
by this Court. When SIRECL was required to disclose the
manner in which it had made payments by way of redemption
to the OFCD's holders, the following sources were disclosed:-

Rupees E
(In Crores)

1. Sahara Credit Co-operative Society Ltd. 13,366.18

2. Sahara India Commercial Corporation 4384.00
Limited F

'3. Sahara Q Shop
•
4. Ketak City Homes Ltd.
2258.32

19.43

5. Kirit City Homes Ltd. 44.05 G

Likewise, when similar information about redemptions was·
sought from SHICL, the following sources were disclosed:-

H
682 SUPREME COUHT REPORTS (2014] 12 S.C.R.

A Rupees
(In Crores)

1. SICCL 2479.00

2 .. Sahara Q Shop 2411.90
B
'
At the cost of repetition we may record, that when asked
the manner in which the cC1mpanies had forwarded the above
mentioned payments to the two companies, the response was,
that the above amounts were never released, but were
c transferred to Sahara India (Firm), for disbursement. When
details of the above transactions were sought, the Court was
informed that the above transactions were made by way of cash,
and the requirement of the Court to show banking transactions,
was unfair. When asked how the two· companies had collected
0 the cash funds, which were paid to,Sahara India (Firm), the
response was, that the two companies which had collected the
funds, had collected the same by way of cash. When asked how
disbursements were made to the investors, the response was,
that about 95% of the payments made to the investors, were
E also made by way of cash. To demonstrate the receipt and
payment of the funds by way of cash, learned Senior Counsel
representing the contemnors (including the petitioner herein),
invited our attention to thei books of accounts (only general
ledger entries) to demonstrate proof of the transactions under
F reference. Details in this behalf have been recorded by us under
the heading "A few words, about the defence of redemption of
OF CD's, offered by the two companies". The above explanation
may seem to be acceptable~ to the c<>*mnors, but our view is
quite the converse. It is no'( possible, for us to accept, that the
funds amounting to thousands of crores, were transacted by way
G of cash. We would, therefore, on the face of it, reject the above
explanation tendered on behalf of the two companies. It is
necessary to notice, that one of the preconditions contemplated
under the proviso to Section 51 postulates, that if the judgment-
debtor dishonestly transfers, conceals or removes any part of
H
SUBRATA ROY SAHARA v. UNION OF INDIA · 683
[JAGDISH SINGH KHEHAR, J.]
his property, or commits any act of bad faith in relation to his A
property, the concerned executing Court can enforce a money-
decree, by way of arrest and detention. Since a farcical
explanation was tendered by the two companies in respect of
receipt, payment and transfer of thousands of crores of rupees
by way of cash, without reference to any banking transactions B
whatsoever, it was legitimate to infer dishonest transfers, as well
as, bad faith, on behalf of the contemnors. Therefore, for yet
another reason, it was open for this Court, to order arrest and
detention of the contemnors (including the present petitioner),
for enforcement of the directions issued by this Court on c
31.8.2012 and 5.12.2012.

73. The three preceding paragraphs clearly demonstrate,
that three different conditions contemplated in the proviso to
Section 51 of the CPC, were satisfied, before we ordered the
arrest and detention of the contemn ors, for enforcement of the D
orders passed by this Court. Satisfaction of any one of the
conditions, expressed in the foregoing three paragraphs, would
have been sufficient to order the arrest and detention of the
petitioner, under Section 51 of the CPC. Our instant
determination should not be understood to mean, that Section E
51 of the CPC is applicable to the facts and circumstances of
this case. The instant determination should only be understood
to mean, that the parameters laid down in Section 51 of the
CPC, stood fully satisfied, before the arrest and detention order
dated 4.3.2014 was passed. · F

74. For the same reasons as have been recorded in the
foregoing paragraph, even rules 37 and 40 of Order XX.I of the
CPC, would be inapplicable for the execution of this Court's
orders dated 31.8.2012 and 5.12.2012. Firstly, because the G
above provisions of the CPC, relating to execution, have not
been made applicable for enforcement of orders passed under
the SEBI Act. .Secondly, a perusal of rule 37(1) of Order XX.I of
the CPC reveals, that where a Court is satisfied that the
judgment-debtor is likely to abscond or leave the local limits of H
684 SUPREME COURT REPORTS (2014] 12 S.C.R.

A the jurisdiction of the Court, the procedural requirements of the
aforesaid rules is expre~;sJy excluded. Likewise, sub-rule (2) of
rule 37 of Order XXI of the CPC provides, that the procedural
requirements depicted therein, wquld be inapplicable when the
judgment-debtor does not enter appearance before a Court in
B obedience of a notice issued to him. The impression of this
Court, that the appellant would abscond, and the fact, that the
appellant did not enter appearance when summoned to do so,
is apparent from the orders passed by this Court (already
extracted above). Yet, at the cost of repetition, we may
c reiterate, that by an order dated 28.10.2013, this Court directed,
that" ... the alleged contemnors (respondents) shall not leave the
country without the permission of this Court... ". Even though the
above order was relaxed by this Court on a request made by
the petitioner, yet once again on 21.11.2013 this Court directed
"... the alleged contemnors shall not leave the country without
0
the permission of this Court ..". The above restraint order was
subsisting when the petitioner's order of arrest and detention
was passed. Furthermore, having expressed its satisfaction,
that the information furnished by the contemnors (including the
petitioner) did not establish the stance adopted by them, this
E Court by its order dated 20.2.2014'noticing the defiant and non-
cooperative attitude of the contemnors, had directed "the
personal presence of the alleged contemnors and the directors
of the respondent companies in Court on February 26, 2014
at 2.00 pm ... " On 25.2.2014, a mention was made on behalf
F of the petitioner herein, for exemption from personal presence
on 26.2.2014. The same was declined. Despite the above
refusal, Mr. Subrata Roy Sahara did not enter appearance
before this Court on 26.2.2014. The other directors were
present. Thus there is no room for any doubt, that the above
G provision was rendered inapplicable, insofar _as the petitioner
is concerned. A perusal of rule 40 of Order XXI of the CPC
reveals, that the procedural requirements exprE'lssed in the
same, would come into play inter alia, after the person
concerned" ... is brought before the Court after being arrested
H in execution of a decree· for payment of money ... ". Reference
SUBRATA ROY SAHARA v. UNION OF INDIA 685
[JAG DISH SINGH KHEHAR, J.]
to above rule, on behalf of the petitioner, is therefore wholly A
misconceived. The above deliberations, should not be
understood to mean, that the aforesaid provisions of the CPC,
relied upon by the learned counsel, were applicable to this case.
The above deliberations only demonstrated, that the
parameters laid down in the above provisions cannot be stated B
to have been disregarded, when the impugned order dated
4.3.2014 was passed.

75. Insofar as rule 6 of Order XIII of the Supreme Court
Rules, 1966, is· concerned, the same mandates the
enforcement of an order passed by this Court, by transmitting C
the order to be enforced to the "Court or Tribunal in the way
prescribed by law". We have already concluded hereinabove,
that no executing mechanism was in place under the provisions
of the SEBI Act, when the orders dated 31.8.2012 and
5.12.2012 were passed. Thus viewed, even rule 6 of Order XIII D
of the Supreme Court Rules, 1966 would be inapplicable to
deal with the issue in hand, as it was not possible for this Court
to transmit "... to the Court or Tribunal from which the appeal
was brought ... " for execution of this Court's orders dated
31.8.2012 and 5.12.2012. E

76. The orders dated 31.8.2012 and 5.12.2012, could
therefore have only been executed by this Court, in exercise of
the power conferred on it under Articles 129 and 142 of the
Constitution of India. Passing an order under the above F
provisions was necessary to ensure the observance of due
process of law, in the facts and circumstances of this case, and
to maintain the majesty of law and the dignity of this Court. The
impugned order dated 4.3.2014 was accordingly passed
thereunder. The power of arrest and detention can be
exercised, as and when this Court is satisfied, in the facts and G
circumstances with which this Court is confronted in a given
case, that the above means should be adopted for the execution
of its orders.

H
686 SUPREME COURT REPORTS [2014) 12 S.C.R.
'

A 77. Irrespective of the submissions noticed hereinabove,
Mr. Ram Jethmalani, learned Senior Counsel appearing on
behalf of the petitioner, placed vehement reliance on the
judgment rendered by this Court in Jolly George Varghese &
Anr. v. Bank of Cochin, (1980) 2 SCC 360, so as to contend,
B that detention per se was impermissible for enforcement of a
money decree. Reliance was placed on the following
observations recorded in the above judgment:-

"10. Equally meaningful is the import of Article 21 of the
Constitution in the context of imprisonment for non-
c payment of debts. The high value of human dignity and the
worth of the human person enshrined in Article 21. read
·with Articles 14 and 19, obligates the State not to
incarcerate except under law which is fair, just and
reasonable in its procedural essence. Maneka Gandhi's
D case (1978) 1 SCC 248, as 'developed further in Sunil
Batra v. Delhi Administration, (1978) 4 SCC 494, Sita Ram
. and Ors. v. State of U.P., (1979) 2 SCC 656, and Sunil
Batra v. Delhi Administration (W.P: no. 1009 of 1979
decided on December 20, 1979), lays down the
E proposition. It is too obvious to need elaboration that to
cast a person in prison because of his poverty and
consequent inability to meet his contractual liability is
appalling. To be poor, in this land of daridra narayana, is
no crime and to recover debts by the procedure of putting
F one in prison is too flagrantly violative of Article 21 unless
there is proof of the minimal fairness of his wilful failure to
pay in spite of his sufficient means and absence of more
terribly pressing claims on his means such as medical bills
to treat cancer or other grave illness. Unreasonableness
G and unfairness in such a procedure is inferable from
Article 11 of the Covenant. But this is precisely the
interpretation we have 'put on the proviso to
Section 51 C.P.C. and the lethal biow of Article 21 cannot
strike down the provision. as now interpreted.
H
SUBRATA ROY SAHARA v. UNION OF INDIA 687
[JAGDISH SINGH KHEHAR, J.]
11. The words which hurt are "or has had since the date A
of the decree. the means to pay the amount of the decree".
This implies. superficially read. that if at any time after the
passing of an old decree the judgment-debtor had come
by some resources and had not discharged the decree.
he could be detained in prison even though at that later B
point of ti,;;e he was found to be penniless. This is not a
sound position apart from being inhuman going by the
stafldards of Article 11 (of the Covenant) and Article 21 (of
the Constitution). The simple default to discharge is not
enough. There must be some element of bad faith beyond c
mere indifference to pay. some deliberate or recusant
disposition in the past or. alternatively, current means to
pay the decree or a substantial part of it. The provision
· emphasizes the need to establish not mere omission to
pay but an attitude of refusal on demand verging on
D
dishonest disowning of the obligation under the decree.
Here considerations of the debtor's other pressing needs
and straitened circumstances will play prominently. We
would have. by this construction. sauced law with justice,
harmonized Section 51 with the Covenant and the
Constitution. E

12. The question may squarely arise some day as to
whether the proviso to Section 51 read with Order 21. Rule
· 37 is in excess of the Constitutional mandate in
Article 21 and bad in part. In the present ·case since we F
are remitting the matter for reconsideration, the stage has
not yet arisen for us to go into the vires, that is why we are
desisting from tha'i essay.

· 13. In the present case the debtors are in distress because G
of the blanket distraint of their properties. Whatever might
have been their means once, that finding has become
obsolete in view of later happenings. Sri Krishnamurthi Iyer
for the respondent fairly agreed that the law being what we
have stated, it is necessarv to direct the executing court
H
688 SUPRE.ME COURT REPORTS [2014] 12 S.C.R.

A to re-adjudicate on the present means of the debtors vis-
a-vis the present pressures cif their indebtedness. or ·
alternatively whether they have had the abilitv to pay but
have improperly evaded or postponed doing so or
otherwise dishonestly committed acts of bad faith
B respecting their assets. The court will take note of other
honest and urgent pressures ori their assets, since that is
the exercise expected of the court under the proviso to
Section §1. An earlier adjudication will bind if relevant ·
circumstances have not materially changed."
c (emphasis is ours)

We have given our thoughtful consideration to the
submissions advanced at the hands of the learned counsel for
the petitioner, based on the judgment rendered by this Court
D in Jolly George Verghese's case (supra). We are of the view,
that the conclusions to which our attention has been invited,
must be viewed with reference to the factual matrix, as also,
the actual consideration which had resulted in the above
determination. In the instant view of the matter, the factual matrix
E taken into consideration emerges from the following narration
in Jolly George Verghese's case (supra):-

"1. This litigation has secured special leave from us
because it involves a profound issue of constitutional and
international law and offers a challenge to the nascent
F champions of human rights in India whose politicized pre-
occuoation has forsaken the civil debtor whose personal
liberty is imperilled by the judicial process· itself, thanks to
Section §1. (Proviso) and Order 21, Rule 37, Civil
Procedure Code. Here is an appeal by judgment-debtors-
G the appellants - whose personal freedom is in peril
because a court warrant for arrest and detention in the civil
prison is chasing them for non-payment of an amount due
to a bank - the respondent. which has ripened into a
decree and has not yet been discharged. Is such
H deprivation of liberty illegal?
SUBRATA ROY SAHARA v. UNION OF INDIA 689
[JAGDISH SINGH KHEHAR, J.]
JOO( JOO( JOO( JOO( JOO( A

4. The facts. The judgment-debtors (appellants) suffered
a decree against them in O.S. No. 57of1972 in a sum of
Rs.2.5 lakhs, the respondent-bank being the decree-
holder. There are two other money decrees against the B
appellants (in O.S. 92 of 1972 and 94 of 1974), the total
sum payable by them being over Rs.7 lakhs. In execution
of the decree in question (O.S. 57 of 1972) a warrant for
arrest and detention in the civil prison was issued to the
appellants under Section_ 51 and Order 21, Rule. 37 of the
Civil Procedure Code on June 22, 1979. Earlier, there had C
been a similar warrant for arrest in execution of the same
decree. Besides this p;ocess; the decree-holders had
proceeded against the properties of the judgment-debtors
and in consequence, all these immovable properties had
been attached for the purpose of sale in discharge of the D
decree debts. It is averred that the execution court has also
appointed a Receiver for the management of the
properties under attachment. In short, the enjoyment or
even the power to alienate the properties by the judgment-
debtors has been forbidden by the court direction keeping E
them under· attachment and appointing a Receiver to
manage them. Nevertheless, the court has issued a
warrant for arrest because, on an earlier occasion, a
similar warrant had been already issued. The High Court,
in a short order, has summarily dismissed the revision filed F
by the judgment-debtors against the order of arrest. We
see no investigation having been made by the executing
court regarding the current ability of the judgment-debtors
to clear off the debts or their mala fide refusal, if any, to
discharge the debts. The question is whether under such G
circumstances the personal freedom of the judgment-
debtors can be held in ransom u_ntil repayment of the debt,
and if Section 51 read with Order 21, Rule 37, C.P.C. does
warrant such a step, whether the provision of law is
constitutional, tested on the touchstone of fair procedure H
690 SUPREME COURT REPORTS [2014] 12 S.C.R.

A under Article 21 and in conformity with the inherent dignity
of the human person in the light of Article 11 of the
International Covenant on Civil -and Political Rights. A
modern Shylock is shackled by law's humane handcuffs.

B
xxx )()()( )()()( xxx . xxx
9. We concur with the Law Commission in its construction
of Section 51 C.P.C. It follows that quoni:tom affluence and
current indigence without intervening dishonesty or bad
. faith in liquidating his liability can be consistent with Article .
C 11 of the Covenant, because then no detention is
permissible under Section 51, C.P .C."

(emphasis is ours)

Having perused the judgment re'ndered by this Court in Jolly
0
George Verghese's case (supra), we are of the view, that the
conclusions recorded therein, hf!ve a pointed and definite
reference to the ability of a judgment-debtor, to pay off his debt.
The conclusion drawn in the above judgment, was with respect
to a judgment-debtor, who was unable to pay off his debt.
E Accordingly it was felt, that an order of detention in prison should
not be adopted, to effectuate the execution of the decree. While
deaiing with the preconditions expressed in the proviso to
Section 51 of the CPC, we have already concluded, that the
Sahara Group has enormous assets with a huge market .and
F marketable value. It is also clear that after 5.12.2012, the two
companies have not deposited a single paisa, in furtherance
of the compliance of this Court's orders (dated 31.8.2012 and
5.12.2012). It is therefore clear, that despite the petitioner (and
the other companies) having means to pay, they have unfairly
G and willfully failed to pay. It is, therefore also clear, that the
petitioner in the present case is not similarly situated as the
petitioner in Jolly George Verghese's case (supra). Accordingly
reliance placed by the learned counsel for the petitioner on the
above judgment, is wholly misconceived.
H
SUBRATA ROY SAHARA v. UNION OF INDIA 691
[JAGDISH SINGH KHEHAR, J.]
VII. ·whether the impugned order dated 4.3.2014, A
was passed in violation of the rules of natural
justice?

78. While arguing on merits, the very first plea advanced
on behalf of the petitioner was, that the order of detention
8
dated 4.3.2014 was passed all of a sudden, without affording
any opportunity to the petitioner. Dr. Rajeev Dhawan, learned
Senior Counsel, who spearheaded submissions on the instant
issue, informed this Court, that an order passed without
· affording an opportunity of hearing, by any authority whosoever
(including this Court), would be constitutionally unacceptable, C
and therefore void. The order dated 4.3.2014, according to
learned Senior Counsel, was passed without affording the
petitioner any opportunity to know why, and also, without any
effective opportunity to respond to, whatever was the basis of
passing such order. The petitioner, according to learned D
counsel, is till date not aware of the reasons which had
prompted this Court to pass the impugned order dated
4.3.2014. He apologized to us, while informing us, that he had
no option but to be blunt. Referring to the impugned order, he
reiterated, "Your Lordships have passed a draconian order". E
Learned Senior Counsel in the above context, asserted, that
this Court had made a "... terrible terrible mistake ... , which
needed to be corrected ... ". In this behalf his submission was,
that "... to err was human .. ." and his advice was, that· ... it is
imperative for you, to correct this blunder. . .". In supporting the F
above contention advanced by Dr. Rajeev Dhawan, Mr. Ram
Jethmalani, learned Senior Counsel, also representing the
petitioner, submitted, that • ... the whole Bar was shell-
shocked ... ", when this Court out of the blue, directed the arrest
of the petitioner, without affording him any opportunity to state G
his case. It was the contention of the learned Senior Counsel,
that the order passed by this Court on 4.3.2014 was
"... extremely disturbing .. .". It was submitted, that there was no
hearing of the matter. Suddenly on the conClusion of the day's
hearing on 4.3.2014, "... when there was still much to be H
692 SUPREME COURT REPORTS [2014) 12 S.C.R.

A said ... ", a judicial order was passed, to the detriment of the
petitioner" ... depriving him of his civil liberties ... ". The order,
it was contended, " ... was an absolute nullity ... ". Learned
counsel advised the Court, " ... humility was the greatest
attribute of human resource ... ", and as such," ... you must have
B the courage to accept, that the order dated 4.3.2014 was a
nullity in law... , and you should have the courage to recall your
void order .. .". We were also advised, that the mandate
expressed in Article 142 of the Constitution of India (under
which provision, the order dated 4.3.2014, was passed), " ...
C was to do justice according to law, and not by whim or
caprice ... ". During the course of hearing, learned counsel for
the petitioner, addressed a number of queries to the Bench.
Has any person ever been committed to jail, without knowing
what offence he had committed? The whole of the criminal law
is codified, has anybody ever been incarcer.ated, except
D according to the procedure laid down in the Cr.P.C.? What
offence, punishable under what provision of law, has the
petitioner committed, that you have sent him to jail? Can an
order of arrest and ·detention be passed orally... , without there
being any writing ... , without there being any notice.:., without
E any opportunity to reply to the same? "... You have done all this,
and more ... ", we were told. What has been done by this Court
on 4.3.2014, according to learned counsel, was a blunder
which needed to be revised. Dr. Rajeev Dhawan then affirmed,
confirmed and repeated what his colleague had submitted. He
F informed us, " .... Mr. Ram Jethmalani is right... we all make
mistakes .. .". He went on to state:· ... we tell very rarely, what
we have had to tell this Bench, that it has gone terribly terribly
wrong .. ." He, however, reminded us, that every extraordinary
situation, has to be dealt with, in an equally extraordinary
G manner i.e., in exactly the manner he had done. By informing
the Court upfront, that it had erred, and therefore, the mistake
committed by it, needed to be corrected, Mr. Ram Jethmalani ·
in the above context told the Court, "Acknowledgement of a
mistake enhances the prestige of the Court. I hope your
H Lordships will acknowledge this mistake."
SUBRATA ROY SAHARf. v. UNION OF INDIA 693
(JAGDISH SINGH KHEHAR, J.]
79. Seriously, we were taken aback by the ferocity with A
which, the above submissions were advanced. Had we been
a part of the audience, we would have acclaimed the courage
and the capacity of learned Senior Counsel, to be able to call
a spade a spade. We would have felt, that their eminence was
rightfully bestowed on them, and well deserved. That of course, B
would have been subject to the condition, that what was sought
to be conveyed through erudite grandiloquence, was factually
correct. The question therefore that needs to be considered is,
whether the above submissions made by the learned counsel
for the petitioner, are based on a truthful foundation. If their · c
assertions are correct, we would concede at the beginning, that
their inferences would have to be accepted as correct.

80. Mr. Arvind Datar, learned Senior Counsel appearing
for the SEBI would contend, that there was nothing farther from
the truth, in what had been submitted on behalf of the petitioner. D
We were taken through piles of pleadings, paper work, and
orders passed by this Court, to demonstrate an express written
notice to the petitioner, his written response, numerous
opportunities of hearing afforded to learned Senior Counsel
representing him, and finally, even an opportunity of personal· E
oral hearing to the petitioner - Mr. Subrata Roy Sahara, himself.

81. Before examining the veracity of the submissions
advanced by the learned Senior Counsel for the petitioner, we
would unhesitatingly concede, that they were correct on one F
aspect of the matter. That it was an extraordinary situation. For
many many years now, ever since we moved from the Bar to
the Bench, we were the ones who were posing the questions,
and the warring factions projecting their conflicting claims
before us, were obliged to respond. Now for once, questions G
were being posed by a litigant asking the Court, for its
response. Not that we find anything wrong with that, only that
we too were shell-shocked, that we had committed a blunder,
as to be informed by learned counsel, that we had passed a .
void order, that needed to be corrected. We would like to H
694 SUPREME .COURT REPORTS (2014] 12 S.C.R.

.Aacknowledge, that all this was possible because of the legal
acumen possessed by learned Senior Counsel. If what was
stated was correct, no Court would have any hesitation to
correct such an error. The Court was an unconnected
disinterested party. The Court would neither gain nor lose, if the
B contentions advanced by the petitioner, were to be accepted.
In such an eventuality, by rendering the correction, the purpose
of law would be served, justice would be done. We would never
ever, refrain from rising- to such an occasion. But if the factual
position on the basis whereof the assertions were made, was
·c -
found to be incorrect, learned Senior Counsel would most
definitely have committed a terrible professional mistake. We
say so, because Mr. Ram Jethmalani and Dr. Rajeev Dhawan,
learned Senior Counsel, attended each date of hearing, of the
proceedings in Contempt Petition (Civil) nos. 412 and 413 of
D 2012 and Contempt Petition (Civil) no. 260 of 2013, and were
personally aware of the day to day happenings.

82. Now the merits of the contention. Interlocutory
Application nos. 68 and 69 of 2013 in Civil Appeal no. 9813
of 2011 were filed by the SEBl. The prayers made therein inter
E alia, read as und~r:-

"(d) pass an order permitting SEBI [WTM] to take
measures for arrest and detention in civil prison of
promoter of Saharas Shri Subrata Roy Sahara and
F the two male directors. viz .. Shri Ashok Roy
Choudhary and Shri Ravi Shankar Dubey after
giving reasonable opportunitv of tiearing.

(f) pass an order directing the promoter of SIRECL
and SHICL Shri Subrata Roy Sahara and their
G Directors. viz .. Shri Ashok Roy Choudharv. Shri
Ravi Shankar Dubey and Ms. Vandana Bhargava
to deposit forthwith their respective passport with
the Secretary General of this Hon'ble Court and not
to leave the countrv without the prior permission of
H this Hon'ble Court: and
SUBRATA ROY SAHARA v. UNION OF INDIA 695
[JAGDISH SINGH KHEHAR, J.]
(g) pass such other and/or. further order(s) as this A
Hon'ble Court may deem fit and proper in the facts
and circumstances of the case."

(emphasis is ()Urs)

In view of the above prayers made in Interlocutory B
Application nos. 68 and 69 of 2013, wherein notice was issued
to the petitioner, can it be said, that the petitioner had no notice?
Can it not be said; that there was a pending Interlocutory
Application expressly, seeking his arrest and detention? We
are fully satisfied, that the petitioner- Mr. Subrata Roy Sahara C
had due notice, as also, that he was fully alive to the basis and
reasons, why his arrest and .detention (along with the directors
of the two companies) was being sought.

83. The said Interlocutory Application nos. 68 and 69 of 0
2013 were taken up for consideration on 22.4.2013. Mr. Gaurav
Kejriwal, Mr. U.U: Lalit, and Mr. C.A. Sundaram, learned Senior
Counsel appearing for the contemnors undertook to file their
response to the above applications, within one week.
Accordingly, liberty was granted to Mr. Subrata Roy Sahara E
(and the other contemnors) to file their reply affidavits by
29.4.2013. The·petitioner herein - Mr. Subrata Roy Sahara,
actually filed his personal counter affidavit dated 8.5.2013 in
reply to Interlocutory Application nos. 68 and 69 of 2013. He
asserted in paragraph 2 of his affidavit as unaer:-
F
"... while so seeking relief for arrest and detention in a civil
. prison, depositing of passport etc., would not be warranted
in fact or in law. I submit that such reliefs are granted in
extreme cases of execution of decree only when it is
established that a judgment-debtor having the means to G
pay. is willfully and intentionally not paying the amount..."

(emphasis is ours)

In paragraph 4 of the counter affidavit filed by the petitioner -
H
696 SUPREME COURT REPORTS [2014] 12 S.C.R.

A Mr. Subrata Roy Sahara, to Interlocutory Application nos. 68
and 69 of 2013, it was. submitted:c,

"Without prejudice to the aforesaid, I further submit that,
there would be no warrant or justification for SEBI to seek
reliefs as they have prayed for. In the first place, all my
B
assets have already been attached by SEBI and
particulars of which are given to SEBI in compliance of its .
order. It is neither allegation of SEBI that I have secreted
away any assets, nor any part of moneys received by
SIRECUSHICL from the investors has been diverted to
c me. Whilst so there is no case made out by SEBI, for the
orders as sought by SEBI. Apart from the aforesaid. I also
submit that I am businessman. holding Indian passport
residing in India and most of my assets and businesses
are in India. My entire family and home. is also in India.
D While so there cannot be any apprehension, leave alone
reasonable apprehension/ground requiring my detention or
restrain on any travel as sought for. In absence of any such
reasonable apprehension, I submit that the application is
not bona fide and warranted in any manner whatsoever.".
E
(emphasis is ours)

His above affidavit ended with a prayer, that the relief
sought by SEBI ought not to be granted. In view of the above
personal counter-affidavit filed by the petitioner, is it not
F abundantly clear, that the petitioner was conscious of the
implications of the prayer made in Interlocutory Application nos.
68 and 69 of 2013? We are also satisfied, that he was also
fully conscious, of the provisions under which the prayer made
had to be examined, and therefore, relied upon the various
G technicalities of law, in his defence. He also placed, certain
personal factors on record in his defence. In other words, not
only was he aware of the reasons, why his arrest and detention
was sought, but he had availed of the opportunity to respond
to the same in writing. We are fully satisfied, that the petitioner
H - Mr~ Subrata Roy Sahara had'a notice depicting the reasons
SUBRATA ROY SAHARA v. UNION OF INDIA 697
[JAGDISH SINGH KHEHAR, J.]
why his arrest and detention was sought, and an opportunity to A
carefully respond to the same, by stating his defence in writing.

84. The matter was thereafter posted for hearing on
2.5.2013. Having found, that the petitioner - Mr. Subrata Roy
Sahara (and the other contemnors) were engaging themselves B
in unnecessary litigation arising out of our order dated
31.8.2012, the following interim order came to be passed on
2.5.2013:- •

"We are inclined to stay all further proceedings in Appeal
Nos. 42/2013 (Subrata Roy Sahara v. SEBI), 48/2013 C
(SHICL v. SEBI), 49/2013 (SIRECL v. SEBI) and 50/2013
(Ashok Roy Chaudhary & Ors. v. SEBI) pending before the
Securities Appellate Tribunal, Mumbai, and in Writ Petition
No. 2088/2013 pending before the High Court of
Judicature at Allahabad, Lucknow Bench, since we are D
examining the question, whether the respondents have
complied with the various conditions stipulated in our
judgment dated 31st August, 2012."

85. Interlocutory Application nos. 68 and 69 of 2013 E
continued to be listed on each date of hearing thereafter, i.e.,
on 2.5.2013, 8.5.2013 and 17.7.2013. To ensure, that the issue
of compliance of the orders passed by us on 31.8.2012, would
be listed only before this Court, we passed, inter alia, the
following order on 17.7.2013:-
F
"We call for the Appeals Nos.42/2013 (titled Subrata
Roy Sahara v. SEBI), 48/2013 (titled SHICL v. SEBI), 49/
2013 (titled SIRECL v. SEBI) and 50/2013 (titled Ashok
Roy Chaudhary & Ors., SEBI) pending before the
Securities Appellate Tribunal Mumbai and W.P. No.2088 G
of 2013 (titled Sahara India Lucknow & Anr., v. SEBI)
pending before the High Court of Judicature at Allahabad,
which shall stand transferred to this Court.

We make it clear that no High Court, Securities H
698 SUPREME COURT REPORTS (2014] 12 S.C.R.

A Appellate Tribunal and any other Forum shall pass any
orders against the orders passed by Securities and
Exchange Board of India (SEBI) in implementation of this
Court's judgment dated 31.08.2012."

B The above order was considered essential because it seemed
to us, that the petitioner was unnecessarily opening and
extending the litigation· pertaining to the execution of order
dated 31.8.2012, to otl'ler Fora including the High Court.

86. The matter was,then taken up for hearing on various
C dates including 24.7.2013, 30.7.2013, 6.8.2013, 13.8.2013,
26.8.2013, 2.9.2013, 16.9.2013, 4.10.2013 and 28.10.2013.
·On all the above dates, lnterlocutor}i Application nos. 68 and
69 of 2013, were actually posted for hearing. By now, enough
time had been afforded to the petitioner to solicit compliance
D of the orders passed by this Court. Rather than actual
compliance by making financial deposits, an alternative route
was sought to be treaded by Mr. C.A. Sundram, learned Senior
Counsel. Learned Senior Counsel informed us, that the
contemnors were willing to make available to the SEBI, the
E details of unencumbered properties worth Rs.20,000/- crores.
It was apparent, that the implied purpose to make available the
above properties was, to guarantee the payment ordered by
this Court on 31.8.2012 and. 5.12.2012. Noticing the above
factual position, this Court passed the following order:-
F . ''
"Mr. C.A. Sundaram, learned Senior Counsel appearing
for respondent No.5 (alleged contemnor), brought to our
notice letter dated October 17, 2013 received from the
Managing Director and CEO of the PNB Investment
Services Limited. The same is taken on record and is
G marked as 'Annexure-A'.

Mr. Sundaram, on the basis of the said letter and on
instructions received from the Sahara Group of
Companies, submitted that the alleged contemnors are
H willing to make available to SEBI the original title deeds
SUBRATA ROY SAHARA v. UNION OF INDIA 699
[JAGDISH SINGH KHEHAR, J.]
of unencumbered properties, worth '20,000 crores, along A
with proper valuation reports, within a period of three
weeks from today. SEBI, in turn, will examine the same
and make their response, which shall be considered by this
Court on the next date of hearing.
B
Till the above direction is complied with to the satisfaction
. of SEBI. the alleged contemnors (respondents) shall not
leave the country without the permission of this Court."

(emphasis is ours)
c
It is in furtherance of the prayer (f) made in Interlocutory
Application nos. 68 and 69 of 2013, that the above order came
to be passed on 28.10.2013, restraining the petitioner (and the
other contemnors) from leaving the country, without this Court's
permission. This Court through its above order, issued its first 0
disciplinary order. We had hoped, that the above order would
convey to the contemnors, the seriousness of the matter.

87. The matter was then taken up on 31.10.2013 and
1.11.2013. Having considered the submissions advanced on
behalf of the petitioner - Mr. Subrata Roy Sahara in Interlocutory E
Application no. 4 (in Contempt Petition (Civil) no. 260 of 2013
in Civil Appeal no. 8643 of 2012), that he needed to go abroad
urgently, in connectioh with some business commitments, we
permitted him the liberty to leave the country, with a clear
. direction, that he would return back before the expiry of the · F
period of three weeks, if the directions issued by us in the .order
dated 28.10.2013 were not complied with. An extract of the
above order dated 1.11.2013 is being reproduced hereunder:-

"For the reasons indicated in para 4 of the application, we G
make it clear that it is open for the alleged contemnor No.5
in Contempt Petition (Civil> Nos. 412 and 413 of 2012 to
go abroad. but. in the event of non-compliance of the
directions contained in the order dated October 28, 2013.
H·
700 SUPREME COURT REPORTS [2014] 12 S.C.R.

A he shall immediately return back and be present in the
country before the expiry of the period of three weeks. as
indicated in the said order."

(emphasis is ours)

B It is therefore apparent, that this Court did not wish any
harm to the petitioner. The requests made by him were duly
considered, and appropriate orders were passed, to ensure
that his business ventures would not be adversely affected.

c 88. The matter was taken up for hearing thereafter, on
20.11.2013 and 21.11.2013. On 21.11.2013, finding the
conduct of the petitioner and the other contemnors
unacceptable, and in complete disregard with the order passed
by us on 28.10.2013, we issued further directions on
0 21.11.2013 restraining the Sahara Group ofCompanies, from
parting with any movable or immovable properties, until further
orders. We further directed, that all the alleged contemnors
would not leave the country, without the prior permission of this
Court. In this behalf it would be relevant to mention, that the
E above order came to be passed because, the Court felt that
an attempt had been made to mislead the Court, by submitting
a false evaluation report. In this behalf we may record, that
learned Senior Counsel represeriting the SEBI had invited our ·
attention to an order passed by the Bombay High Court,
depicting that the main properties offered by the alleged
F contemnors, in compliance with the order dated 28.10.2013,
fell in the CRZ Zone, where no canstruction whatsoever was
permissible. An extract of the order dated 21.11.2013 !s
reproduced hereunder:-

G "We are convinced that the order dated 28.10.2013
passed by this Court has not been complied with in its
letter and spirit. In such circumstances, we direct that the
Sahara Group of Companies shall not part with any
movable or immovable properties until further orders. We
H
SUBRATA ROY SAHARA v. UNION OF INDIA 701
[JAGDISH SINGH KHEHAR, J.)
further direct that all the alleged contemnors shall not leave A
the countrv without the permission of this Court."

. (emphasis is ours)

This was another order, in the series of corrective and
deterrent orders passed by this Court, in the process of B
enforcement of our orders dated 31.8.2012 and 5.12.2012. This
Court through its above order, restrained the entire Sahara
Group of Companies, from transferring any of their movable or
immovable properties. Needless to mention, that the above
order was also clearly passed in furtherance of the prayer made C
in Interlocutory Application nos. 68 and 69 of 2013, which was
actually listed on the above date of hearing. This was another
order in the series of orders passed by this Court, which would
have certainly made the petitioner aware, that sequentially
harsher orders were being passed by this Court, in the light of D
the prayers made in the aforesaid Interlocutory Applications.

89. The matter was then listed for hearing on 11.12.2013,
17.12.2013, 2.1.2014 and 9.1.2014. On all the above dates,
Interlocutory Application nos. 68 and 69 of 2013 were also listed E
for hearing. On 9.1.2014, this Court passed the following order:-

"Heard counsel on either side.

Mr. C.A. Sundaram, learned Senior Counsel appearing for
one of the alleged contemnors, submitted that earlier this F
Court on December 11, 2013 has only reiterated the
submission made by Mr. Arvind Datar, learned Senior
Counsel appearing for SEBI, that they did not disclose the
source from which they got money for repayment, despite
SEBl's letter dated May 28, 2013. G

Mr. Sundaram is right in his submission. However, we feel
that it would be appropriate to give a direction of the nature
stated above.

Accordingly, we direct the alleged contemnors to disclose · H
702 SUPREME COURT REPORTS [2014] 12 S.C.R.

A the complete details and source from which they repaid
the amount to the investors as also the manner of making
payments. They shall also disclose the information which ·
SEBI has sought from them from time to time. Such ...
information shall be provided to SEBI. and also be filed in
B. this Court by January 23, 2014.

Put up on January 28, 2014 at 2.00 p.m.

In the meantime, SEBI shall verify the information provided
to it by the alleged contemnors."
c
It is imperative for us to give the background explaining
why the order extracted hereinabove came to be passed. In this
behalf it is relevant to mention, that Mr. Arvind Datar, learned
Senior Counsel appearing for the SEBI, had informed this
0 Court, that the contemnors including the petitioner herein, had
been asserting that they had refunded Rs.17,443 crores
(approximately) in the case of SIRECL and Rs.5,442 crores
(approximately) in the case of SHICL; but had not given any
details, nor produced any relevant record to show the source
E from which the two companies had collected the money, for
such huge repayments. This information, according to Mr.
Datar, had been sought by the SEBI from the alleged
contemnors through a letter dated 28.5.2013 (i.e., more than
six months prior to the passing of the above order). We were
of the view, that mentioning the aforesaid factual position was
F sufficient to prompt the two companies to furnish the abovesaid
details. The demeanour of the two companies has remained
the same, throughout. They hC!Ve never supplied any invec:or
related information. Not even such information, which would
have substantiated their own defence. It is this repeated
G behaviour, that_ has given us the repeated impression, that the
submissions advanced on behalf of the two companies, were
just a pack of lies. The fact that the companies had not furnished
the above details, was brought to our notice by Mr. Datar on
9.1.2014, prompting us to pass an express order directing the
H two companies, as also, the alleged contemnors including the
SUBRATA ROY SAHARA v. UNION OF INDIA 703
[JAGDISH SINGH KHEHAR, J.]
present petitioner - Mr. Subrata Roy Sahara, to .furnish the A
required particulars. The above order discloses the games the
two companies, and the alleged contemnors, have been
playing with this Court.

90. Thereafter the matter was taken up for consideration 8
on 28.1.2014, when we passed the following order:-

""Heard Mr. Ram Jethmalani, learned Senior Counsel and
Mr. Arvind P. Datar, learned Senior Counsel.

Mr. Datar submitted that the Saharas have not disclosed c
the details as to when the refund was made. Reference
was made to pages 6 to 9 of the reply affidavit filed today.

Mr. Datar further submitted that the SEBI rjilguii'es an
exglanation from Saharas with regard to the gayments
D
made on behalf of Sahara India Real Estate Comoration
Ltd. (SIRECL) (gartnershiQ firm) by the following firms, as
mentioned below:-
Rupees
(In Crores) E
1. Sahara Credit Co-operative Society Ltd. 13,366.18

2. Sahara India Commercial Corporation 4384.00
Limited

3. Sahara Q Shop 2258.32 F

4. Ketak City Homes Ltd. 19.43

5. Kiri! City Homes Ltd. 44.05

Similarly, SEBI reguires Saharas to show the following G
gayments made on behalf of Sahara Housing Investment
Comoration Ltd. (SHICU (QartnershiQ firm). by the
following firms. as mentioned below:-

H
704 SUPREME COURT REPORTS [2014] 12 S.C.R.

A Rupees
(In Crores)
1. SICCL 2479.00

2. Sahara Q Shop . 2411.. 90
B
Further. the Saharas will also provide the bank statements
of the above firms showing when the amount was paid to
the partnership firms and subsequently when and how
partnership firm made the disbursement. as sought for by
the SEBI.
c
Mr. Ram Jethmalani, learned Senior Counsel appearing
for the respondents submitted that he will examine the
same and come out with a response within a week."
•
D (emphasis is ours)

The above order is self-explanatory. The two companies,
as also, the contemnors including the present petitioner, were
obviously not providing the required bank statements, even
though in Appeal no. 49 of 2013 filed by SIRECL before the
E SAT, it had committed to furnish bank accounts of Sahara India
to establish redemption of payments. The relevant paragraph
containing the assertions made therein is being extracted
hereunder:-

F "(ee) The Appellant has invested the funds of.OFCD as
per the details mentioned in the Affidavit dated·04.01.2012
of Shri B.M. Tripathi filed before the Hon'ble Supreme
Court in Civil Appeal No. 9833 of 2011 which is already
on the record of the Hon'ble Supreme Court. Further, it is
G submitted that in order to make redemptions to the OFCD
holders, the Appellant had to dispose of the investments.
Amounts realized on such disposal were utilized to pay the
investors, on redemption through Sahara India-Partnership
Firm to make the redemptions. The redemptions made to
investors are clearly reflected and found in the Books of
H
SUBRATA ROY SAHARA v. UNION OF INDIA 705
(JAGDISH SINGH KHEHAR, J.]
Accounts of Sahara India. The Appellant .crave leave to A
refer to and rely upon bank accounts of Sahara India as
and when produced."

(emphasis is ours)

In a similar Appeal no. 48 of 2013, filed by SH.ICL before 8
the SAT, exactly the same stance (as adopted by SIRECL, and
extracted above), was taken. Even though the position adopted
by the two companies was, that verification of redemption of
OFCD's could be established from bank accounts of Sahara
India Limited, the said bank accounts depicting the said C
transactions were not being disclosed. A perusal of the above
order dated 28.1.2014 reveals, that Mr. Ram Jethmalani,
learned Senior Counsel sought time to examine the matter, so
as to be able to come out, with an appropriate response. On
20.2.2014, conflicting stands were taken by learned counsel D
appearing for the alleged contemnors (including the present
petitioner). One learned counsel, went to the extent of
contending, that the position adopted by the two companies in
the two appeals, was the result of a typographical error. All
along, most ridiculous and absurd defences were raised. Our E
impression is, that this was done to avoid furnishing of the
information sought. Maybe there was no information to supply.

91. This Court was also convinced, that the attitude of the
alleged contemnors was defiant and non-cooperative, insofar F
as the implementation of its orders dated 31.8.2012 and
5.12.2012 was concerned. Accordingly the personal presence
of the alleged contemnors was ordered. This was yet another
order, in the line of orders passed by us, this time sterner than
the previous ones. Yet again, aimed at cajoling compliance of
the orders dated 31.8.2012 and 5.12.2012. On all the earlier G
dates of hearing, as also on 20.2.2014, Interlocutory Application
nos. 68 and 69 of 2013 were posted for hearing. It was evident,
that the order dated 20.2.2014 was passed by this Court, in
furtherance of the prayers made in the above Interlocutory
H
706 SUPREME COURT REPORTS [2014] 12 S.C.R.

A jl.pplications .. A relevant portion thereof is reproduced
hereunder:-

"Heard Mr. Ram Jethmalani and Mr. C.A. Sundaram,
learned Senior Counsel appearing for the alleged
contemnors and Mr. Arvind P. Datar, learned Senior
B Counsel appearing for SEBI.

In view of the conflicting stands taken by 'the Senior
Counsel appearing for the alleged contemnors and the
defiant and non-cooperative attitude adopted by the
c contemnors in honouring the judgment dated August 31.
2012. passed by this Court as well as orders dated
December 05. 2012 and Februarv 25, 2013 passed in
Civil Appeal No .. 8643 of 2012 and IA No. 67 of 2013 by
a three Judge Bench of this Court. we direct the personal
D presence of the alleged contemnors and the Directors of
the respondent companies in Court on Februarv 26, 2014
at 2.00 p.m .. on which date the matter will be next taken
!!Q."

(emphasis is ours)
E
A perusal of the above order reveals, that the contemnors
were to appear personally before this Court on 26.2.2014.
Most importantly, it also reveals why the petitioner was being
summoned to this Court. We are also satisfied, that the
F petitioner was fully conscious, of the reason why he was being
summoned to Court, anyway his personal presence was
directed (a:ong with the other C:ontemnors). It therefore does not
lie in the mouth of the petitioner - Mr. Subrata Roy Sahara, or
his learned counsel, that they were not aware why the above
G summoning order was passed.

92. On 25.2,2014, an oral request was made .by Mr. Ram
Jethmalani, learned Senior Counsel. He prayed for exemption,
of the petition'er's personal presence. The above oral request
was specifically turned down. When the matter was taken up
H
SUBRATA ROY SAHARA v. UNION OF INDIA 707
· [JAGDISH SINGH KHEHAR, J.]
on 26.2.2014, whilst the other alleged contemnors were present A
in Court, Mr. Subrata Roy Sahara, the petitioner herein, did not
enter appearance. This Court passed the following order on
26.2.2014, to enforce the presence of the petitioner Mr. Subrata
Roy Sahara on the.next date of hearing, i.e., on 4.3.2014:-
B
"This Court passed an order on February 20. 2014
directing the personal presence of the alleged contemnors
and the Directors of the respondent companies today. i.e.
on February 26. 2014 at 2.00 p.m. On our directions. Mr.
Ashok Roy Choudhary. Mr. Ravi Shankar Dubey and Sm!. C
Vandana Bhargava are present in Court today.

Even though, Mr. Ram Jethmalani, learned Senior Counsel
appearing for the alleged contemnors, made a mention
yesterday, i.e. on February 25, 2014, before this Bench for
dispensing with the personal presence of Mr. Subrata Roy D
Sahara, alleged contemnor No.5, that request was
specifically turned down by this Court.

Today, when the matter is taken up, same request was
made by Mr. Jethmalani, by moving an application, which E
was supported by a medical certificate. The said medical
certificate was issued by Sahara Hospital and, in our view,
the factual position indicated therein does not solicit the
exemption sought.

Since, we have already declined to grant exemption from ' F
personal presence of alleged contemnor No.5 on February
25, 2014, we find no reason to accede to the renewal of
the request made today.

Accordingly, we issue non-bailable warrants of arrest qua G
Mr. Subrata Roy Sahara, alleged contemnor No.5. He shall
be arrested and produced before this Court on March 04,
2014 at 2.00 p.m.

The afore-mentioned Directors, who are present today,
shall also remain present in Court on the next date. H
708 · SUPREME COURT REPORTS [2014] 12 S.C.R.

A Put up on March 04, 2014 at 2.00 p.m."

(emphasis is ours)

On 4.3.2014, all the col"!temnors were present. Not only
were learned counsel appearing for the petitioner permitted to
B address arguments, we afforded an opportunity of hearing to
each of the.directors present in Court, as also, Mr..Subrata Roy
Sahara. In .the facts and circumstances of the controversy it
needs to be noticed, that Mr. Subrata Roy Sahara was
repeatedly heard on 4.3.2014, as and when he desired to
c express his view, till he had nothing further to state.

93. It is thereupon that the impugned order dated 4.3.2014
extracted at the beginninQ of this order, was passed.

94. Based on the factual position noticed in the foregoing
D paragraphs, it was the vehement contention of Mr. Arvind Datar,
learned Senior Counsel appearing for the SEBI, that the entire
basis of the submissions canvassed on behalf of the petitioner
was fallacious. It was submitted, that a written prayer was made
in Interlocutory Application nos. 68 and 69 of 2013, inter alia
E praying for the arrest of the petitioner herein - Mr. Subrata Roy
Sahara, and als.o, that of two other male directors of the
companies, namely, Mr. Ashok Roy Choudhary and Mr. Ravi
Shankar Dubey. The impugned order dated 4.3.2014, was
exactly to the above effect. In consonance with the prayer made
F by the.SEBI, the impugned order dated 4.3.2014 directed the
arrest and detention of Mr. Subrata Roy Sahara, Mr. Ashok Roy
Choudhary and Mr. Ravi Shankar Dubey. We did not traverse
beyond the prayers made in the Interlocutory Applications. We
did not order the arrest and detention of another contemnor Smt.
G Vandana Bhargava, because no prayer for her arrest had been
made, and also because of the reasons expressed in the order
dated 4.3.2014. There could therefore be no reason to doubt,
that the order dated 4.3.2014 had been passed in furtherance
of express prayers made to this Court, in Interlocutory
H Application nos. 68 and 69 of 2013.
SUBRATAROY SAHARA v. UNION OF INDIA 709
[JAGDISH SINGH KHEHAR, J.]
95. We find each one of the submissions advanced by Mr. A
Arvind Datar on behalf of the SEBI, as fully justified. We have
recorded our own observations, at the end of each of the above
paragraphs, dealing with the factual position brought to our
notice, by the learned Senior Counsel for the SEBI. We are
satisfied, that Mr. Subrata Roy Sahara was well aware of the B
proceedings before this Court. He was well aware of the prayers
made in Interlocutory Application nos. 68 and 69 of 2013. He
filed his written response thereto, by way of an affidavit. The
petitioner was aware of the seriousness of the issue, on
account of various restraining, corrective and deterrent orders c
passed by this Court, from time to time, each graver than the
previous ones. He remained unaffected to all the efforts made
by this Court, to enforce refund of the moneys collected by the
two companies, to those who had invested in their OFCD's,
along with interest, in terms of this Court's orders dated 0
31.8.2012 and 5.12.2012. It is, therefore, that this Court was
left with no other option, but to order the arrest and detention
of two of the directors, and Mr. Subrata Roy Sahara. We were
satisfied, that the above order was necessary to ensure the
observance of the due process of law, in the facts and E
circumstances of the case. The above order was also
imperative, if we were to perform· our duties and functions
effectively, and if we were to maintain the majesty of law and/
or the dignity of the Supreme Court.

96. It is not possible for us to accept, that while passing F
the above order, no opportunity was afforded to the petitioner
- Mr. Subrata Roy Sahara. Indeed every response made by the
alleged contemnors, was taken into consideration on each
occasion. The alleged contemnors were found to be playing
tricks with this Court. Not 011ly were learned counsel G
representing the alleged contemnors heard from time to time,
personal hearing was also afforded to the directors and Mr.
Subrata Roy Sahara, the petitioner herein on 4.3.2014. In fact,
Mr. Subrata Roy Sahara, the petitioner herein, was heard
repeatedly to his heart's content, before the order dated H
710 SUPREME COURT REPORTS [2014] 12 S.C.R.

A 4.3.2014 was passed. For the reasons recorded hereinabove,
it is not possible for us ·to accept the contention advanced at
the hands of the learned counsel for the petitioner, that the
order dated 4.3.2014 was passed without following the rules
of natural justice, or that, the above order violates any of the
B petitioner's fundamental rights:

VIII. Whether the impugned order dated 4.3.2014, is
vitiated on account of bias?

97. To be fair to Mr.· Rani Jethmalani and Dr. Rajeev ·
C Dhawan, learned Senior Counsel representing the petitioner,
it is essential to indicate, that one of the reasons expressed
by them, for us not to hear this matter was, that we entertained
a bias against the petitioner. The pointed contention was, that
·the deliberations conducted by us, had generated a reasonable
D apprehension in the mind of.the petitioner, that we had already
arrived at a final resolve, and that, we would not be satisfied
under any circumstances, with the petitioner's arguments and
. submissions on merits. It was, therefore submitted, that the
merits of the controversy would not make any difference to this
E Bench, since the Bench had already pre-judged the. matter, and
that, no relief could be expected by the petitioner from us.

98. In order to support his above submission, learned
Senior Counsel for the petitioner argued, that the petitioner had
been confined to Tihar Jail, since 4.3.2014, without any
F justification. It was submitted, that the incarceration of the
petitioner was void, and with the march of events, during the
course of hearing of the instant petition, it had further become
clear to the petitioner, that it was likely that the petitioner would
continue to remain in custody for an indefinite period. In this
G behalf it was submitted, that it was the petitioner's impression
that the Judges hearing the matter, wished to enforce the orders
dated 31.8.2012 and 5.12.2012, at all costs. It was submitted,
that the above orders had been substantially complied with, yet
without following the rules of natural justice, the petitioner has
H been accused of not complying with the orders of this Court. It
SUBRATA ROY SAHARA v. UNION OF INDIA 711
[JAGDISH SINGH KHEHAR, J.]
was submitted, that the petitioner's incarceration vide order A
dated 4.3.2014 was a complete nullity, and it was the duty of
this Court, to terminate his unlawful detention, and to order his
release forthwith.

99. It was the pointed submission of the learned counsel B
for the petitioner, that during the course of hearing (of Contempt
Petition (Civil) nos. 412 and 413 of 2012 and Contempt Petition
(Civil) no.260 of 2013), in order to determine whether or not
. the respondents therein (including the present petitioner) were
actually guilty of contempt, one of the Judges hearing the matter C
(J.S. Khehar, J.), had presumably in agreement with the other
Judge on the Bench (K.S. Radhakrishnan, J.) informed learned
counsel, that the issue as to whether the respondents in the
above petitions, had committed contempt or not, would only be
considered after the Court's satisfaction, that the orders dated
31.8.2012 and 5.12.2012 had been complied with. It was the D
submission of the learned Senior Counsel for the petitioner, that
when the petitioner's detention was ordered on 4.3.2014,
neither the petitioner nor his counsel understood the purpose
for which the petitioner, as promoter of the two companies, and
the other directors of the two companies, had been summoned E
to this Court. Besides the above stated factual submission, it
was also the contention of the learned Senior Counsel for the
petitioner, that the petitioner is still unaware, of the reasons for
which his detention has been ordered.
F
100. It was submitted, that under the stress created by the
order passed by this Court on 4.3.2014, by which the .
petitioner's liberty had been taken away, the petitioner has
made repeated efforts to suggest a possible settlement, yet all
efforts made by the petitioner were rejected. The petitioner's G
proposals were construed, according to learned counsel, as an
insult to the Court. It was submitted, thatail these events, had
generated a reasonable apprehension in the mind of the
petitioner, that this Court had already arrived at a final decision.
In order to support the instant submission, learned counsel for H
712 ·SUPREME COURT REPORTS [2014] 12 S.C.R.

A the petitioner invited this Court's attention to something which
had completely shocked the petitioner, and had made him
incapable to expecting a just decision at the hands of the
Judges hearing the matter. In this behalf it was pointed out, that
in the impugned order a finding had been recorded, that • ...
B all the fact finding authorities had opined that a majority of the
investors did not exist..." It was submitted, that the identity of
the authorities which had arrived at the above conclusion, had
not been disclosed, by this Court. It was pointed out, .that no
such mention had been made in the affidavit filed by the SEBI,
c and no such submission was advanced, during the course of
hearing. It was therefore, the contention of the learned counsel
for the petitioner, that the petitioner was of the firm belief, that
in view of our pre-disposition, legitimate verification of the
documents furnished by the two companies to the SEBI, cannot
0 be expected. ltwas submitted, that the situation created by this
Court was such, that the petitioner is in no position, even to
make an effort to find a compromise solution to the problem. It
was also the assertion of the learned counsel for the petitioner,
that the impugned order recited, that the respondents/
E contemnors (including the petitioner herein) were heard,
whereas, .the respondents were called upon when only a few
minutes were left for this ·court to rise on 4.3.2014. While
acknowledging, that all the four respondents (including the
present petitioner) were individually asked, as to whether they
had anything to say, they were not informed what they were
F asked to respond to. Accordingly, all the respondents who had
appeared before this Court on 4.3.2014, were fullyjustified in
stating to this Court on 4.3.2014, that their response was the
same as had been submitted to this Court, on their behalf, by
their respective learned Senior Counsel. It was accordingly
G sought to be suggested, that only an illusory hearing, in total
defiance of the rules of natural justice, was afforded to the
petitioner; and .the other contemnors/respondents. Based on the
above premise, it was the submission of the learned Senior
Counsel for the petitioner, that on account of the lack of
H confidence of the petitioner, in this Bench, it would be improper
. SUBRATA ROY SAHARA v. UNION OF INDIA 713
[JAGDISH SINGH KHEHAR, J.]
for this Bench to hear the present case on its merit, arid to A
render judgment thereon.

101. In order to support his above contention, and to bring
forth the principles enunciated by this Court, which were
relevant to the present case, Mr. Ram Jethmalani, learned 6
Senior Counsel, placed reliance on Manak Lal v. Dr. Prem
Chand, (1957), SCR 575. Inviting the Court's attention to the
factual background of the controversy in the above case, it was
brought out, that Dr. Prem Chand, the respondent, had filed a
complaint against Manak Lal, the petitioner, under the Bar C
Councils Act. During the course of adjudication, both the
Members of the Tribunal (under the Bar Councils Act) and the
Judges of the High Court of Rajasthan, accepted the
complainant's version, and rejected the pleas raised by Manak
Lal. Resultantly, Manak Lal was held guilty of gross professional
misconduct. It was the above finding, which. was assailed by D
Manak Lal before this Court. The contention advanced .on his
behalf was, that the Members of the Tribunal, nominated to
enquire into the misconduct ofManak Lal, had been improperly
nominated. The improper constitution of the Tribunal was
premised on the fact, that Shri Chhangani who was the E
Chairman of the Tribunal, had previously filed a power of
attorney on behalf of Dr. Prem Chand, in a matter being
determined under Section 145 of the Cr.P.C. It was submitted
that Shri Chhangani, had also argued the above matter, on
behalf of Dr. Prem Chand on 23.8.1952. Having_ appeared for F
the opponent, it was submitted, that Shri Chhangani was
disqualified from acting as Chairman/Member of the Tribunal.
This Court in the above factual background, held as under:-

"There is some force in this argument. It is well settled that G
every member of a tribunal that is called upon to trv issues
in judicial or quasi-judicial proceedings must be able to act
judicially: and it is of the essence of judicial decisions and
judicial administration that judges should be able to act
impartially. objectively and Without any bias. In such cases H
714 SUPREME COURT REPORTS [2014] 12 S.C.R.

A the test is not whether in fact a bias has affected the
judgment: the test always is and must be whether a. litigant
could reasonably apprehend that a bias attributable to a
member of the tribunal might have operated against him
in the final decision of the tribunal. It is in this sense that it.
B is often said that justice must not only be done but must
also appear to be done."

(emphasis is ours)

· On the issue, that justice must not only be done, but must also
C appear to be done, this Court in the above judgment, had relied
on the judgment rendered in Freme Lloited Breweries Co. v.
Bath Justices, (1926) AC 586, and thereupon, had observed
as under:- '

D "As Viscount Cave L. C. has observed in From United
Brewerses Co. v. Bath Justices, "this rule has been
asserted not only in the case of Courts of Justices and
other judiciartribuna/s but in the case of authorities which,
though in no sense to be called Courts, have to act as
judges of fhe .rights of others ". In dealing with cases of
E
bias attributed to members constituting tribunals. it is
necessarv to make a distinction between pecuniary
interest and prejudice so attributed. It is obvious that
pecuniarv interest. however small it mav be in a subject-
matter of the proceedings. would who/Iv disqualify a
F member from acting as a judge. But where pecuniarv
interest is not attributed but instead a bias is suggested.
it often becomes·necessarv to consider whether there is
a reasonable ground for assuming the· possibiiitv of a
bias and whether it is /ikelv to produce in the minds of
G the litigant. or the public at large a reasonable doubt
about the fairness of the administration of iustice. It would
always be a question of fact to be decided in each case.
" The principle says Halsbury, "nemo debet esse judex
in causaproprta sua precludes a justice, who is interested
H in the subject matter of a dispute, from acting as a justice
SUBRATA ROY SAHARA v. UNION OF INDIA 715
[JAGDISH SINGH KHEHAR, J:l
therein" (Halsbury's Laws of England, Vol. XX/, page 535, A
para 952). In our opinion. there is and can be no doubt
about the validity of this principle and we are prepared
to assume that this principle applies not onlv to the
justices as mentioned by Halsburv but to all tribunals and
bodies which are given jurisdiction to determine judicially B
the rights of parties."

(emphasis is ours)

In Manak Lal's case (supra), reliance was also placed by
this Court on Rex v. Sussex Justices, Ex parte McCarthy, C
(1924) 1 KB 256. Relying on the above judgment, this Court
had expressed as under:-

"In support of his argument, Shri Daphtary referred us to
the decision in Rex v. Sussex Justices, Ex parte McCarthy~ 0
In this case. the Court was dealing with a case arising out
of a collision between a motor vehicle belonging to the
applicant and one belonging to W. At the hearing of the
summons the acting clerk to the justices was a member
of the firm of solicitors who were acting for Win a claim· E
for damages against the applicant for injuries received in
the collision. After the evidence was recorded the justices
ret[ed to consider their decision and the acting clerk also
retired with them in case they should desire to be advised
on any point of law. The applicant was convicted in the
@se. This conviction was challenged by the applicant on
F
the ground that it was vitiated by the improper conduct of
the justices in allowing the acting clerk to be associated
with them when they deliberated about the merits of the
. case. An affidavit was filed on behalf of the justices that
they reached their decision without consulting the acting · G
clerk and that the acting clerk had in fact abstained from
referring to the case. This affidavit was accepted as true
by all the learned judges who heard the case and yet the
conviction was quashed. "The question is" observed Lord
Hewart C.J. "whether the acting clerk was so related to the H
716 SUPREME COURT REPORTS [2014) 12 S.C.R.

A case in its civil aspect, as to be unfit to act as a clerk to
the justices in the criminal matter" and the learned judge
added that "the answer to that question depends not upon
. what exactly was done but upon what might appear to be
done. Nothing is to be·done which creates even a
B suspicion that there has been an improper interference in.
the course of justice.'' Lush J. who agreed with Lord Hewart
C.J. likewise accepted the affidavit made on behalf of the
justices but observed. "that they have placed themselves
in an impossible position by allowing the clerk in those
c circumstances to retire with them into their consultation
room." ·

(emphasis is ours)

This Court in Manak Lal's case (supra) also placed reliance
D on Rex v. Essex Justices, Ex parte Perkins, (1927) 2 KB 475.
The conclusions recorded in the latter judgment were accepted
by this Court, by holding as urider:- ·

"The same principle was enunciated with equal emphasis
in Rex v. Essex Justices, Ex parte Perkins. This was a
E
dispute between a husba'nd and his wife and it appeared
that the wife had consulted the solicitor's clerk in their office
about the preparation of a deed uf separation from her
husband and the lawyer acted in the matter for a time after
which she ceased·to consult him. No mention of the matter
F was made to the solicitor himself except one very short
reference to it in a weekly report from his clerk.
Subsequently the solicitor acted as a clerk to the justices
who tried the case. He stated in his affidavit that, when
acting· as a clerk to the justices on the occasion in
G question, he had no knowledge that his firm had acted for
.the wife and that he was in no way adverse to the husband.
It was urged that the decision of the justices should be set
aside .as the justices were not properly constituted and it
appears also to have been suggested that the decisioi:i
H might. perhaps. have been influenced by a prejudice
SUBRATA ROY SAHARA v. UNION OF INDIA 717
[JAGDISH SINGH KHEHAR, J.]
though indirectly and to a very small extent. Rejecting the A
argument that the decision of the justices had been
influenced even remotely by the impropriety alleged, Avory
J. stated that "though the clerk to the justices and the
'justices did not know that his firm had acted for the
applicant's wife, the necessary, or at least the reasonable. B
impression, on the mind of the applicant would be that
justice was not done seeing that the solicitor for his wife
was acting with the justices and advising' them on the
hearing of the summons which she had taken against him."

(emphasis is ours) C

the submission of Shri Ram Jethmalani, learned Senior
Counsel for the petitioner, having placed reliance on the
judgments was, that we were disqualified from hearing the
merits of the claim projected through the instant petition, D
because of our bias.

102. Dr. Rajeev Dhawan, learned Senior Counsel for the
petitioner, seconded the position expressed by .Mr. Ram
Jethmalani. It was his contention, that there is. a pre-disposition E
in the matter on the part of the Bench. The above pre-
disposition, according to him, appears to be on the basis of a
strong commitment towards the "other side". The inference of
his assertion, according to learned counsel, could be gathered
from the fact, that all the proposals offered by the petitioner for F
his release from detention, had been rejected by us, one after
the other. According to learned counsel, the Bench had
demonstrated its rigidity to such an extent, that the petitioner
finds "no play in the joints". In other words, according to learned
counsel, we were willing to accept nothing short of, what we had
already ordered. The Bench according to learned Senior G
Counsel, had repulsed all alternative reasonable grounds of
compromise. Learned counsel then invited our attention to an
order passed by us on 26.3.2014. The said order is being
·extracted ·hereunder:-
H
718 SUPREME COURT REPORTS [2014] 12 S.C.R.

A "We have gone through the fresh proposal filed on
25.03.2014. Though the same is not in compliance with our
Order dated 31.08.2012 or the Order passed by the three-
Judge Bench of this Court on 05.12.2012 in Civil Appeal
No.8643 of 20.12 and on 25.02.2013 in I.A. No.67 of 2013
B in Civil Appeal No.9813 of 2011 with I.A. No.5 of 2013 in
Civil Appeal No.9833 of 2011, we are inclined to grant
interim bail to the contemnors who are detained by virtue
cif our order dated 04.03.2014. on the condition that they
would pay the amount of Rs.10.000 crores - out of which
c Rs.5.000 crores to be deposited before this Court and for
the balance a Bank Guarantee of a nationalized bank be
furnished in favour of S.E.B.I. and be deposited before this
Court. On compliance. the contemnors be released
forthwith and the amount deposited be released to S.E.B.I.
D 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."

E (emphasis is ours)

It was submitted, that the above order passed by this Court
was an impossible order. Because it was impossible to
implement. It was submitted, that even after the passing of the
F above order, the petitioner had repeatedly sought modification
thereof, through further. proposals. In order to demonstrate bias
at the hands of the Bench, it was contended, that all subsequent
proposals made by the petitioner were rejected
unceremoniously. This, according to ·the learned Senior
Counsel for the petitioner demonstrates, that the mind of the
G Judges hearing the matter was closed, and that, even genuine
proposals made by the petitioner were being rejected, without
due application of mind:

103. All that has been noticed hereinabove, has been so
H
SUBRATA ROY SAHARA v. UNION OF INDIA 719
[JAGDISH SINGH KHEHAR, J.]
recorded, lest we are accused of, not having taken into A
consideration the submissions advanced by the learned counsel
for the petitioner, in their correct perspective. However brazen
the arguments may be, it is our onerous duty to deal with the
contentions advanced by the ·learned Senior Counsel for the
petitioner. We will make a humble effort to deal with the same, B
in the following paragraphs.

104. No allegation of bias or prejudice was levelled, when
this very Bench was constituted to decide Civil Appeal nos.
9813 and 9833 of 2011. We had heard the learned Senior
Counsel for the two companies at great length, and had
c
adjudicated the matter taking into consideration each and every
aspect of the controversy projected before us. It has never been
the case of the petitioner, that we were biased when we had
disposed of the appeals by our common order dated
31.8.2012. On the issue of disbursement of payments by the D
two companies (to the SEBI), the date of deposit, was extended
by an order dated 5.12.2012, passed by a three-Judge Division
Bench (in Civil Appeal no. 8643 of 2012 and Writ Petition (Civil)
no. 527 of 2012). Neither of us was on the three-Judge Division
Bench, which passed the order dated 5.12.2012. It needs to E
be clearly understood, that the order dated 31.8.2012 read with
the order dated 5.12.2012 is final and binding, and no
proceedings are pending before this Court, either at the hands
of the two companies, or the petitioner herein, for their
reconsideration on merits. We have neither the jurisdiction, nor F
the authority to relax the terms and conditions of the above
orders, In fact, we would be committing contempt if we were
to, on o·ur own, interfere with the above directions. As a matter
of fact, it is not open to us, to relax the order dated 5.12.2012,
which was passed by a three-Judge Division Bench, requiring G
the contemnors to deposit the first installment of Rs.10,000
crores, in the first week of January 2013.

105. On 6.2.2013, we issued notice, in Contempt Petition
(Civil) Nos. 412 and 413 of 2012. On 24.7.2013, we issued
H
720 SUPREME COURT REPORTS (2014] 12 S.C.R.

A notice, in Contempt Petition (Civil) No. 260 of 2013. We heard
the above contempt petitions on numerous dates (details
whereof have already been enumerated above). No allegation
of bias was ever levelled by any of the contemnors, not even
by the petitioner herein, before the hearing of the present writ
i3 petition. Despite prolonged hearings in the matters pertaining
to the two companies, which would directly affect the petitioner
herein, no allegation of bias was ever levelled against this
Bench hither to before. we· are therefore, satisfied that the
instant plea· of bias, is based on the petitioner's frustration,
c arising out of being cornered into a situation, wherefrom there
is no escape.

106. The assertion, that we would not be satisfied under
any circumstances, with the petitioner's arguments and
submissions on merits, is clearly misconceived. The assertion
D made by the petitioner, that we had already prejudged the
matter, and no relief could be expected from us, is likewise a
total misconstruction of the proceedings we are dealing with. It
needs to·be understood; that there is no lis pending before us,
wherein we have to determine the merits of.the claims raised
E by the rival parties. In a situation, where rival claims of parties,
have to be decided on merits, such a submission could have
possibly been made. Merits of the claims (and counter-claims)
have already been settled by this Court's order ·dated
31.8.2012. The proceeding wherein the impugned order was
F passed, was being conducted in the contempt jurisdiction of
this Court (under Article 129 of the Constitution of 1.ndia). The
scope of the instant contempt jurisdiction extends to, punishing
contemnors for violating Court's orders; punishing coniemnors
for disobeying Court's orders; punishing contemnors for breach
G of undertakings given to Courts. It also extends to enforcement
of Court's orders. Contempt jurisdiction even extends to
punishing those who scandalize (or lower the authority of) any
Court; punishing those wt:io interfere in due course of judicial
proceedings; and punishing those who obstruct the
H
SUBRATA ROY SAHARA v. UNION OF lNDIA 721
[JAGDISH SINGH KHEHAR, J.]
administration of justice. During the course of hearing, learned A
counsel again and again, admitted breach of this Court's
orders, dated 31.8.2012 and 5.12.2012. It was inter alia
admitted, that payments could not be made within the time
frame stipulated. Contempt by way of breach of this Court's
orders having been admitted, the allegation of bias is clearly a 8
plea which is not available to the petitioner. In such
consideration, there is no room which remains for further
adjudication on merits. There cannot, therefore be a prejudged
mind (all that has to be decided, has already been adjudged).
For the same reason, there is no scope for a compromise. c
Issues of compromise ar.ise between parties, while merits of
rival claims are pending. The dispute between the parties has
already been settled, and contempt by way of breach has
already been admitted. The question of compromise does not
.arise at all. We therefore reject all the above submissions 0
advanced by the learned counsel for the petitioner.

107. We shall now deal.with the substance, and the
import, of the judgments relied upon. It is not the case of the
petitioner, that we have any connection with either the two
companies under reference, or any other company/firm which E
constitutes the Sahara Group. We may state, that neither of us
has even a single share with the two concerned companies or·
with any other company/firm comprising of the Sahara Group.
In order to remove all ambiguity in the matter we would further
state, that neither of us, nor any of our dependent family F
members, own even a single share in any company
whatsoever. Neither of us has been assisted in this case, for
its determination on merits by any law clerk, intern or staff
member. while hearing, dealing with or deciding the
controversy. Nor has any assertion in this behalf, been made G
against us, by the petitioner or his learned counsel. Accordingly
the factual position, which was the basis of the decisions relied
upon by the learned counsel, is not available in the facts and·
circumstances of this case. In the above view of the matter, it
•
H
722 SUPREME COURT REPORTS (2014) 12 S.C.R.

A is but natural to conclude, that none of the judgments relied
upon by the learned Senior Counsel for the petitioner, on the
subject of bias, are applicable to the facts and circumstances
of this case. We are ·satisfied that none o( the disguised
aspersions cast by learned Senior Counsel, would be sufficient
B to justify the invocation of the maxim, that justice must not
actually be done, but must also appear to be done. As already
noticed above, even though our combination as a Bench, did
not exist at the time, when the present petition was filed, a
Special Bench, with the present composition, was constituted
t by Hon'ble the Chief Justice, as a matter of his conscious
determination. No litigant, can be permitted to dissuade us, in
discharging the onerous responsibility assigned to us by
Hon'ble the Chief Justice.

108. Once it is understood, that we are no longer
D possessed with any adjudicatory role, insofar as the controversy
on merits is concerned, the principal allegation of bias itself
pales into insignificance. This Court by its order dated
31.8.2012 had directed the two companies to." ... refund the
amounts collected through RHPs dated 13.3.2008 and
E 16.10.2009 along with interest at the rate of 15% per annum
to the SEBI, from the date of receipt of the subscription amount
.till the date of repayment, within a period of three months from
today ... " The above amount was payable by the two companies
by 30.11.2012.-lt is not a matter of dispute, that neither the two
F companies nor its.promoter or the directors, ever sought
extension of time in making the above payment, by initiating
proceedings known· to law, either in Civil Appeal no. 9813 or
9833 of 2011. The two companies, however, filed Writ Petition
(Civil) no. 527 of 2012 in the same manner, as the petitioner
G · has filed the present writ petition. The filing of the above writ
petition was itself a matter of serious concern with the legal
·fraternity, to the extent ihat the President of the Supreme Court
Bar Association had suo mot6 intervene_d in the above matter,
to advance submissions before the three-Jljdge Division
H
SUBRATA ROY SAHARA v. UNION OF INDIA 723
(JAGDISH SINGH KHEHAR, J.)
Bench. The three-Judge Division Bench while disposing of the A
matter on 5.12.2012, declined to accept the prayer made by
the two companies, for taking into consideration the refund
already made by way of redemptions to investors. At the time
of disposal of Writ Petition (Civil) no. 527 of 2012 (and Civil
Appeal no. 8643 of 2012) on 5.12.2012, it was directed, that B
the demand draft in the sum of Rs.5,120 crores, which had
been produced before this Court on 5.12.2012, be immediately
handed over. It was concluded, that the balance amount of
Rs.17,400 crores, together with interest at the rate of 15% per
annum, was still payable (even after the deposit of above c
Rs.5,120 crores). A direction was accordingly issued to pay the
first installment of Rs.10,000 crores within the first week of
January, 2013. The application filed by the petitioner for
extension of time to make the above deposit, was rejected by
a three-Judge Division Bench of this Court on 25.2.2013. The
0
direction to pay the first installment of Rs.10,000 crores, by the ·
first week of January, 2013, therefore, assumed finality. We
have neither the authority nor the jurisdiction to entertain any
prayer for reducing the sum directed to be paid, as the first
installment. The submission of the learned Senior Counsel for
the petitioner, that we are unrelenting, or that we are pre- E
disposed, or that we have a closed mind, is therefore, just a
bogey projected by learned Senior Counsel representing the
petitioner. As. a matter of fact, by our conscious effort, we have
unilaterally relaxed the rigor of the first installment of Rs.10,000
crores, as much as we could, by our order dated 26.3.2014. F
Unfortunately, the above order is also not acceptable to the
petitioner. But acceptability apart, our above voluntary action
of slackening the effect of the first installment, directed to be
paid by the two companies, within the first week of January
2013, is clearly sufficient to repudiate and reject, all G
submissions in the nature of our having a predisposed mind.

109. While rendering the instant judgment, we have
recorded the efforts made by this Court to cajole the contemnors
(including the present petitioner) into compliance of this Court's H
724 SUPREME COURT REPORTS (2014] 12 S.C.R.

A orders dated 31.8.2012 and 5.12.2012, under an independent
heading (IV. Efforts made by this Court to cajole the
contemnors, including the petitioner- Mr. Subrata Roy Sahara,
for compliance of the orders of this Court, dated 31.8.2012 and
5.12.2012). The long rope given to the two companies including
B the petitio'1er, and the other directors, demonstrates the efforts
made by us to help the petitioner (and others) out of the mess,
in which they find themselves. As of now, the amount payable
in furtherance of the directions issued by this Court (arr
31.8.2012 and 5.12.2012), has swelled up to Rs.36,608 crores.
C Each proposal made by the petitioner till date, reveals an
acknowledgment to pay. The petitioner has offered to deposit
Rs.2,500 I 3,000 crores, in the proposals made thus far, and
the remaining amount of the first instalment (i.e., Rs.7,500 I
7,000 crores), later on. Therefore, the proposals submitted thus
far, only acknowledge payment of Rs.10,000 crores. None of
D. the proposals, covers the whole amount payable. The
proposals, as a matter of a precondition, demand the
revocation of restraint.orders on bank accounts, and movable
as well as, immovable properties. It may be understandable,
that the restraint order is lifted in respect of the bank accounts,
E and properties, which are to be utilized in discharge of the
liability arising out of this Court's orders (dated 31.8.2012 and
5.12.2012). Repeatedly, during Court hearings, we have been
assuring learned counsel for the petitioner, that individual
accounts will be permitted to be operated, if the deposits
F therein are to be transferred to the SEBI. Likewise, orders
pertaining to particular immovable properties, will be lifted, if
the s«ale proceeds thereof are to be utilized in honouring the
commitment to refund investors' deposits (with 15% interest).
None of the contemnors, have made any proposal, in
G consonance with the above liberty. Acceptance of the proposals
is just not possible, in the teeth of the order dated 5.12.2012,
passed by a three-Judge Division Bench, requiring the two
companies to make a depositof Rs.10,000 crores in the first
week of January, 2013. By now, about 17 further months have
H
SUBRATA ROY SAHARA v. UNION OF INDIA 725
[JAGDISH SINGH KHEHAR, J.]
elapsed without the petitioner and the two companies having A
made any deposit whatsoever. Within the framework of the
requirement depicted in the order dated 5.12.2012, we, by our
own order dated 26.3.2014 {extracted above), softened the
modus of payment. It is, therefore, not possible for us to.accept,
that there has been "no play in the joints" for the enforcement B
of the orders passed by this Court. We find the submission
made by the learned counsel for the petitioner to the effect, that
our order dated 26.3.2013 cannot be complied with, because
it was premised on impossible conditions, is wholly unjustified.
The assets of the Sahara Group are sufficient to discharge the c
entire liability, without much difficulty.

110. Insofar as the assertion made by Dr. Rajeev Dhawan, ·
learned Senior Counsel, that the factual position expressed in
the order dated 4.3.2014 was not correct, is concerned, we may
at the cost of repetition once again notice, that it is also D
important for us to record that the positive position expressed
by the SEBI before this Court {during the disposal of Civil
Appeal Nos.9813 and 9833 of 2011) was, that neither SIRECL
nor SHICL ever provided details of its investors to the SEBI
(FTM). They contested the proceedings initiated by the SEBI E
(FTM) only on .technical grounds. We were told that even before
the SAT, no details were furnished. As against the above, the
position adopted by the SIRECL before us, during the course
. of appellate proceedings was, that SIRECL had furnished a
compact disc with all details to the SEBI (FTM), alongwith its F
operating key. Whilst it was acknowledged by the SEBI before
this Court, that a compact disc (allegedly containing details
about the investors) was furnished by SIRECL, yet it was
emphatically pointed out, that its operating key was withheld.
This was another ploy, in the series of moves adopted by the G
two companies to withhold the providing of any details to the
SEBI. Resultantly, no details whatsoever were ever disclosed
by SIRECL either before the SEBI (FTM) or the SAT. The
position adopted by SHICL was even worse. It is necessary to
H
726 · SUPREME COURT REPORTS [2014] 12 S.C.R.

A place on record the fact, that the SHICL has never ever
disclosed, the names and other connected details of even a
single investor to the SEBI, despite this prolonged litigation. We
had repeatedly made a poser, during the hearing of the present
petition, ·about SHICL, as indicated above. The position was
B confirmed by learned Senior Counsel representing the SEBI.
Unfortunately, Mr. S. Ganesh, learned Senior Counsel for the
.petitioner, on the last day of hearing, ventured to contest the
above position. He handed over to us two volumes of papers
running into 260 pages (under the title - Note on information
c provided by SHICL to the SEBI). We requi'red him to invite our
attention, to documents indicating disclosure of the above
information. His ploy stooc_I exposed, when no material
depicting disclosure of names, and other connected details of
SHICL to the SEBI, could be brought to our notice. That apart,
D what is essential to record is, that till date SHICL has never
ever supplied investor related details to the SEBI. A fact about
which there is now no ambiguity, specially after learned Senior
Counsel filed the two volumes of papers referred to above. The
above factual position remained unaltered before the.SAT and
everi before this Court. Does it lie in the mouth of learned Senior
E Counsel to assert, that unjustified conclusions had been
recorded against the two companies, without any basis?

111: Dr. Rajeev Dhawan, learned Senior Counsel also
accused us of having a pre-disposition in respect of the
F controversy. This predisposition, according to him, appeared
to be on the basis of a strong commitment towards the "other
side". This assertion was repeated several times during the
hearing. But, which is the other side? In terms of our order dated
31.8.2012, the only gainer on the other side, is the Government
G of India. The eighth direction of our order dated 31.8.2012,
reads as under:- ·

"8. SEBI (WTMl 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
H
·SUBRATA ROY SAHARA v. UNION OF INDIA 727
[JAGDISH SINGH KHEHAR, J.]
subscribers will be appropriated to the Government of A
India."

(emphasis is ours)

If the "other side", is the Government of India, there is certainly
no substance in the aspersion cast by the learned counsel. Just 8
the above aspect' of the matter is sufficient to burst the bubble,
of all the carefully crafted insinuations, systematically offloaded,
by learned counsel, for effect and impact.

112. At this juncture we may refer to a decision of this c
Court which has a bearing on the subject in hand. Reference
is being made to the observations made by this Court, in
Jaswant Singh v. Virender Singh & Ors., 1995 Supp. (1) SCC
384:-

"32. Before parting with this judgment, there is however, D
one matter which has caused us considerable concern and
we wish to advert to it. After the recount had been ordered
by the learned Single Judge in the High Court and the
Deputy Registrar had carried out the inspection of the
ballot papers of the specified booths. the appellant filed E
an application in the High Court under Section 151 CPC
seeking stay of the further arguments to enable the
appellant to move the Supreme Court. In the ·said
application the appellant referred to certain 'observations'
made by the learned Judge during the course of F
arguments and also referred to the manner in which the
two packets containing ballot papers which had been
objected to by both the parties and had been kept for
scrutiny of the learned Single Judge. were handled by the
learned Judge. The appellant went on to say that "by doing G
this the Hon'ble Court was pleased to make these ballot
papers suspect and doubtful and these cannot be
considered for any decision on them regarding their validity
or otherwise as these remained in unsealed condition for
uncertainable time without the petitioner or his Counsel H
728 SUPREME COURT REPORTS (2014) 12 S.C.R.

A being present there". The learned Judge by his order dated
13.5.1993 recorded the following proceedings:

"Counsel for the petitioner has not appeared and
the petitioner himself lias made a request that he
wants to move the Hon'ble Supreme Court for
B
transfer of the Election Petition from this Court. In
view of this statement, the petition is being
adjourned. The petitioner wants to place as
application for transfer on record. He may file it in
the Registry, if so advised.
c
During the course of arguments yesterday, two
sealed envelopes relating to polling booth Nos. 28
and 31 had been opened in the presence of the
parties and their Counsel at the time when the
D report of the Commissioner who carried out test
checking was being considered. These open
envelopes had remained in my custody in my
Almirah under lock and key. Since the case is now
being adjourned, these open envelopes be
E resealed and the same be handed over to the
Additional Registrar (Judicial) alongwith other
sealed envelopes."

33. Thereafter, the appellant as already noticed, filed a
transfer petition in this. Court which was dismissed on
F 30.8.1993. The transfer petition like the application (supra)
cast aspersions on the learned Judge in the discharge of
his judicial functions and had the tendency to scandalise
the Court. It was an attempt to brow beat the learned Judge
of the High Court and cause interference in the conduct of
G a fair trial. Not only are the aspersions derogatory,
scandalous and uncalled for bui they also tend to bring the
authoritv and administration of law into disrespect. The
contents of the application seeking stay as also of the
transfer petition. bring the Court into disrepute and are an
H affront to the majestv of law and offend the dignitv of the
SUBRATA ROY SAHARA v. UNION OF INDIA 729
[JAGDISH SINGH KHEHAR, J.]
Court. The appellant is an Advocate and it is painful that A
by filing the application and the petition as a party in
person. couched in an objectionable language, he
permitted himself the liberty of indulging in an action. which
ill behoves him and does little credit to the noble profession
to which he belongs. An advocate has no wider protection B
than a layman when he commits an act which amounts to
contempt of court. It is most unbefittinq for an advocate to
make imputations against the Judge only because he does
not get the expected result. which according to him is the
fair and reasonable result available to him. Judges cannot c
be intimidated to seek favorable orders. Only because a
lawyer appears as a party in person. he does not get a
license thereby to commit contempt of the Court by
intimidating the Judges or scandalising the courts. He
cannot use language. either in the pleadings or during
D
arguments. which is either intemperate or unparliamentary.
These safeguards are not for the protection of any Judge
individually but are essential for maintaining the dignity and
decorum of the courts and for upholding the majesty of law.
Judges and courts are not unduly sensitive or touchy to fair E
and reasonable criticism· of their judgments. Fair
comments. even if, out-spoken. but made without any
malice or attempting to impair the administration of justice
and made in good faith. in proper language. do not attract
any punishment for contempt of court. However. when from
the criticism a deliberate. motivated and calculated F
attempt is discernible to bring down the iniage of judiciary
in the estimation of the public or to impair the
administration of justice or tend to bring the administration
of justice into disrepute the courts must bestir themselves
to uphold their dignity and the majesty of law. The G
appellant, has, undoubtedly committed contempt of the
Court by the use of the objectionable and intemperate
language. No system of justice can tolerate such unbridled
licence on the part of a person. be he a lawyer. to permit
himself the liberty of scandalising a Court by casting H
730 SUPREME COURT REPORTS [2014) 12 S.C.R.

A unwarranted. uncalled for and unjustified aspersions on the
integrity. ability. impartiality or fairness of a Judge in the
discharge of his judicial functions ·as it amounts to an
interference with the dues course of administration of
justice."
8
(emphasis is ours)

The observations recorded in the above judgment are fully
applicable, to the mannerism and demeanour of the petitioner
- Mr. Subrata Roy Sahara and some of the learned Senior
C Counsel. We would have declined to recuse from the matter,
even if the "other side", had been a private party. For, our·oath
of office requires us to discharge our obligations, without fear
or favour. We therefore also commend to all Courts, to similarly
repulse all baseless and unfounded insinuations, unless of
D course; they should not·be hearing a particular matter, for
reasons of their direct or indirect involvement. The benchmark,
that justice must not only be done but should also appear to
be done, has to be preserved at all costs.

IX. A few words. about the defence of redemption
E
of OFCD's, offered by the two companies:

113. The SEBI (FTM) vide order dated 23.6.2011 passed
the following directions:-

F "1. The two Companies, Sahara Commodity Services·
Corporation Limited (earlier known as Sahara India Real
Estate Corporation Limited) and Sahara Housing
Investment Corporation Limited. and its promoter, Mr.
Subrata "Roy Sahara, and the directors of the said
G companies, namely, Ms. Vandana Bhargava, Mr. Ravi ·
Shankar Dubey and Mr. Ashok Roy Choudhary, jointly and
severally, shall forthwith refund the money collected by the
aforesaid companies tttrough the Red Herring Prospectus
dated March 13, 2008 and October 6, 2009, issued
respectively, to the subscribers of such Optionally Fully
H
SUBRATA ROY SAHARA v. UNION OF INDIA 731
[JAGDISH SINGH KHEHAR, J.)
Convertible Debentures with interest of 15% per annum A
from the date of receipt of money till the date of such
repayment.

2. Such repayment shall be effected only in cash through
Demand Draft or Pay Order. B
3. Sahara Commodity Services Corporation Limited
(earlier known as Sahara India Real Estate Corporation
Limited) and Sahara Housing Investment Corporation
Limited shall issue public notice, in all editions of two
National Dailies (one English and one Hindi) with wide C
circulation, detailing the modalities for refund, including
details on contact persons including names, addresses
and contact details, within fifteen days of this Order coming
into effect.
D
4. Sahara Commodity Services Corporation Limited
(earlier known as Sahara India Real Estate Corporation
Limited) and Sahara Housing Investment Corporation
Limited are restrained from accessing the securities
market for raising funds, till the time the aforesaid E
payments are made to the satisfaction of the Securities
and Exchange Board of India.

5. Further, Mr. Subrata Roy Sahara, Ms. Vandana
Bhargava, Mr. Ravi Shankar Dubey and Mr. Ashok Roy
Choudhary are restrained from associating themselves, F
with any listed public company and any public company
which intends to raise money from the public, till such time
the aforesaid payments are made to the satisfaction of the
Securities and Exchange Board of India."
G
(emphasis is ours)

. Thereafter, the SAT by its order dated 18.10.2011, upheld the
order passed by the SEBI (FTM) dated 23.6.2011. The SAT
having so held, directed the appellant companies (as was the
H
732 SUPREME COURT REPORTS (2014] 12 S.C.R.

A position of parties therein) to refund the money to the investors
within six months (from the date of its order dated 18.10.2011 ) .
. Thereupon, the matter was brought to this Court by way of
appeals preferred by the two companies concerned, Le., Civil
Appeal nos. 9813 and 9833 of 2011. On 28.11.2011, this Court
B passed the following interim order:-

"By the impugned order, "the appellants have been asked
by SAT to refund a sum of Rs.17,400 crores approximately
on or before 28.11.2011. We extend the period upto
9.1.2012."
c
The above interim order was continued indefinitely, by this
Court on 9.1.2012. The direction to refund, therefore, stood
eclipsed. It is necessary to understand the cumulative effect of
the interim orders passed on 28.11.2011 and 9.1 :2012. The
D above orders need to be interpreted, by keeping in mind the
two affidavits dated 4.1.2012 filed by the two companies (in
Civil Appeal nos. 9831 and 9833 of 2011 ). The above
affidavits were filed in compliance of this Court's order, requiring
the two companies to put on record, the manner in which the
E companies had applied the funds collected from the investors.
This Court was informed that the funds were safe as they were
either invested directly or indirectly, in real estate projects, or
were held as current assets/cash and bank balances (as
development rights on land and projects, and advances under
F joint ventures etc.). Believing the factual position depicted in the
two affidavits, this Court.was satisfied, that the investors'
deposits in the OFCD's of the two companies'were safe,
therefore, the direction to refund (ordered by the SEBI (F TM)
and the SAT), came to be stayed. But the orders of the SEBI
(FTM) and SAT were not interfered with, in any other manner.
G It is, therefore clear, that this Court while passing the above
interim order, did not vary the manner of making the refunds
(in case the two companies concerned, decided to make any
refund(s) to the investors). In this behalf it needs to be noticed,
that in its order dated 23.6.2011 the SEBI (FTM) had clearly
H
SUBRATA ROY SAHARA v. UNION OF INDIA 733
(JAGDISH SINGH KHEHAR, J.]
directed, that such repayment could only be made "in cash A
through demand draft or pay order". The SAT had reiterated
the above position. No liberty was granted to the two
companies concerned, to convert the investment made by the
holders of the OFCD's, ·into similar investments with the other
companies. In other words cash conversion in any other format, B
was norpermitted. To comply with the letter and spirit of law,
therefore, even if the refund had to be made by the two
concerned companies, it could have been done only "through"
demand drafts or pay orders. The alleged cash payment made
by the two companies while redeeming the OFCD's (even if c
we assume, that refund had actually been made) was therefore
per se, illegal and unacceptable in terms of the orders dated
23.6.2011 (passed by the SEBI (FTM)) and 18.10.2011
(passed by the SAT). We must, therefore emphatically point out,
that the very submission now made by the companies, that the 0
investors were refunded their deposits by way of cash, is per
se another tactic, in the series of manoeuvres, adopted by the
two companies to defeat the process of law.

114. This issue needs to be examined from another
perspective. The different kinds of bonds (OFCDs) issued by E
SIRECL and SHICL, as also, their maturity/conversion periods
are depicted hereunder:

SIRECL
F
S.No. Name of Term Minimum period Period for·
Bonds (months) for redemption conversion
(months) into shares
(months)

(i) Abode Bond 120 60 119 G

(ii) Real Estate 60 Nil 59
Bond

(iii) Nirman Bond 48 18 47
H
734 SUPREME COURT REPORTS (2014] 12 S.C.R.

A SHICL

S.No. Name of Term Minimum period Period for
Bonds (months) for redemption conversion
(months) into shares
B (months)

(i) Multiple Bond 180 120 179
'
(ii) Income Bond 120 Nil 119

c (iii) Housing Bond 180 120 179

It would be relevant to mention, that in furtherance of the terms
and conditions attached to the different kinds of bonds, it was
acknowledged, that except for Nirman Bond.s issued by
SIRECL, no other bond could be redeemed before the year
D 2013. The earliest redemption of the bonds, could have been
made in 2013. The above factual position was expressed by
the two companies in separate affidavits dated 4.1.2012 (filed
before this Court). The affidavits in unmistakable terms also
·clearly narrated, that only one out of the six different types of
E bonds issued, by the two companies was partially redeemable,
in the fim!ncial year 2012-13. The companies also confirmed
in their above affidavits, that the total amount which would
become redeemable, towards the end of the financial year
2012-13, was only Rs.351 crores. There was therefore, no
F question of redeeming thousands of crores· of rupees of
· deposits made towards the above OFCD's, in 2012 .itself. It
needs to be understood, t~at a debenture (OFCD) is a contract
between a company and the debenture holder. It sets out the
terms and conditions on the basis of which, the debenture
G certificate, which is a debt instrument, has been issued. It is
neither open to the concerned company, nor the debenture
holder, to grant/seek premature redemption. No company can
unilaterally redeem the debentures, before the prescribed
period. The theory of redemption propounded by the two
H
SUBRATA ROY SAHARA v. UNION OF INDIA 735
(JAGDISH SINGH KHEHAR, J.)
companies, is therefore in clear violation of law. In any case, A
there was no reason for the two companies to refund any
money to the investors, specially because the two companies
were protected by an order of this Court, from making any
refund to the investors, during the pendency of the appellate
proceedings (Civil Appeal Nos. 9813 and 9833 of 2011), which B
continued up to 31.8.2012. A submission wa.s, however, made
during the course of hearing, that the investors were mounting
a collective pressure for premature payments. The two
companies (nor the petitioner, in this case) did not place any
material on the record of its pleadings, at any stage to c
demonstrate, that mobs had gathered at the companies
collection centres, demanding redemptions. Had the above
position been correct, the same would have definitely been
noticed and reported by U1e media. There was not even an iota
of such media reporting. It is therefore prima facie, not possible
0
for us to accept the refund theory, projected on behalf of the
two companies (oreven by the petitioner). Besides the factual
position expressed in the instant paragraph, there are other
reasons also, to come to the same conclusion. The same are
separately being recorded hereinafter.
E
115. Factually there is no acceptable proof of such refund/
redemption of OFCD's by the two companies tq the investors.
Therefore, we find no reason to accept per se, that any such·
redemption was actually made. Our reasons for the same, are
being narrated hereafter. Whe'l SIRECL was required to F
disclose, the sources from which, it had made payments by way
of redemption to the OFCD's holders, the following sources
were disclosed:-
Rupees
(In Crores) G
1. Sahara Credit Co-operative Society Ltd. 13,366.18
2. Sahara India Commercial Corporation 4384.00
Limited
H
736 SUPREME COURT REPORTS [2014] 12 S.C.R.

A 3. Sahara Q Shop 2258.32

4. Ketak City Homes Ltd. 19.43

5. Kirit City Homes Ltd. 44.05

B likewise, when similar information about redemptions was
sought from SHICL, the following sources were disclosed:-

When asked about the manner in which the aforesaid
companies, had forwarded the above mentioned payments to
C the two companies, the response was, that the above amounts
were never released to the two companies. The case set up
was, that the amounts were transferred to Sahara India (Firm).
When asked to explain the manner in which the companies had
forwarded the funds to Sahara India (Firm), the submission was,
that the companies had collected the funds by way of cash, and
D had forwarded the same to Sahara India (Firm), by cash. And
Sahara India (Firm) had then directly made refunds to the
investors. When proof of the same was sought, the submission
advanced on behalf of the two companies was, that the above
transfers were not made through banking channels, and
E therefore banking transactions were not available to establish
the same. When asked how the amounts were disbursed to the
investors concerned, it was submitted, that about 95% of the
above payments to the investors, were also made by way of
cash. To demonstrate the receipts and payments of ttie funds
F by way of cash, learned counsel representing the contemnors
(including the petitioner herein), invited our attention to the
books of accounts, which had been duly audited. This according
to learned counsel, was proof of the transactions urider
reference. The above explanation may seem to be acceptable
G to the contemnors, but our view is quite the converse. It is not
possible for us to accept, that the funds amounting to thousands
of crores could have been transacted by way of cash. The
credibility of the books of accounts relied upon by the two
companies has been dealt with separately hereinafter.
H
SUBRATA ROY SAHARA v. UNION OF INDIA 737
[JAGDISH SINGH KHEHAR, J.]
-116. We had also made efforts to obtain details in respect A
of redemption from the two companies, after Mr. Arvind Datar,
learned Senior Counsel appearing for the SEBI, informed this
Court, that the contemnors including the petitioner herein, had
been asserting that they had refunded Rs.17,443 crores
(approximately) in case of SIRECL and Rs.5,442 crores B
(approximately) in case of SHICL, but had not given any details,
nor produced any relevant record, to show the source from
which they had got the above moneys for repaymerit. This
information, accordir:ig to Mr. Datar, had been sought by the
SEBI from the alleged contemnors through a letter dated c
28.5.2013. Based on the above prayer, we passed the
following order on 11.12.2013:-

"Heard counsel on either side.

Following our orders dated 28.10.2013, 1.11.2013 and D
21.11.2013, Mr. C.A. Sundaram, learned senior counsel,
has taken us through Annexure-A, filed alongwith IA.no. 82
of 2013, which gives details of various properties which
the alleged contemnors have agreed to offer to SEBI.
Reference was specifically made to properties mentioned E
at Item nos. 68, 69 and 70, which, according to Mr.
Sundaram, would fetch a value of more than Rs.11,000
crores.

Mr. Arvind Datar, learned Senior Counsel appearing for
F
the SEBI. prayed for some time to verifv the same as well
as 'the valuation reports filed along with the IA in support
of that prayer. However. he submitted that if it is the stand
of the alleged contemnors that they had refunded the
amounts (Rs.17443 crores approximately in case of
SIRECL and Rs.5442 crores approximately in case of G
SHICU. then they should produce the relevant records.
duly certified by a competent authority which is acceptable
in a Court of law, indicating the sources from which they
got the money for repayment, as requested vide SEBl's
letter dated May 28. 2013. H
738 SUPREME COURT REPORTS [2014] 12 S.C.R.

A Put up on January 09, 2014 at 2.00 p.m."

(emphasis is ours)

111. The fact that the companies had not furnished the
above details, was brought to our notice by Mr. Arvind Datar
8 on 9.1.2014. But the audacity and the fearlessness of the two
companies is apparent, from the' reason expressed to this
Court, for not furnishing the above information. We were
informed, that we had not passed any express direction to the
companies, to furnish the information, therefore the companies
C were not obliged to provide the information to the SEBI.
Ordinarily, an honest person would immediately provide the
information· sought, to obviate any adverse impression.
Moreover, the SEBI had not only the authority, but every reason
to seek the said information. The above stance adopted by the
D two companies, therefore, prompted us on 9.1.2014 to pass
an express order directing the two companies, as also, the
alleged contemnors (including the present petitioner), to furnish
the required particulars. The order dated 9.1.2014 is being
extracted below:-
E
"Heard counsel on either side.

Mr. C.A. Sundaram. learned Senior.Counsel appearing for
one of the alleged contemnors. submitted that earlier this
Court on December 11. 2013 has only reiterated the
F submission made by Mr. Arvind Datar, learned Senior
Counsel appearing for SEBI. that they did not disclose the
source from which they got money for repayment. despite
· SEBl's letter dated May 28, 2013.

G Mr. Sundaram is right in his submission. However, we feel
that it would be appropriate to give a direction of the nature
stated above.

Accordingly, we direct the alleged contemnors to disclose
the complete details and source from which they" repaid
H the amount to the investors as also the manner of making
SUBRATA ROY SAHARA v. UNION OF INDIA 739
[JAGDISH SINGH KHEHAR, J.]
..
payments. They shall also disclose the information which A
SEBI has sought from them from time to time. Such
information shall be provided to SEBI and also be filed in
this Court by Januarv 23. 2014.

Put up on January 28, 2014 at 2.00 p.m.
B
In the meantime. SEBI shall verify the information provided
to it by the alleged contemnors."

(emphasis is ours)

If redemption of funds had actually been made by the two C
companies, they would have immediately furnished the
information sought. Now that there was an express order to
furnish the information, room for any excuse, was ruled out.
Surprisingly, the position remained the same. The two
companies never provided any authentic information. The SEBI, D
SAT and the Supreme Court, were required to accept the
factum of redemption, just because the companies were
asserting the factum of redemption.

118. To persuade the companies once again, to provide E
the information sought by the SEBI, we passed yet another
explicit order on 28.1.2014. The same is being extracted
hereunder:

""Heard Mr. Ram Jethmalani, learned Senior Counsel and
Mr. Arvind P. Datar, learned Senior Counsel. F

Mr. Datar submitted that the Saharas have not disclosed
the details as to when the refund was made. Reference
was made to pages 6 to 9 of the reply affidavit filed today.
G
Mr. Datar further submitted that the SEBI requires an
explanation from Saharas with regard to the payments
made on behalf of Sahara India Real Estate Corporation
Ltd. (SIRECL) (partnership firm) by the following firms, as
mentioned below:-
H
740 SUPREME COURT REPORTS (2014) 12 S.C.R.

A Rupees
(In Crores)
1. Sahara Credit Co-operative Society Ltd. 13,366.18

2. Sahara India Commercial Corporation 4384:00
8 Limited

3. Sahara Q Shop 2258.32

4. Ketak City Homes Ltd. 19.43

c 5. Kiri! City Homes Ltd. 44.05

Similarly, SEBI requires Saharas to show the following
payments made on behalf of Sahara Housing Investment
Corporation Ltd. (SHICL) (partnership firm), by the following
firms, as mentioned below:-
D
Rupees
(In Crores)
1. SICCL 2479.00

2. Sahara Q Shop 2411.90
E
Further, the Saharas will also provide the bank statements
of the above firms showing when the amount was paid to
the partnership firms and subsequently when and how
partnership firm made the disbursement, as sought for by
F the SEBI.

Mr. Ram Jethmalani, learned Senior Counsel appearing
for the respondents submitted that he will examine the
same and come out with a response within a week."
G (emphasis is ours)

The above order is self-explanatory. The two companies, as
also, the contemnors including the present petitioner, were
obviously not providing the required bank statements, even
H though in Appeal no. 49 of 2013 filed by SIRECL before the
SUBRATA ROY SAHARA v. UNION OF INDIA 741
[JAGDISH SINGH KHEHAR, J.] ·
SAT, and in Appeal no. 48 filed by SHICL before the SAT, the A
two companies had committed to furnish their bank accounts,
to establish redemption of payments. The relevant paragraph
containing the undertaking given by SIRECL, is being extracted
hereunder:-
B
"(ee) The Appellant has invested the funds of OFCD as
per the details mentioned in the Affidavit dated 04.01.2012
of Shri B.M. Tripathi filed before the Hon'ble Supreme
Court in Civil Appeal No. 9833 of 2011 which is already
on the record of the Hon'ble Supreme Court. Further, it is
submitted that in order to make redemptions to the OFCD C
holders, the Appellant had to dispose of the investments.
Amounts realized on such disposal were utilized to pay the
investors, on redemption through Sahara India-Partnership
Firm to make the redemptions. The redemptions made to
investors are clearly reflected and found in the Books of D
Accounts of Sahara India. The Appellant crave leave to
refer to and rely upon bank accounts of Sahara India as
and when produced."

(emphasis is ours) E

An exactly similar commitment, in exactly the same words
was made by SHICL, in Appeal no. 48 of 2013, filed by it before
the SAT. Even though the stance adopted by the two companies
was, that verification of redemptions of OFCD's could be
F
established from bank accounts of Sahara India Limited, the
said bank accounts depicting the said transactions were never
disclosed.

119. All that needs to be noticed is, that in furtherance of
the directions issued by this Court, Mr. S. Ganesh, learned G
Senior Counsel, during the course of hearing, produced general
ledger entries of SIRECL and SHICL, to authenticate the receipt
of funds, out of which refunds were made. The general ledger
entries brought to our notice merely indicated large amounts
of inflow/outflow of cash. We had wished to extract the same H.
742 SUPREME COURT REPORTS [2014] 12 S.C.R.

A herein. The entire general ledger entries, placed for the
consideration of the Court to demonstrate receipt of funds, out
of which redemptions were made, would have exposed the
companies' outrageous defence: But since the above entries
would make this judgment unnecessarily bulky, we considered
B it just and appropriate, to extract entries of only one day, i.e.,
of 31.5.2012. A day picked up randomly, without any
comprehension, of its eventual effect. The date was chosen only
with one objective, namely, it fell Y-'ithin the period during which
the two companies claim to have made cash refunds to the
c investors. The same are accordingly reproduced below:-
SAHARA INDIA REAL ESTATE CORPORATION LTD.
6TH FLOOR, CASH & BANK
GENERAL LEDGER
voc. VOC. CHO. NARRATION SUB IE3IT CRE!lr
D ll'\TE NO. No. OFlHE CXXE
\OJCHER

31/0512012 500009 072282 QEQl£ 1,40,00,000.00 1,40,00,000.00
9BV DEPCSTED
BY SAHARA
INDIA
E
31/05:2012 500014 AMT. OF 11,03,260.00
9JV E-TAXPAID
TH. SAHARA
INllA
•
31/0512012 500015 AMT. OF 11,11,321.00
'

F OJV E-TAXPAID
lH.SAHARA
INDIA

31/0512012 500015 BEING JV 40,162.00
SJV NO. 5000120
OT. 260512
WRONGLY CR
G 10
INSURANCE
TO VEHICLE
INSTEAD OF
SINOW
RECilFIED
ANDTRF
H
SUBRATA ROY SAHARA v. UNION OF !NOIA 743
[JAGDISH SINGH KHEHAR, J.]
TOWARDS A
INSURANCE
AMT.
IEU:T8)
FROM SI

1/0512012 500016 BEINGfN 53,75,932.00
1JV N050000360 8
OT 10052012
WRONGLY
CR TOSI
INSTEAD OF
SUNDRY
ADV430109

PAGE TOTAL 53,75,932.00 55,61,27, 771.00
c
CARRED 22,86,45,04, 128.78 30,43, 18,43,975.28
FORWARD

xxx xxx xxx xxx xxx
0
. SAHARA !NOIA REAL ESTATE CORPORATION LTD.
6TH FLOOR, CASH & BANK
GENERAL LEDGER
voe. voe. Q1Q NARRATION SUB a:srr ffiE[X[
D6.TE NO. No. OFlHE CXx:E
\A'.JUCHER E

BROUGHr 22,86,45,04, 128. 78 30,43, 18,43,975.28
FORWARD

31/0512012 50001 BEING AMT KSF 2,000.00
85JV OF SECURITY 0002 F
FUND PAID (13\,P
MS SC YA LOYEE
DAV MSS
Tl-'ROJ3H ING}
CVNO 2,000.
5000530DT 00
310512
G
31/0512012 50001 BEING 6,477.00
87JV AIMOUNTOF
COMMISSION
PAID DURING
lHEMO
MAY-2012
H
744 SUPREME COURT REPORTS . [2014] 12 S.C.R.

A 131/0512012 50001 BEING RENT 6.71,756.00
89JV OF WARE
HOUSES
PR<MDED
FOR THE MIO
MAY·2012AS
Fffi
' .
B AGRm.ENT

1/0512012 50001 BEING 15,24,021.00
91JV AMOUNT '
IE'OSfTE[)
BY SAHARA
.
INDIA
c EMPLOYEES
& EMPLOYER'S
COlllTRIBUTlON
PF, PENSION,
ADM CHG ON
PF, EDU FOR '
THEMIO
APR-2012
D
131/0512012 50001 BEING 22,820.00
96JV AMOUNT OF
EDU
Ci-11\RGES
FOR THE
M/OMAY,
E 2012 PAID BY
sAHARA
INDIA

'131/0512012 50002 BEING AMT 19,42,65,437.00
01JV REC8VABl..E
FROMSICOL .
F ASPER
lERMNAllON
AGREEMENT
1)1>,lEO
11.05.2012
TRFTO
SAHARA
G INDIAASPER
lET11:R '
1)1>,lEO
24.05.2012

131/0512012 50002 BEING AMT 144,04,86,210.00
3JV REC8VABl..E
H
SUBRATA ROY SAHARA v. UNION OF INDIA 745
[JAGDISH SINGH KHE!-IAR. J.]

"FROMSICOL A
f>.SPER
lERMNAllON
AGREEMENT
DAlED
11.05.2012
lRFTO
SAHARA B
INDIA Af3 PER
l.£TTER
DAlED
25.05.2012

31/0512012 50002 BEING 5.37,87,17,066.00
07JV AMOUNT c
RECEIVABLE
FROJI
SQSURPL
AGAINST
AGRffilENT
OT. 31.05.12
lRFD.TO D
SAHARA
INDIAJ>.S
PER LETTER
OT. 31.05.12
&ADV. OF4
SUBIALSO
TRF E
31/0512012 50002 BEING 4,57, 140.00
07JV AMOU!'fl"
RECEIVABLE
FROJI
SQSURPL
AGAINST F
. AGREEMENT
OT. 31.05.12
lRFD.TO
SAHARA
INDA/>SPER
l£TTER
OT. 31.05.12 .
G
&ADVOF4
SUBIALSO
TRF.

31/0512012 50002 BEING AMT 14,37.~0,00,000.00
11JV RECEIVABLE
FROJI
'
H
746 SUPREME COURT REPORTS [2014) 12 S.C.R.

A
INDIA ASPER
SIRECL
I.ETIER
Cl'\TED
11.05.12

B 31/0512012 50002 EisNG 1,33,66, 18, 11,270.00
13JV AMOUNT
RECEIVABl..E
FRCM
SCCSL
TOWARDS
SALE OF
c SHARES
!'ON
RECEIVABl..E
FRCM
.
SAHARA
· INDIAAS
PERLETER
D ENCLD.
31/0512012 50002 BEING AMT 10,464.00
15JV OF&NF
[)E[)£TE!)
OORING'IHE
M/OMAY-12
E 31/0512012 50002 BEING AMT 50.00
16JV OFRNE&
PENALTIES
[)E[)£TE!)
FRCM
WORKER IN
M/OMAY-
F 2012

31/0512012 50002 BEING AMT 40.00
17JV [)E[)£TE!)
TOWARDS
APNA
PARIWAR
G OORING'IHE
M/OMAY-12
31/0512012 50002 BEING AMT 58.00
1BJV OFS&NF
[)E[)£TE!)
OORINGlHE
M/OMAY-12
H
SUBRATA ROY SAHARA v. UNION OF INDIA 747
[JAGDISH SINGH KHEHAR, J.]
31/0512012 50002 BEING 60.00 A
19JV AMOUNT
RECO\/ERED
FROMF.W.
!JJRJNGTHE
MIO MAY-12
.
.

31/05/2012 50002 BEING 48.00 B
20JV SERlllCE
a-G
RECEIVED
INTHE
M/OMAY-
2012
c
31/05/2012 50002 BEING 57,69,750.00
21JV AMOUNT
RECEIVED
FRCM
CUSTaVIER
CURING
THEM/O D
MAY-12

31/0512012 PAGE TOTAL 1,54,05, 15, 19,593.00 22,25,074.00

31/0512012 CARRIED 1,76,91,60,23,721.78 b0,43,40,69,049.28
FORWARD
E
xxx xxx xxx xxx xxx
SAHARA INDIA REAL ESTATE CORPORATION LTD.
6TH FLOOR, CASH & BANK
GENERAL LEDGER
voc. voc. NARRATION SUB W3rr ffiEllT
F
CHO.
Db.TE 00. No. OF THE CXXE '
VOUCHER
BROUGHT FORWARD ~ '76,91,60,23,721.78 bo,43,40,69,049.28

31/0512012 500022 BEINGAMOIJT 1,08,966.00 G
2JV RECEIVED
FRCM
OJSTaAER
!ll.RNG
THEM/O
MAY-12
H
748 SUPREME COURT REPORTS [2014) 12 S.C.R.

A 31/0512012 50002 BEll'r3 . 28,22,765.00
23JV AMOl.MT
RECEIVED
FRaA
aJSra\.1ER
DURll'r31HE
M/OMAY-12
B •
31/05/2012 50002 BEll'r3 49,547.00
24JV AMOUNT
RECEIVED
FRaA
a.JS'TWER
DURll'r31HE
. c M/OMAY-12

31/0512012 50002 BEll'r3 11.00
25JV AMOUNT
RECEIVED
FROMF.W.
DURll'r31HE
D M/OMAY-12·

31/0512012 50002 BEll'r3 37,39,86,45,750.00
26.N AMOUNT
PAIDTO
OOND
HOLDERS
E DJRJl'r3
1HEM'O
MAY-12

31/0512012 50002 BBNGINTT. 12,22,41,30,389.0C
27.N PAIDTO '
OOND
F HOLDERS
DJRJl'r3 I
1HEM'O
MAY-12

31/0512012 50002 BBNGAMT 59,72,79,970.00
28.N PAIDTO
OOND
G HOLDER
TOWARDS
LOAN
.
AGAINST
crco
DURINGlHE
M/OMAY-12
H
SUBRATA ROY SAHARA v. UNION OF INDIA 749
[JAGDISH SINGH KHEHAR, J.]
31/0512012 50002 BEING AMT 1.13.05.48.059.00 A
29JV RECOJERED
FROM BOND
HOl.DERS
OORINGlHE
M/OMAY-12
TOWARDS
LOAN GIVEN B
AGAINST
OFCD

31/0512012 50002 BEINGINTT 15,35,36.852.00
30JV RECOJERED
FROM BOND
HOl.DERS c
OORINGlHE
M/OMAY-12
TOWARDS
LOAN GIVEN
AGAINST
OFCD
D
31/05/2012 50002 BEINGlDS 1,50,03,876.00
31JV IEl..CTED
OORINGTI-IE
M/OMAY-12
AGAINSTINTT
PAIDTO
EO\O E
I-OLDER

31/05/2012 50002 BEING 30,24,984.00
32JV AMOUNT OF
CCMJISSKlN
PAIDTO
OlHERlHAN F
SIRECL STAFF

~1/05/2012 50002 l3EN3 1,61,17,023.00
34JV CXM/ISSION
PAIDOORING
lHEM'O
MAY-12·
G
31/05/2012 50002 BEN3 7,020.00
35JV AMOUNT OF
DEAlHHELP
PAIDTO
oct<'D
I-OLDER H
750 SUPREME COURT REPORTS [2014] 12 S.C.R.

A (the sole cheque entry has bee'n underlined, all the
remaining entries are cash entries).

A perusal of the above general ledger entries reveals just
one cheque entry, and enormous inflow/outflow of funds by way
B of cash. On a single day (31.5.2012), the cash inflow is shown
as Rs.15,535,89,65,601.00 (i.e. more than rupees fifteen
thousand five hundred and thirty five crores). Mind boggling
inflows, just by cash. Most certainly not acceptable as true,
unless there is authentic supporting material. Can these general
C ledger entries ever be the basis for accepting, that the entire
cash transactions were correct? We do not think so. Mr. S.
Ganesh, learned Senior Counsel for the pet.itioner, was
surprisingly in agreement with us. But his pointed submission
was, that the above entries assumed authenticity, because they
had been duly audited by a firm of Chartered Accountants. Our
D attention was invited to the two certificates issued by the firm
of Chartered Accountants, both dated 31.1.2014, which were
placed on the record of the case by the petitioner, for our
consideration. The certificate pertaining to SIRECL is being
reproduced hereunder:-
E
"CA DE & Bose

in association with ASH Associates UK
812, Kiran Sankar Roy Road, 2nd Floor
F Room no. 1 & 18, Kolkata - 700 001
Ph.: 22485039. Fax: 91-33-2243-4864
E-mail: durgadas@cal3.vsnl.net.in
1, Garstin Place, Unit 1E, ORBIT;
Kolkata - 700 001. Phone: 2248 7424
G TO WHOM IT MAY CONCERN

We, Mis. DE & Bose, Chartered Accountants, Statutory
Auditor of M/s. Sahara India Real Estate Corooration
Limited, registered office at Sahara India Bhawan, 1,
Kapoorthala Complex, Aliganj, Lucknow - 226024, have
H
SUBRATA ROY SAHARA v. UNION OF INDIA 751
[JAGDISH SINGH KHEHAR, J.]
performed the following procedures in carrying out the A
Special Assignment:

1. We have examined books and records provided to
us and also obtained the relevant information and
explanation which to the best of our knowledge and
B
belief were necessary to give this certificate.

2. We have relied upon the system and procedure of
the company, books, records, documents, bank
statements, clarifications, representations,
information and statements made available to us C
and also done verification and scrutiny of the same.

Based on the above procedures and verification. we certify
that M/s. Sahara Indian Real Estate Corporation Limited
had subscription of Optionally Fully Convertible Debentures D
of approximately Rs.748.75 crores (covering 2,92,344
control numbers) through cheque. Further till March. 2013.
Rs.1. 151.02 crores (covering 6, 70,677 control numbers)
were paid to the Optionally Fully Convertible Debenture
holders on account of redemption/pre-redemption through
E
cheque.

For De & Bose

Chartered Accountants
F
Firm Regn. No. 302175E
Date: 31.01.2014 Sd/-
Place: Kolkata (Subrata De)
Partner
Membership no. 054962" G
(emphasis is ours)

The second certificate pertaining to SHICL is also being
reproduced hereunder:-
H
752 SUPREME COURT REPORTS [2014] 12 S.C.R.

A "CA DE & Bose

in association with ASH Associates UK
8/2, Kiran Sankar Roy Road, 2nd Floor
Room no. 1 & 18, Kolkata - 700 001
B Ph.: 22485039. Fax: 91-33-2243-4864
E-mail: durgadas@cal3.vsnl.net.in
1, Garstin Place, Unit 1E, ORBIT,
Kolkata -'700 001. Phone: 2248 7424
TO WHOM IT MAY CONCERN
c
We, Mis. DE & Bose, Chartered Accountants, Statutory
Auditor of M/s. Sahara Housing Investment Corporation
Limited, registered office at Sahara India Point, CTS-40
& 44, S.V. Road, Goregaon (West), Mumbai - 400 104,
D Maharashtra have performed the following procedures in
carrying out the Special Assignment:

1. We have examined books and records provided to
us and also obtained the relevant information and
explanation which to the best of our knowledge and
E belief were necessary to give this certificate.

2. We have relied upon the system and procedure of
the company, books, records, documents, bank
statements, clarifications, representations,
F information and statements made available to us
and also done verification and scrutiny of the same.

Based on the above procedures and verification. we certify
that M/s. Sahara Housing Investment Corporation Limited
had subscription of Optionally Fully Convertible Debentures
G of approximately Rs.324.62 crores (covering 91,970
control numbers) through cheque. Further till March. 2013,
Rs.14.66 crores (covering 10,501 control numbers) were
paid to the Optionally Fully Convertible Debenture holders
on account of redemption/pre-redemption through cheque.
H
SUBRATA ROY SAHARA v. UNION OF INDIA 753
[JAGDISH SINGH KHEHAR, J.]
For De & Bose A
Chartered Accountants
Firm Regn. No. 302175E
Date: 31.01.2014 Sd/-
Place: ·Kolkata (Subrata De)
Partner B
Membership no. 054962"
(emphasis is ours))

A perusal of the above certificates reveals, that the above
firm of Chartered Accountants, confirmed the redemption of c
OFCD's which were made by way of cheque only. Both the
above certificates an~ silent on the redemptions made by way
of cash. The firm of Chartered Accountants, therefore, did not
choose to confirm the redemption of OFCD's made by way of
. cash. This action must be deemed to be conscious, otherwise D
it was not necessary even to confirm the redemptions made
by way of cheque. It was the clear contention of Mr. S. Ganesh,
learned Senior Counsel before us, that approximately 95% of
the OFCD's were refunded by cash, and only 5% of the
OFCD's were refunded by way of cheques. Even if the E
certificates issued by the firm of Chartered Accountants were
to be accepted to be correct (even though there seems to be
no justifiable basis for the same), the authenticity of the general
ledger entries was expressly only in respect of payments made
by the two companies, by way of cheque. There is no
authenticity whatsoever, in respect of payments made by way F
of cash. It is, therefore, not possible for us, on the basis of the
record made available to us to accept, that any relevant material
had been made available to us till date. We wish to express,
that no other record, besides the above general ledger entries,
was brought to our notice, to demonstrate the factum of alleged G
redemptions. Therefore, even a prima facie finding cannot be
recorded, that the two companies had made available to this
Court, any relevant material, wherefrom an inference could be
drawn, that any redemption had ever been made to the
investors, i.e., to the OFCD holders. H
754 SUPREME COURT REPORTS (2014] 12 S.C.R.

A 120. We have examined the above issue of redemptions
only for the petitioner's satisfaction. As a matter of law, it does
not lie in the mouth of the contemnors, to agitate the issue of
redemption. Insofar as the instant aspect of the matter is
concerned, it is necessary to highlight the fact, that the order
B dated 31.8.2012 directed the two companies, to deposit with
the SEBI, the entire redeemable amount along with interest at·
the rate of 15%. The above deposit had to be made within a
period of three months, i.e., by 30.11.2012. The case set up
by the two companies has been, that SIRECL had already
c refunded Rs.17,443 crores to the investors, and SHICL had
likewise refunded Rs.5,442 crores. The two companies
therefore assert, that they cannot be required to make the same
payment to the investors, for the second time. It would be
pertinent to mention, that the two companies had .approached
this Court by filing Civil Appeal no. 8643 of 2012 (and Writ
D Petition (Civil) no. 527 of 2012). In the said proceedings, the .
two companies had sought exemption from depositing -the
amounts, which-they had allegedly redeemed. The three-Judge
Division Bench, which heard the _matter(s), did not accept the
redemption theory projected by the two companies.
E Accordingly, the prayer made by the two companies in Civil
Appeal no.8643 of 2012 (and Writ Petition (Civil) no. 527 of
2012) for deduction-of the above amount, was not accepted
by this Court, when it passed the final order dated 5.12.2012.
Accordingly, the companies were directed to deposit the entire
F balance amount of Rs.17,400 cro'res. It is, therefore imperative
to conclude. that the issue of deduction of allegedly redeemed
funds, stood concluded against the two companies, when this
Court passed its order dated 5.12.2012. This plea is no longer
available to the two companies, in law. To continue to harp on
G the alleged redemptions, is clearly a misrepresentation,
specially when the order dated 5: 12.2012 has attained finality ..

121. Therefore, viewed from any angle, there is no
substance in the contention advanced on behalf of the two
H companies, that the moneys payable to the investors had been
SUBRATA ROY SAHARA v. UNION OF INDIA 755
[JAGDISH SINGH KHEHAR, J.]
refunded to them. Accordingly, there is no merit in the prayer, A
that while making payments in compliance with this Court's
orders dated 31.8.2012 and 5.12.2012, the two companies
were entitled to make deductions of Rs.17,443 crores (insofar
as SIRECL is concerned) and Rs.5,442 crores (insofar as
SHICL is concerned). Be that as it may, we have still retained B
a safety valve, inasmuch as, the SEBI has been directed to
examine the authenticity of the documents produced by the two
companies, and in case the SEBI finds, that redemptions have
actually been made, the two companies will be refunded the
amounts, equal to the redemptions found to have been c
genuinely made.

122. We are persuaded to record, that either the
submissions made to this Court on the subject of refunds made
by the two companies were false; or the present projection of
the two companies of their inability to pay the investors is false. D
One learned Senior Counsel for the petitioner, Mr. S. Ganesh,
during the course of his narration, in order to substantiate the
redemption of OFCD's to the tune of thousands of crores of
rupees, referred to the collection of thousands of crores of
rupees in successive months, during the year 2012, from the E
account books of the two companies. On a single day
(31.5.2012), the cash inflow is shown as
Rs.15,535,89,65,601.00 (i.e. more than Rupees· fifteen
thousand five hundred and thirty five crores). This was done by
collecting funds from all companies (and firms, under the F
conglomerate) of the Sahara Group. If it was possible to do that,
at that juncture, in order to redeem the payments claimed by
investors, we fail to understand why the same cannot be done ·
now. Specially when, as already noticed hereinabove, the book
value/market value of the properties of the Sahara Group G
conglomerate, is to the tune of Rs.1,52,500 crores (as per its
own website). It is after all, close to 2 years (about 20 months)
since the order dated 31.8.2012 was pronounced, and close
to 1'h years (about 17 months) since the order dated 5.12.2012
was passed. H
756 SUPREME COURT REPORTS [2014] 12 S.C.R.

A X. The maintainability of the present petition

123. At the very commencement of hearing, Mr. Arvind
Datar, learned Senior Counsel representing the SEBI, raised
a preliminary objection. He contested the very maintainability
B of the instant petition. He invited our attention to the heading
of the petition, which is extracted hereunder:

"PETITION UNDER THE POWERS OF THIS COURT TO
ACT EX DEBITO JUSTITIAE A POWER EXPRESSLY
RECOGNIZED BY THE AUTHORITIES MENTIONED IN
C THE PARA 'A' OF THIS PETITION."

It was his vehement contention, that the instant petition
does not disclose the provisions under which it had been filed.
In this beh?lf, it was sought to be asserted, that the right to
D maintain a petition can only emerge from a statutory provision,
or a constitutional mandate. It was also submitted that neither
a maxim of law, nor a decision of a Court, could create
jurisdiction in a Court.

124. The objection of jurisdiction, raised by the learned
E Senior Counsel representing the SEBI, met with the strangest
possible response from the learned Senior Counsel
representing the petitioner. It was a response of a nature which
we hac:J not experienced in our professional careers as
Advocates, or even in approximately one and a half decades
F of service rendered as Judges. It is necessary to point out, that
when the above objection was raised, we had informed learned
Senior Counsel representing the SEBI, that we would not stand
on technicality, inasmuch as, if the instant petition was
maintainable under one or the other provision of law, we would
G read that provision in the title of the present petition, even
though the same had not been expressly mentioned therein.

125. When confronted with the objection of maintainability,
Mr. Ram Jethmalani, learned Senior Counsel, adopted the
H positive stance, that there was no deficiency in the title of the
SUBRATA ROY SAHARA v. UNION OF INDIA 757
[JAGDISH SINGH KHEHAR, J.]
petition. In his view, the instant petition was maintainable under A
the maxim of ex debito justitiae, a power which has been
expressly recognized by this Court in A.R. Antulay's case
(supra). The decision in A.R. Anulay's case (supra) was
rendered by a Constitution Bench of seven Hon'ble Judges of
this Court. According to Mr. Ram Jethmalani, in the above B
judgment, the proposition canvassed by him, had been upheld
by a majority of 5:2. He pointedly asserted, that we should
record his submission to the effect, that he had ever contended
that the instant petition was maintainable either under Article
32 of the Constitution of India, or jointly under Articles 129 and c
142 of the Constitution of India. In fact he submitted, that he had
authored the present criminal writ petition. And in the process,
he had extensively researched on the issue of jurisdiction,
before filing this petition. His unambiguous assertion on the
subject of jurisdiction was, that the petition had not been filed D
under a legislative enactment of the Constitution of India. It has
been filed under the maxim ex debito justitiae.

126. In contradistinction to th~ submissions advanced at
the hands of Mr. Ram Jethmalani, Mr. C.A. Sundaram, learned.
Senior Counsel, who also represented the petitioner, invited our E
attention to the prayers made in the instant petition. To
understand the tenor of his submission, the prayers made in
the petition are being extracted hereunder:

"PRAYER F
It is therefore most graciously prayed that this Hon'ble
Court may be pleased to:-

(a) Declare the order dated 04.03.2014 as void, nullity
and non-est in the eyes of law; G

(b) Declare that the incarceration and the custody of
the Petitioner are illegal which should be terminated
forthwith;

(c) issue such other writ in the nature of Habeas or H
758 SUPREME COURT REPORTS [2014) 12 S.C.R.

A other writs, order or direction for release of the
Petitioner from the illegal custody;

(d) pass such further orders as this Hon'ble Court may
deem fit and proper in the facts and circumstances
of the case."
B
Referring to prayer (a) extracted above, it was submitted, that
the declaration sought in the instant prayer would be in the
nature of a writ of certiorari. Referring to clause (b) of the prayer
clause, it was contended, that the declaration sought therein
C would be in the nature of a writ of certiorarified mandamus.
Insofar as prayer clause (c) is concerned, it was asserted, that"
the prayer sought was in the nature of a writ of habeas corpus.
In the above view of the matter, it was the submission of Mr.
C.A. Sundaram, that the jurisdiction of this Court to issue writs,
D could be invoked only under Article 32 of the Constitution of
India. As such, it was his submission, that the instant petition
be treated as having been filed under Article 32 of the
Constitution of India. In other words, the contention of Mr. C.A.
Sundaram, learned Senior· Counsel was, that the title of the
E petition be read by including Article 32 of the Constitution of
India therein .. In fact, it was the pointed submission of the
learned counsel, that he should not be taken as having
canvassed, that the instant petition was maintainable on
ac·count of the jurisdiction evolved through the judgment
F rendered by this Court in A.R. Antulay's case (supraJ: He also
contended, that he should not be taken to have canvassed, that
the present petition is maintainable under Article 129 read with
Article 142 of the Constitution of India.

127. Dr. Rajeev Dhawan, was yet another learned Senior
G Counsel, who represented the petitioner. His candid contention
was, that he could not accept the submissions on the subject
of jurisdiction, as had been canvassed by his colleagues, Mr.
Ram Jethmalani and Mr. C.A. Sundaram. It was his assertion,
that the prayers made in the instant petition could be sought
H by the petitioner, only under Articles 129 and 142 of the
SUBRATA ROY SAHARA v. UNION OF INDIA 759
[JAGDISH SINGH KHEHAR, J.]
Constitution of India. As such, he submitted that the title of this A
petition be read by including therein, Articles 129 and 142 of
the Constitution of India.

128. It is apparent from the submissions advanced at the
hands of the learned counsel for the petitioner, that even learned B
counsel representing the petitioner, were not sure about the
maintainability of the instant petition. Each of them while
adopted an independent stance, and was unwilling to accept
the position adopted by his other two colleagues. In the above
view of the matter, we would have been happy to follow a simple
-C
course. To reject the petition's maintainability, on the basis of
the majority view, expressed by the learned counsel
representing the petitioner himself. Such rejection would be, by
a majority of 2:1. Learned counsel were probably independently
conscious of the legal position, that the petition was not
maintainable. Unfortunately, this course is not open to a Court D
of law. We will have to examine the maintainability of the
petition, by taking into consideration all the perspectives
presented before us. The burden will naturally be three-folds
than the usual. However, keeping in mind the eminence of the
learned Senior Counsel who represented the petitioner, it is not E
possible for us, at first blush, to draw any such inference. We
shall endeavour to independently determine the issue of
maintainability, canvassed at the hands. of all the learned
counsel representing the petitioner. In case we arrive at the
conclusion, that the submission of any one of the learned F
counsel is acceptable, we would treat the instant petition as
maintainable.

129. First arid foremost, on the subject of maintainability,
we shall determine the veracity of the submissions advanced G
at the hands of Mr. Ram Jethmalani, Senior Advocate. To
substantiate his contention learned counsel placed reliance,
only on the judgment rendered by this Court in A.R. Antulay's
case (supra). Before examining the decision rendered by this
Court in the above judgment, we shall summarise the factual
H
760 SUPREME COURT REPORTS (2014] 12 S.C.R.

A context, in which the aforesaid judgment was rendered. The
appellant in the above case, A.R. Antulay was the Chief Minister
of the State of Maharashtra from 1980 to 1982. R.S. Nayak
belonged to a rival political party. R.S. Nayak filed a complaint
before the Additional Metropolitan Magistrate, Bombay, under
B Sections 161 and 165 of the Indian Penal Code and Section
5 of the Prevention of Corruption Act, as also, under Sections
384 and 420 read with Sections 109 and 120-B of the Indian
Penal Code. The complaint was not only against the appellant
A.R. Antulay, but also against other known and unknown
c persons. Since sanction for prosecution had not been granted,
the concerned Magistrate refused to take cognizance. To assail
the order of the Magistrate, a criminal revision application came
to be filed. In the meantime, the Governor of the State of
Maharashtra accorded sanction. R.S. Nayak thereupon, filed
a fresh complaint in the Court of the Special Judge, Bombay,
0
alleging the commission of the same offences, which were the
subject matter of the complaint earlier filed by him, before the
Magistrate. The Special Judge, Bombay, issued summons to
the appellant - A.R. Antulay. On entering appearance A.R.
Antulay adopted the stance, that the Special Judge, Bombay,
E had no jurisdiction to entertain the complaint. For the aforesaid
objection, he placed reliance on Section 7 of the Criminal Law
Amendment Act, 1952. He also asserted, that cognizance could
. not be taken by the above Court, on the basis of a private
complaint. The Special Judge, Bombay, overruled the
F objections raised by A.R. Antulay, and listed the matter for
recording evidence of the complainant's witnesses. The
aforesaid order of the Special Judge, Bombay, was assailed
by A.R. Antulay, by filing a criminal revision petition, before the
Bombay High Court. The said petition was dismissed. The
G order of the High Court was then assailed before this Court.
This Court granted special leave to A.R. Antulay, on the issue
as to whether, a private complaint was maintainable. In the
meantime, an objection was raised by A.R. Antulay before the
Special Judge, Bombay, to the effect, that he could not be
H prosecuted without sanction of the competent authority. His
SUBRATA ROY SAHARA v. UNION OF INDIA 761
[JAGDISH SINGH KHEHAR, J.]
instant plea was based on the fact, that he still continued to be A
a Member of the Legislative Assembly, and as such, sanction
was an essential pre-condition, before his prosecution. The
above plea, was accepted by the Special Judge, Bombay. R.S.
Nayak, then filed a criminal revision petition before the High
Court, questioning the above order. The High Court upheld the B
order passed by the Special Judge, Bombay. R.S. Nayak then
approached this Court. This Court granted special leave,
against the decision of the High Court, holding that sanction
was necessary before A.R. Antulay could be prosecuted. The
aforesaid Criminal Appeals were heard by a five-Judge c
Constitution Bench of this Court. Even though, the same Bench
heard the matters, the two appeals were disposed of by two
separate judgments. The appeal preferred by R.S. Nayak was
accepted. This Court held, that as a Member of the Legislative
Assembly, A.R. Antulaywas not a public servant, and therefore, 0
no sanction was required for his prosecution. In the above view
of the matter, it is apparent, that this Court set aside the order
of discharge passed by the Special Judge, Bombay. This
Court accordingly directed the trial Court, to proceed with the
trial of the matter. While disposing of the two cases referred to
hereinabove, this Court having taken into consideration the fact, E
that A.R. Antulay had already suffered adversely, as his
· reputation was tarnished by the imputations levelled against
him, for a period of two arid a half years (i.e., the period during
which the controversy had remained pending), felt that he
deserved an expeditious trial. In the aforesaid view of the F
matter, while disposing of the two matters referred to above,
this Court directed, that the cases filed against A.R. Antulay
before the Special Judge, Bombay, be withdrawn and be
transferred to the High Court of Bombay for trial. The Chief
Justice of the High Court of Bombay was also requested, to G
assign the trial of the matter, to a sitting Judge of the High Court,
so as to conclude the matter by holding day-to-day
proceedings. Accordingly, trial commenced before a Single
Judge of the High Court of Bombay in 1984. A.R. Antulay again
contested the maintainability of the trial proceedings, before the H
762 SUPREME COURT REPORTS [2014] 12 S.C.R.

A High Court of Bombay. The learned Single Judge hearing the
matter, rejected the plea canvassed at the hands of AR. Antulay
by concluding, that the High Court was bound by the order
passed by this !::ourt. In the above' circumstances, AR. Antulay
filed a writ petition before this Court, under Article 32 of the
B Constitution of India. A two-Judge Division Bench of this Court,
dismissed the petition. Whilst one of the Judges expressed the
view, that the learned Single :Judge of the Bombay High Court
was not only justified, but was also duty bound to follow the
decision of this Court, which was binding on him; the second
c .Judge on the Bench expressed the view, that the challenge
raised by the petitioner (by assailing the validity of the judgment
rendered by this Court, as incorrect or a nullity) could not be
entertained. The second Hon'ble Judge, therefore, granted
liberty to A.R. Antulay, to approach this Court with an
appropriate review petition, if the petitioner -AR. Antulay was
0
so advised. Having examined the witnesses produced by R.S.
Nayak before the learned Single Judge of the High Court, 21
charges came to be framed (out of 43 draft charges, which
were placed before the Court, for its consideration) against
AR. Antulay. At the instance of the rival parties, the matter
E again came to this Court, for determining the validity of the order
framing only 21 charges. In the juqgment rendered by this Court
in A.R. Antulay's case (supra), this Court held, on facts, that a
prima facie case had also been made out against A.R. Antu lay,
in respect of some of the allegations, in furtherance whereof
F no charges had been framed. This Court accordingly, set aside
the order of the High Court refusing to frame charges, in
respect of some of the alleged offences, on which A.R. Antu lay
had been discharged. Thereupon, the learned Single Judge of
the High Court framed 79 charges against A.R. Antulay. The
G High Court simultaneously rejected the application made by
A.R. Antu lay, for proceeding against the alleged co-
conspirators. A.R. Antulay, then challenged the aforesaid order
of the High Court before this Court. He, inter alia, questioned
the High Court's jurisdiction to try the case. He alleged that his
H trial by the Single Judge of the High Court, was in violation of
SUBRATA ROY SAHARA v. UNION OF INDIA 763
[JAGDISH SINGH KHEHAR, J.)
Articles 14 and 21 of the Constitution of India. The contention A
advanced on behalf of A.R. Antulay was, that he could be tried
only in accordance with the procedure established by law. This
plea was raised under Article 21 of the Constitution of India.
A.R. Antulay relied on Section 7(1) of the Criminal Law
Amendment Act, 1952, which expressly provided B
(notwithstanding anything contained in the Code of Criminal
Procedure or any other law), that the offences under Section
· 6(1) would be triable by a Special Judge only. It was, therefore,
sought to be asserted, that his trial by the Single Judge of the
High Court, was in clear violation of his constitutional rights, and c
the aforesaid legislative mandate. A.R. Antulay alleged
prejudice by asserting, that four of his valuable rights had been
taken away when this Court had passed the diredion, whereby
his trial was withdrawn from the Court of the Special Judge,
Bombay, and transferred to the High Court. In this behalf, it was
0
his contention, that he was deprived of the right to trial by a
Special Judge, in accordance with the.procedure established
by law, i.e., procedure which had been enacted by Parliament.
He also asserted, that his right of revision to the High Court
under Section 9 of the Criminal Law Amendment Act, 1952,
had been taken away. It was also his submission, that had the E
Special Judge, Bombay conducted his trial, he would have had
a right of first appeal, to the High Court. The .above right which
was vested in him under Section 9 of the Criminal Law
Amendment Act, 1952, was also allegedly taken away. He also
asserted, that under the provisions of the Criminal Law. F
. Amendment Act, 1952, besides preferring an appeal to the
High Court, he would have a right of a second appeal before
this Court under Article 136 of the Constitution of India. It was
his contention, that the right to prefer a second appeal, was also
sought to be taken away from him. Besides, alleging the G
deprivation of the above valuable rights, it was also the
contention of A.R. Antu lay before this Court, that this Court had
suo motu directed withdrawal of the case against A.R. Antu lay
from the Special Judge, Bombay, and transferred the same to
the High Court without affording any opportunity of hearing to H
764 SUPREME COURT REPORTS [2014) 12 S.C.R.

A him. It was, therefore, sought to be asserted, that the above
order passed by the High Court, was clearly in violation of the
principles of natural justice, and accordingly, the same violated
his fundamental rights, causing grave prejudice to him, and
therefore, deserved to be set aside.
B
130. From the judgment rendered by this Court in A.R.
Antulay's case (supra), Mr. Ram Jethmalani relied upcin the
following observations:-

"79 .... These directions were void because the power was
c not there for this Court to transfer a proceeding under the
Act of 1952 from one Special Judge to the High Court. This
is not a case of collateral attack on judicial proceeding: it
is a case where the court having no court superior tci it
rectifies its own order. We recognise that the distinction
D between an error which entails absence ofiurisdiction and
an error made within the jurisdiction is verv fine. So fine
indeed that it is rapidly being eroded as observed by Lord
Wilberforce in Anisminic Ltd: v. Foreign Compensation
Commissioner, (1969) 1 All E.R. 208. Having regard to the
E enormity of the consequences of the error to the appellant
and by reason of the fact that the directions were given suo
motu, we do not find there is anything in the observations
of lttavira Mathai v. Varkey Varkey (1964) 1 SCR 495
which detract the power of the court to review its judgment
F ex debito justitiae in case injustice has been caused. No
court. however high. has jurisdiction to give an order
unwarranted by the Constitution and, therefore, the
principles of Bhatia Co- operative Housing Society Ltd. v.
D. C. Patel, (1953) SCR 185, would not apply.
G 80. In giving the directions this Court infringed the
constitutional safeguards granted to a citizen or to an
accused and injustice results therefrom. It is just and proper
for the court to rectify and recall that injustice. in the peculiar
(acts and circumstances of this case.
H
SUBRATA ROY SAHARA v. UNION OF INDIA 765
[JAGDISH SINGH KHEHAR, J.]
81. This case has caused us considerable anxiety. The A
appellant-accused has held an important position in this
country, being the Chief Minister of a premier State of the
country. He has been charged with serious criminal
offences. His trial in accordance with law and the
procedure established by law would have to be. in B
accordance with the 1952 Act. That could not possibly be
done because of the directions of this Court dated
February 16. 1984. as indicated above. It has not yet been
found whether the appellant is guilty or innocent. It is
unfortunate, unfortunate for the people of the State, c
unfortunate for the country as a whole, unfortunate for the
future working of democracy in this country which, though
is not a plant of an easy growth yet is with deep root in
the Indian polity that delay has occurred due to procedural
wrangles. The appellant may be guilty of grave offences 0
alleged against him or he may be completely or if not
completely to a large extent, innocent. Values in public life
and perspective of these values in public life, have
undergone serious changes and erosion during the last
few decades. What was unheard of before is
E
commonplace today. A new value orientation is being
undergone in our life and in our culture. We are at the
threshold of the cross-roads of values. It is, for the
sovereign people of the country to settle these conflicts yet
the courts have vital roles to play in such matters. With the
avowed object of speedier trial the case of the appellant F
had been transferred to the High Court but on grounds of
expediency of trial he cannot be subjected to a procedure
unwarranted by law. and contrary to the constitutional
provisions. The appellant may or may not be an ideal
politician. It is a fact, however, that the allegations have G
been brought against him by a person belonging to a
political party opposed to his but that is not the decisive
factor. If the appellant - Shri Abdul Rehman Antulay has
infringed law, he must be dealt with in accordance with the
law. We proclaim and pronounce that no man is above the H
766 SUPREME COURT REPORTS [2014] 12 S.C.R.

A law, but at the same time reiterate and declare that no man
can be denied his rights under the Constitution and the
laws. He has a right to be dealt with in accordance with
· the law and not in derogation of it. This Court. in its anxiety
to facilitate the parties to have a speedy :rial gave
B ,directions on February 16, 1984 as mentioned
hereinbefore without conscious awareness of the exclusive
jurisdiction of the Special Courts under the 1952 Act and
that being the only procedure established by law, there can
be no deviation from the terms of Article 21 of the
c Constitution of India. That is the only procedure under
which it should have been guided. By reason of giving the
directions on February 16. 1984 this Court had also
unintentionally caused the appellant the denial of rights
under Article 14 of the Constitution by denying him the
equal protection of law by being singled out for a special
D
procedure not provided for by law. When these factors are
· brought to the notice of this Court, even if there are any
technicalities this Court should not feel shackled and
decline to rectify that injustice or otherwise the injustice
noticed will remain forever a blot on justice. It has been
E said long time ago that "actus curiae neminem gravabit" -
an act of the Court shall prejudice no man. This maxim is
founded upon justice and good sense and affords a safe
and certain guide for the administration of the law.

F xxx xxx xxx xxx xxx
83 .... lt appears that in giving directions on February 16,
1984, this Court acted per incuriam inasmuch ii did not
bear in mind consciously the consequences and the
provisions of Sections 6 and 7 of the 1952 Act and the
G
binding nature of the larger Bench decision in Anwar Ali
Sarkar case, 1952 SCR 284 which was not adverted to
by this Court. The.basic fundamentals of the administration
of justice are simple. No man should suffer because of the
mistake of the court. No man· should suffer a wrong by
H
SUBRATA ROY SAHARA v. UNION OF INDIA 767
(JAGDISH SINGH KHEHAR, J.]
technical procedure of irregularities. Rules or procedures A
are the handmaids of justice and not the mistress of the
justice. Ex debito justitiae, we must do justice to him. If a
man has been wronged so long as it lies within the human
machinery of administration of justice that wrong must be
remedied. This is a peculiar fact of this case which B
requires emphasis."

(emphasis is ours)

Based on the above parameters recorded in A.R. Antulay's
case (supra), Mr. Ram Jethmalani, learned Senior Counsel C
vehemently contended, that the maxim of actus curiae
neminem gravabit, meaning, the act of a Court will not
prejudice any man, is founded on the principle of Justice
and good conscience. The above principle affords a safe
and certain guide for the administration of law. It was D
pointed out, that Courts in England abide by the principle,
that the size of the Bench did not make any difference for
the adjudication of a controversy. It was submitted, that the
. aforesaid concept was not valid in this country. We were
informed, that the law laid down by this Court established E
a hierarchy within this Court itself, whereby decisions of a
larger Bench binds a smaller Bench. It was submitted, that
a larger Bench can override the decision of a smaller
Bench. It was, therefore pointed out, that when this Court
in A.R. Antulay's case (supra) examined the validity of the F
order passed by this Court, whereby the trial pending
before the Special Judge, Bombay under the Criminal Law
(Amendment) Act, 1952, was transferred to the High Court,
a Constitution Bench of this Court declared the above
transfer order as being void and a nullity in law. It was G
submitted, that if the above determination could be
rendered, the controversy in hand needs to be similarly
redressed, so as to do justice to the petitioner. It was
submitted, that the principle of actus curiae neminem
gravabit would apply with much greater force in the present
H
768 SUPREME COURT REPORTS [2014] 12 S.C.R.

A case on account of the fact, that the petitioner has been
deprived of his liberty and has been remanded to jail
without the authority of law. It was submitted, that the
impugned order dated 4.3.2014 was totally unjust, without
any judgment of conviction, without proper charges being
B framed or notice issued, and without a hearing. It was also
the contention of the learned Senior Counsel, that the
principle of audi alteram partem was given a complete go-
by, in the facts and circumstances of this case. It was
accordingly the submission of the learned Senior Counsel
c for the petitioner, that even a judicial order passed in
derogation of the constitutional limitations or in derogation
of principles of natural justice, can always be remedied by
this Court ex debito justitiae. According to learned counsel,
it was imperative for this Court to exercise the above
power without insisting on th.e formalities of the petitioner
D
being required to file a review petition or a curative
petition.

131. In addition to the reliance placed by the learned
Senior Counsel for the petitioner on the judgment rendered by
E this Court in .AR. Anutlay's case (supra), he also placed reliance
on the judgments of this Court in Supreme Court Bar
Association's case (supra), and on M.S. Ahlawat v. State of
Haryana & Anr., (2000) 1 SCC 278, wherein this Court had
recalled its own order, when a litigant had approached it
F complaining of miscarriage of justice (through an earlier order,
passed by this Court). Specially when the earlier order was
without jurisdiction and without following due procedure of law.
And sp.ecially, when the challenged order had resulted in the
incarceration cif the concerned petitioner.
G
132. In response to the contentions advanced at the hands
of the learned Senior Counsel for the petitioner, Mr. Arvind
Datar, learneij Senior Counsel representing the SEBI, invited
our attention to the following observations made in A.R.
Antulay's case (supra):-
H
SUBRATA ROY SAHARA v. UNION OF INDIA 769
[JAGDISH SINGH KHEHAR, J.]
"107. There is still another aspectwhich should be taken A
note of. Finality of the orders is the rule. By our directing
recall of an order the well settled propositions of law would
not be set at naught. Such a situation may not recur in the
ordinary course of judicial functioning and if there be one
certainly the Bench before which it comes would B
appropriately deal with it. No strait-jacket formula can be
laid down for judicial functioning particularly for the apex
Court. The apprehension that the present decision may be
used as a precedent to challenge judicial orders of this
Court is perhaps misplaced because those who are c
familiar with the judicial functioning are aware of the limits
and they would not seek support from this case as a
precedent. We are sure that if precedent value is sought
to be derived out of this dei::ision. the court which is asked
to use this as an instrument would be alive to the peculiar
0
facts and circumstances of the case in which this order is
being made."

(emphasis is ours)

Based on the above, it was submitted by the learned E
counsel, that challenge to an order passed by this Court would
be a rarity, and not a common feature. He emphatically pointed
out, that if the submission advanced at the hands of the learned
counsel for the petitioner was to be accepted, no order passed
by this Court would ever attain finality. And therefore, the F
jurisdiction of this Court would be open to exploitation, any
number of times, if the petitioner/respondent continued to feel,
that injustice had·been done to him.

133. We are of the view, that reliance by the learned Senior
Counsel for the petitioner on Supreme Court Bar Association's G
case (supra) and on M.S. Ahlawat's case (supra) is wholly
misconceived on account of the determination rendered by this
Court in Rupa Ashok Hur'ra's case (supra), wherein in
paragraph 13, a five-Judge Constitution Bench, observed as
u~~ H
770 SUPREME COURT REPORTS [2014] 12 S.C.R.

A "13. It is. however. true that in Supreme Court Bar
Association VS. Union of India. (1998) 4 sec 409, a
Constitution Bench and in M.S. Ahlawat vs. State of
Harvana. (2000) 1 SCC 278. a three-Judge Bench. and
in other cases different Benches. quashed the earlier
B judgments/orders of this Court in an application filed under
Article 32 of the Constitution. But in those cases no one
joined issue with regard to the maintainabilitv of the writ
petition under Article 32 of the Constitution. Therefore.
those cases cannot be read as authority for the proposition
c that a writ of certiorari under Article 32 would lie to
challenge an earlier final judgment of this Court."

{emphasis is ours)

134. Before we advert to the question of jurisdiction, it may
D be relevant to understand the extent and width of jurisdiction
within the framework whereof this Court can pass orders. In this
behalf reference may be once again, made to the nine-Judge
Bench judgment of this Court in Naresh Sridhar Mirajkar's case
{supra), wherein it was held as under:-
E
"60. There is yet another aspect of this matter to which it
is necessary to refer. The High Court is a superior Court
of Record and under Article 215. shall have all powers of
such a Court of Record including the power to punish
contempt of itself. One distinguishing characteristic of such
F
superior Courts is that they are entitled to consider
questions of their jurisdiction raised before them. This
que;,,lion fell to be considered by this -Court in Special
Reference No. 1 of 1964, {1965) 1 S.C.R. 413 at p. 499.
In that case, it was urged before this Court that in granting
G bail to Keshav Singh, the High Court had exceeded its
jurisdiction and as such, the order was a nullity. Rejecting
this argument, this Court observed that in the case of a
superior Court of Record, if is for the Court to consider
· whether any matter falls within its jurisdiction or not. Unlike
H a court of limited jurisdiction, the superior court is entitled
SUBRATA ROY SAHARA v. UNION OF INDIA 771
[JAGDISH SINGH KHEHAR, J.]
to determine for itself questions about its own jurisdiction. A
That is why this Court did not accede to the proposition
that in passing the order for interim bail, the High Court
can be said to have exceeded its jurisdiction with the result
that the order in question was null and void. In support of
this view, this Court cited a passage from ·Halsbury's Laws. B
·of England where it is observed that:-

"prima facie. no matter is deemed to be beyond the
jurisdiction of a superior court unless it is expressly
shown to be so. while nothing is within the C
jurisdiction of an inferior court unless it is expressly
shown on the face of the proceedings that the
particular matter is within the cognizance of the
particular Court." (Halsbury's Laws of England, Vol.
9, p. 349).".
D
If the decision of a superior Court on a question of its
jurisdiction is erroneous. it can. of course. be corrected by
appeal or revision as may be permissible under the law:
but until the adjudication by a superior Court on such a
point is set aside by adopting the appropriate course. it E ·
would not be open to be corrected by the exercise of the
writ jurisdiction of this Court."

(emphasis is ours)

135. Since it is not the case of the petitioner before this F
Court, that some legislative or constitutional provision had
curtailed the jurisdiction of this Court, from passing an order,
of the nature which is impugned through this criminal writ
petition, there can be no doubt that the above order has been
passed by this Court in legitimate exercise of its jurisdiction. G
This will have to be the natural determination arising out of the
law declared in Naresh Sridhar Mirajkar's case (supra), which
is the very judgment, on which learned counsel for the petitioner
has placed reliance.
H
772 SUPREME COURT REPORTS [2014] 12 S.C.R.

.. A 136. Independently of the above purely legal determination,
we have under a separate heading examined the issue,
whether this Court had the jurisdiction to order the arrest and
detention of the petitioner - Mr. Subrata Roy Sahara. We have
independently concluded, that we were possessed of such
B jurisdiction. It is therefore apparent, that the impugned order
dated 4.3.2014, does not suffer from any jurisdictional enor.

137. We are in absolute agreement with the submissions
advanced by Mr. Arvind Datar, learned Senior Counsel for the
C respo'ndent. In view of the factual position depipted in this
judgment {under the heading: "Whether the impugned order
dated 4'.3.2014 was passed, in violation of the rules of natural
justice?"), based on the pleas advanced by the petitioner on
merits, it is apparent, that the rules of natural justice were
followed to the hilt, before the impugned order dated 4.3.2014
D was passed. Accordingly, the principle of actus curiae neminem
gravabit is not available to the petitioner.

138. We have recorded hereinabove, that the instant
petition is not maintainable, because the challenge raised by
E the petitioner herein, on the grounds of a jurisdictional error, or
non compliance of the rules of natural justice have been founq
to be not made out in this case. That was the only basis ·of
interference in Naresh Sridhar Mirajkar's case {supra). We are
however persuaded, to record another reason for not accepting
F the maintainability of the present writ petition, on the basis of
Naresh Sridhar Mirajkar's case {supra). In this behalf it is
relevant to notice, from the factual background of Naresh
Sridhar Mirajkar's case {supra) which has been traced
hereinabove, that A.R. Antulay, had earlier approached this
G Court, by filing a writ petition under Article 32 of the Constitution
of India Gust in the same manner, as the petitioner herein has . ·
approached.this Court). A two-Judge Division Bench of this
Court dismissed the petition by observing inter alia, that a writ
petition challenging the validity of an order and judgment passed
H by the Supreme Court as nullity or otherwise incorrect; could
SUBRATA ROY SAHARA v. UNION OF INDIA 773
[JAGDISH SINGH KHEHAR, J.]
not be entertained. The said writ petition was accordingly A
dismissed (Abdul Rehman Antulay v. Union of India, Writ
Petition (Criminal) no. 708 of 1984, decided on 17.4.1984;
reported as Appendix, (1988) 2 SCC 764). In the above view
of the matter also, even on the basis of the very judgment relied
upon by the learned counsel, we have no other alternative but B
to conclude, that the instant writ petition is not maintainable, to
assail the impugned order passed by this Court on 4.3.2014.

139. We shall· now endeavour to deal with the submissions
advanced at the hands of Mr. C.A. Sundaram, learned Senior C
Counsel appearing for the petitioner, whose express
submission was, that the instant criminal writ petition, filed by
the petitioner was maintainable under Article 32 of the
Constitution of India. The sum ahd substance of the submission
advc;inced by the learned counsel, has already been noticed
above, and is accordingly not being repeated herein again, for D
reasons of brevity. Before dealing with the issue in hand, it
would also be relevant to mention, that while the long drawn
. hearing in the instant matter was coming to an end, Mr. Ram
Jethmalani, learned Senior Counsel, had a slight change of
heart. His submission on second thoughts was, that the E
contention advanced at the hands of Mr. C.A. Sundaram,
learned Senior 9ounsel, to the effect that the instant petition
was maintainable under Article 32 of the Constitution of India,
had merit. In the succeeding paragraphs, we shall deal with the
. submissions advanced by Mr. C.A. Sundaram, to demonstrate F
that the present writ petition was maintainable at the hands of
the petitioner, to assail the order passed by us, on 4.3.. 2014.

140. The instant issue bejng a pure question of law, was
canvassed at the hands of the learned counsel for the rival G
parties, by placing reliance on jµdgments rendered by this Court.
In our considered view, therefore, it would be in the fitness of
matters to cite the judgments relied upon by the learned counsel
for the parties, for the adjudication of the instant issue.
H
774 SUPREME COURT REPORTS [2014] 12 S.C.R.

A 141. We have chosen to take into consideration various
judgments brought to cur notice chronologically.

{i) In this behalf reference may first and foremost be made
to the judgment rendered by a nine-Judge Bench of this Court
B in Naresh Shridhar Mirajkar, AIR 1967 SC 1, wherefrom our
attention was invited to the following conclusions drawn therein:-

"52. In this connection, it is necessarv to refer to another
aspect of .the matter. and that has relation to the nature and
extent of this Court's jurisdiction to issue writs of certiorari
C under Article 32(2). Mr. Setalvad has conceded that if a
Court of competent jurisdiction makes an order in a
proceeding before it, and the order is inter-parties. its
validity cannot be challenged by invoking the jurisdiction
of this Court under Article 32. though the said order may
D affect the aggrieved party's fundamental rights. His whole
argument before us has been that the impugned order
affects the fundamental rights of a stranger to the
proceedings before the Court: and that, he contends.
justifies the petitioners in moving this Court under Article
E· 32. It is necessarv to examine the validitv of this argument.
xxx xxx xxx xxx xxx.
59. We have referred to these decisions to illustrate how
the jurisdiction to issue writs if certiorari has been
F exercised either by the High Courts under Article 226 or .
by this Court under Article 32. Bearing these principles in
mind, let us enquire whether the order impugned in the
present proceedings can be said to be amenable to the
jurisdiction of this Court under Article 32. We have already
.G seen that the impugned order was passed by the learned
Judge after hearing Jhe· parties and it was passed
presumably because he was satisfied that the ends of
justice required that Mr. Goda should be given protection
by prohibiting the publication of his evidence in the
H newspapers during the course of the trial. This matter was
SUBRATA ROY SAHARA v. UNION OF INDIA 775
[JAGDISH SINGH KHEHAR, J.]
directly related to the trial of the suit; and in exercise of his A
inherent power, the learned Judge made the order in the
interests of justice. The order in one sense is inter-parties,
because it was passed after hearing arguments on both
the sides. In another sense, it is not inter-parties inasmuch
as it prohibits strangers like the petitioners from publishing B
Mr. Goda's evidence in the newspapers. In fact, an order
of this kind would always be passed after hearing parties
before the Court and would in every case affect the right
of strangers like the petitioners who, as Journalists, are
interested in publishing court proceedings in newspapers. c
Can it be said that there is such a difference between
. normal orders passed inter-parties in judicial proceedings,
and the present order that it should be open to the
strangers are who affected.by the order to move this Court
·under Article 32? The order. no doubt, binds the strangers:
D
but. nevertheless, it is a judicial order and a person
aggrieved by it. though a stranger, can move this Court by
appeal under Article 136 of the Constitution. Principles of
Res judicata have been applied by this Court in dealing
with petitions filed before this Court under Article 32 in
Daryao v. The State of U.P. and Others. AIR 1961 SC E
1457. We apprehend thaf somewhat similar
considerations would apply to the present proceedings. If
a judicial order like the one with which we are concerned
in the present proceedings made by the High Court binds
strangers, the strangers may challenge the order by taking F
appropriate proceedings in appeal under Article 136. It
would. however. not be open to them to invoke the
jurisdiction of this Court under Article 32 and contend that
a writ of certiorari should be issued in respect of it. The
impugned order is passed in exercise of the inherent G
jurisdiction of the Court and its validity is not open to be
challenged by writ proceedings."

(emphasis'is ours)
H
776 SUPREME COURT REPQRTS [2014] 12 S.C.R.

.A Even though the challenge before us is raised on account of
the alleged violation of Article 21 of the Constitution of India,
yet the issue that needs to be determined is, whether a writ
petition would be maintainable, as against an order passed by
this Court for an alleged violation of a fundamental right. While
s examining the above proposition in respect of an alleged
violation under Article 19 of the Constitution of India, this Court
in the conclusions drawn in lhe above extracted paragraphs,
clearly held, that a writ petition would not be maintainable
against an order passed by this very Court, even though it
c alleged violation of a fundamental right. ·

(ii) Reference was next made to the decision rendered by
a three-Judge Division Bench of this Court in Col. Dr. B.
Ramachandra Rao v. The State of Orissa & Ors., (1972) 3 SCC
256. Even though during the course of hearing, learned counsel
D for the rival parties read before us paragraphs 5 and 7 of the
present judgment, we are of the view that for the issue in hand,
the ·purpose would be served by extracting herein paragraph
6, which is being reproduced hereunder:.:

E "6. As admitted by both sides the petitioner was sentenced
to imprisonment on conviction by the Third Additional
Sessions Judge, Secunderabad in October, 1965.
Unfortunately, neither side has been able to inform us as
to whether that sentence has expired or is still running. The
jail authorities at Bhubaneshwar, we have little doubt, must
F
have information whether or not the petitioner, when
brought there, was undergoing a sentence of imprisonment
and how much sentence remain to be undergone, and the
petitioner also, in our opinion, must be presumed to be
aware of the sentence imposed on him. We need only add
G that in case the petitioner is undergoing the sentence of
imprisonment imposed on him by competent Court then
too writ of habeas corpus cannot be granted. This position
is well settled."

H (emphasis is ours)
SUBRATA ROY SAHARA v. UNION OF INDIA 777
[JAGDISH SINGH KHEHAR, J.]
A perusal of the above judgment leaves no room for any A
doubt, that this Court clearly declared, that in case a Court of
competent jurisdiction, had passed an order of imprisonment,
the order could not be assailed by praying for a writ in the nature
of habeas corpus. A writ of habeas corpus can only be sought
from this Court, in exercise of its jurisdiction under Article 32 B
of the Constitution of India. In the above view of the matter it is
apparent from the conclu~ions drawn by this Court, that a writ
petition was held to be not maintainable, against an order of
imprisonment passed by a Court of competent jurisdiction.

(iii) A writ petition was filed in the Court, to assail the
c
validity of a conviction order, whereby the person concerned
had been sentenced to life imprisonment. This Court, in Jharia
. S/o Maniya v. State of Rajasthan & Anr., (1983) 4 SCC 7, held
that the writ petition was not maintainable. Incidentally, ii would
be pertinent to mention, that the above challenge was raised D
(as in the instant case), by asserting that the impugned judgment
violated the fundamental right of the concerned detenue, under
Article 21 of the Constitution of India (as in the instant case).
Additionally, a challenge was also raised under Articles 14 and
19 of the Constitution of India. This Court dismissed the writ E
petition, with the following observations:-

"2. It appears that the petitioner along with two others was
arraigned before the Sessions Judge of Alwar .in Sessions
Trial No. 110 of 1976 for having committed an alleged F
offence.punishable under Section 302 of the Indian Penal
Code, alternatively, under Section 302 read with
Section 34 of the Code. By his finding and sentence dated
April 21, 1977 the learned Sessions Judge convicted the
petitioner and his two associates for having committed the G
murder of the deceased Jharia in furtherance of their
·Common intention under Section 302 read with
Section 34 and sentenced each of them to undergo·
irT\prisonment for life, while recording their acquittal under
Section 302. On appeal, a Division Bench of the Rajasthan
H
778 SUPREME COURT REPORTS (2014] 12 S.C.R.

A High Court (Jaipur Bench) in Criminal Appeal No. 219 of
1977 by judgment dated July 3, 1980 maint~ined the
conviction of the petitioner under Section 302 read with
Section 34 but acquitted his two associates giving them
the benefit of doubt. Dissatisfied with the judgment of the
B High Court, the petitioner applied to this Court for grant of
special leave under Article 136 of the Constitution. The
special leave petition was dismissed by this Court on
February, 23, 1981. An application for review was also
dismissed on November 19, 1981. Thereafter. the
c petitioner filed this petition under Article 32 assailing his
conviction and sentence. The petitioner seeks the issuance
of a writ of mandamus directing the State of Rajasthan to
forbear from giving effect to the judgment and sentence
passed by the learned Sessions Judge as also the
D judgment of the High Court as well as the order passed
by this Court dismissing the special leave petition. He
further seeks -a declaration that his conviction under
Section 302 read with Section 34 by the High Court was
illegal and therefore his detention in jail was without the
authority of law and in violation of Article 21 read with
E
Articles 14 and 19 of the Constitution.

3. The.petitioner contends that in view of the decisions of
thi~ Court in Krishna Govind Patil v. State of Maharashtra,
AIR 1963 SC 1413, Maina Singh v. Stale! of Rajasthan, AIR
F 1976 SC 1084 and Piara Sinnh v. State of Punjab, (1980)
2 SCC 401 , his convjction under Section 30iread with
Section 34 was illegal as he had been charged with two
other named persons who have bee'n acquitted by the High
Court and therefore he cannot be convicted of an offence·
G punishable under Section 302 read with Section 34. Upon
this basis. the contention is that the petitioner has been
deprived of his life and liberty without the authority of law
in violation of Article 21 read with Articles 14 and 19 of the
Constitution. It is represented to us that the contention
H based upon the decisions of this Court had been
SUBRATA ROY SAHARA v. UNION OF INDIA 779
[JAGDISH SINGH KHEHAR, J.]
advanced during the course of the hearing of the special A
leave petition, put both the special leave petition and the
application for review have been dismissed and therefore
the petitioner has no other remedy except to approach this
Court for appropriate writ, ·direction. or order under
Article 32 of the Constitution. B

4. We fail to appreciate the propriety of asking for a
declaration in there proceedings under Article 32 that
conviction of the petitioner by the High Court fcir an offence
punishable under Seciion 302 read with Section 34 of the
India Penal Code is illegal. particularly when this Court has C
declined to grant special leave under Article 136. Nor can
the petitioner be heard to say that his detention in jail
amounts to deprivation of the fundamental right to life and
liberty without following the procedure established by law
in violation of Article 21 read with Articles 14 and 19. D
When a special leave petition is assigned to the learned
Judges sitting in a Bench. they constitute the Supreme
Court and there is a finality to their judgment which cannot
be upset in these proceedings under Article 32. Obviously, ·
the Supreme Court cannot issue a writ. ,direction or order E
to itself in respect of any judicial proceedings and the
learned Judges constituting the Bench are not amenable
to the writ jurisdiction of this Court."

(emphasis is ours) F
A perusal of the above judgment, leaves no room for any
doubt, that in the above judgment, rendered by a three-Judge
Division Bench, this Court arrived at the conclusion, that a writ
petition would not be maintainable to assail a judicial order.
G
(iv) Reference may now be made to the decision rendered
by this Court in Ranjit Singh v. Union Territory of Chandigarh &
Anr., (1991) 4 sec 304. It would be relevant to mention, that
the instant judgment was relied upon by Mr. Mukul Gupta,
learned Senior Counsel, who represented the Union of India. H
780 SUPREME COURT REPORTS (2014] 12 S.C.R.

· A The above judgment also dealt with the issue whether a writ
petition was maintainable under Article 32 of the Constitution
of India, to assail the directions contained in a judgment
rendered by this Court. From the above judgment, the
observations recorded in paragraphs 5 and 11 are considered
B essential for the purpose in hand, and are accordingly being
extracted hereunder:-

"5. We may straightaway mention thai the question of grant
of relief u"nder Article 32 of the Constitution does not arise
on the above facts. The petitioner's incarceration is the
c result of a valid judicial order and therefore. there can be
no valid claim to the infringement of any fundamental right
which alone can be the foundation for a writ under
Article 32 of the Constitution. The only question,. it appears, -
therefore, is about the correct construction of the direction
D given by this Court in its judgment dated September 30,
1983 in Criminal Appeal No. 418 of 1982 in the light of
the true meaning of Section 427(2) Cr.P.C.

)()()( )()()( xxx xxx xxx
E
11. We have ·alreadv stated that this petition for the
issuance of a writ under Article 32 of the Constitution is
untenable. We have, therefore, treated it as a petition for
clarification of the judgment dated September 30, 1983 in
Criminal Appeal No. 418of1982. Accordingly, the petition
F is disposed of with this clarification." ·

(emphasis is ours)

Yet again, in the above judgment, this Court arrived at the
G conclusion, that a .writ petition was not maintainable under
Article 32 of the Constitution of India, to assail an order passed
. '
by this Court.

(v) Reference. was also made to the recent decision
rendered by this Court in Manubhai Ratilal Patel v. State of
H
SUBRATA ROY SAHARA v. UNION OF INDIA 781
[JAGDISH SINGH KHEHAR, J.]
Gujarat, (2013} 1 SCC 314. In the above judgment, this Court A
referred to the earlier judgments rendered by this Court, and
approved the issue, which is subject matter of consideration
at our hands. The observations which are relevant, are being
extracted hereunder:-
B
"14. In Kanu Sanyal v. District Magistrate, Darjeeling and
Ors., (1973) 2 SCC 674, it was laid down that the writ of
habeas corpus deals with the machinel")' of justice, not the
substantive law. The object of the writ is to secure release
of a person who is illegally restrained of his liberty.
c
15. Speaking about the importance of the writ of habeas
corpus, a two-Judge Bench, in Ummu Sabeena v. State
of Kerala and Ors. (2011) 10 SCC 781, has observed as
follows:
D
"15 .... the writ of habeas corpus is the oldest writ
evolved by the common law of England to protect
the individual liberty against its invasion in the hands
of the executive or may be also at the instance of
private persons. This principle of habeas corpus E
has been incorporated in our constitutional law and
we are of the opinion that in a democratic republic
like India where Judges function under a written
Constitution and which has a chapter on
fundamen.tal rights, to protect individual liberty the F
Judges owe a duty to safeguard the liberty not only
of the citizens but also of all persons within the
territoty of India. The most effective way of doing
the same is by way of exercise of power by the
Couri by. issuing a writ of habeas corpus."
G
In the said case, a reference was made to Halsbury's
Laws of England, 4th Edn. Vol. 11, para 1454 to highlight
that a writ of habeas corpus is a writ of highest
constitutional importance being a remedy available to .the
lowliest citizen against the most powerful authority. H
782 SUPREME COURT REPORTS (2014] 12 S.C.R.

A 16. Having stated about the significance of the writ of
habeas corpus as a weapon for protection of individual
liberty through judicial .Process, it is condign to refer to
certain authorities to appreciate how this Court has
dwelled upon and expressed its. views pertaining to the
B legality of the order of detention, especially that ensuing
from the order of the court when an accused is produced
in custody befor~ a Magistrate after arrest. It is also worthy
to note that the opinion of this Court relating to the relevant
stage of delineation for the purpose of adjudicating the
c legality of the order of detention is of immense importance
for the present case.

17. In Col. Dr. B. Ramachandra Rao v. The State of Orissa,
{1972) 3 sec 256, it was opined that a writ of habeas
corpus is not granted where a person is committed to jail
D
custody by a competent court by an order which prima
facie does not appear to be without jurisdiction or wholly
illegal."

(emphasis is ours)
E
Yet again, therefore, this Court affirmed the conclusion, that
a writ petition cannot be filed to raise a challenge against a
validly passed judicial order.

In view of the clear expression of law recorded in all the
F above judgments, without any divergence of view whatsoever,
we have no other alternative but to conclude, that it was not
open for the petitioner to file the instant writ petition, to assail
the order passed by this Court, in exercise of its jurisdiction
under Articles 129 and 142 of the Constitution.of India. As a
· G matter of abundant caution, it is considered necessary to
record, that even though reference was made to M.S. Ahlawat's
case (supra) and Supreme Court Bar Association's case
(supra), wherein this Court had entertained a challenge to earlier
orders passed by it, under Article 32 of the Constitution of India,
H yet, the above two judgments, cannot be treated to have any
SUBRATA ROY SAHARA v. UNION OF INDIA 783
[JAGDISH SINGH KHEHAR, J.]
bearing on the determination of the issue in hand, because in A
the aforesaid two cases, the maintainability of the petitions was
not contested. Our instant conclusion, has also been recorded
by this Court in, Rupa Ashok Hurra's case (supra), the relevant
observations wherefrom, have already been extracted
hereinabove. B

142. Last of all, we shall endavour to deal with the
submission advanced by Dr. Rajeev Dhawan, learned Senior
Counsel, to the effect that the instant petition was maintainable
in exercise of the jurisdiction vested in this Court, under Articles C
129 and 142 of the Constitution of India. The above provisions
are being extracted hereunder;-

"129. Supreme Court to be a court of record - The
Supreme Court shall be a court of record and shall have
all the powers of such a court including the power to punish D
for contempt of itself.

142. Enforcement of decrees and orders of the Supreme
Court and orders as to discovery, etc. - (1) The Supreme
Court in the exercise of its jurisdiction may pass such
E
decree or make such order as is necessary for doing
complete justice in ahy cause or matter pending before it,
and any decree so passed or order so made shall be
enforceable throughout the territory of India in such manner
as may be prescribed by or under any law made by
Parliament and, until provision in that behalf is so made, F
in such manner as the President may by order prescribe

filSubject to·the provisions of any law made in this behalf
by Parliament, the Supreme Court shall, as respects the
whole of the territory of India, have all and every power to G
make any order for the purpose of securing the attendance
of any person, the discovery or production of any
documents, or the investigation or punishment of any
contempt of itself."
H
784 SUPREME COURT REPORTS [2014] 12 S.C.R.

A Relying on the above provisions, learned Senior Counsel
asserted, that "maintainability exists, because we can all make
mistakes, and the mistakes that we make, need to be
corrected". The submission of the learned counsel in this behalf
was, that in the above view of the matter, jurisdiction could truly
B be traced, to Articles 129 and 142 for correcting mistakes. It
was the submission of the learned counsel, that this Court being
a Court of record, had unlimited jurisdiction to correct all
mistakes committed by it. Referring to Article 142 of the
Constitution of India it was submitted, that it was the pious
C obligation of Court to do complete justice, and accordingly,
Whenever injustice was traceable, it was imperative for this
Court to rectify the same. On the subject under reference,
learned Senior Counsel relied on the decision in Rupa Ashok
Hurra's case (supra) and invited our pointed attention to
following observations recorded therein:-
0
"23. These contentions pose the question. whether an
order passed by this Court can be corrected under its
inherent powers after dismissal of the review petition on
the ground that it was passed either without jurisdiction or
E in violation of the principles of natural justice or due to
unfair procedure giving scope for bias which resulted in
abuse of the process of the' Court or miscarriage of justice
. to an aggrieved person.

F xxx xxx xxx
49. The upshot of the discussion in our view is that this
Court, to prevent abuse of its process and to cure a gross
miscarriage of justice, may re-consider its judgments in
exercise of its inherent power.
G
50. The next step is to specify the requirements to entertain
such a curative petition under the inherent power of this
Court so that floodgates are not opened for filing a second
review petition as a matter of course in the guise of a
H curative petition under inherent power. It is common
SUBRATA ROY SAHARA v. UNION OF INDIA 785
[JAGDISH SINGH KHEHAR, J.]
ground that except when verv strong reasons exist. the A
Court should not entertain an application seeking
reconsideration of an order of this Court which has
become final on dismissal of a review petition. It is neither
advisable nor possible to enumerate all the grounds on
which such a petition may be entertained." B

(emphasis is ours)

143. It is not possible for us to accept the contention
advanced at the hands of the learned Senior Counsel. By
placing reliance on the decision rendered by this Court in Rupa C
Ashok Hurra's case (supra), learned counsel must be deemed
to have impliedly conceded the issue, against himself. In Rupa
Ashok Hurra's case (supra), this Court examined the remedies
available to an individual. In the above judgment, this Court
examined the ambit and scope of Article 137 of the Constitution D
of India, whereunder, a review petition could be filed for the
correction of an error apparent on the face of the record. In. the
judgment relied upon, this Court also expressed the view, that
a curative petition could be filed for corrections of such like
errors, after a review petition had been dismissed. It is relevant E
to mention, that in furtherance of the directions issued by this
Court in Rupa Ashok Hurra's case (supra), this Court has
framed rules, for entertaining curative petitions. Such curative
petitions, when entertained, are placed before a five-Judge
Bench including the senior most three Judges of this Court. F
Placing reliance on Rupa Ashok Hurra's case (supra)
evidences, that the petitioner was aw.are of the jurisdiction of
this Court under Article 137 of the Constitution of India for filing
a review petition, as also, the permissibility of filing a curative
petition, after the concerned party had not succeeded, in the G
review petition. Unfortunately, the petitioner has not chosen
either of the above jurisdictions. The instant petition has been
styled as a criminal writ petition. The instant petition is not
maintainable as no fresh petition is shown to be maintainable,
under the provisions (Articles 129 and 142 of the Constitution
H
786 SUPREME COURT REPORTS [2014] 12 S.C.R.

A of India), relied upon by the learned Senior Counsel. Moreover,
our deliberations on the merits of the controversy further reveals,
that there is neither any jurisdictional error, nor any error in law
has been shown to be made out, from the impugned order
dated 4.3.2014. ·
B
144. For all the reasons recorded hereinabove we are of
the view, that the instant petition is not maintainable and the
same is, therefore, liable to be dismissed on the ground of
maintainability.
c XI. Conclusions

145. In view of our findings recorded hereinabove, our
conclusions are summarized hereunder:-

I. We find no merit in the contention advanced on behalf
D of the petitioner, that we should recuse ourselves from the
hearing of this case. Calculated psychological offensives and
mind games adopted to seek recusal of Judges, need to be
strongly repuls.ed. We deprecate such tactics and commend a
similar approach to other Courts, when they experience such
E behaviour. (For details, refer to paragraph:nos. 1 to 14).

II. Disobedience of orders of a Court strikes at the very root
of the rule of law, on which the judicial system rests. Judicial
orders are bound to be obeyed at all costs. Howsoever grave
F the effect may be, is no answer for non-compliance of a judicial
order. Judicial orders cannot be permitted to be circumvented.
In exercise of contempt jurisdiction, Courts have the power to
enforce compliance of judicial orders, and also, the power to
punish for contempt. (For details, refer to paragraph nos. 15
G to 19).

Ill. The facts of this case reveal, that the two companies of
which the petitioner is a promoter, flouted orders passed by the
SEBI (FTM), SAT, the High Court and of this Court, with
impunity. Facts and information solicited were never disclosed ..
H
SUBRATA ROY SAHARA v. UNION ·OF INDIA 787
[JAGDISH SINGH KHEHAR, 'J.]
The position adopted by the two companies was always A
projected on the basis of unverifiable material. This Court
recorded in its order dated 31.8.2012, that the factual
assertions made on behalf of the two companies seemed to
be totally unrealistic and could well be fictitious, concocted and
made up, and also remarked, that the affairs of the two B
companies seemed to be doubtful, dubious and questionable.
The above position has remained unaltered, inasmuch as, no
authentic and verifiable material sought has ever been furnished
by the two companies. The two companies remained adamant
while frittering away repeated opportunities granted by this c
Court to comply with the orders da~ed 31.8.2012 and
5.12.2012. The companies adopted a demeanour of defiance
constituting a rebellious behaviour, not amenable to the rule of
law. (For details, refer to paragraph nos. 20 to 39).

IV. Efforts made to cajole the two companies and the D
petitioner were always stonewalled and brushed off. All
intermediary means to secure compliance of this Court's orders
dated 31.8.2012 and 5.12.2012, were evaded and skirted.
Even proposals to secure the payments (as against, the
payment itself) to be made to the investors, in terms of this E
Court's orders, were systematically frustrated. Similar
proposals made unilaterally by learned Senior Counsel
representing the two companies and the petitioner himself,
turned out to be ploys to sidetrack and derail the process of
. law. Such unilateral proposals, were unilaterally withdrawn. F
Since all the efforts to cajoie the two companies and the
petitioner were methodically circumvented, we started adopting
sequentially harsher means to persuade compliance of this
Court's orders dated 31.8.2012 and 5.12.2012, leading finally
to the passing of the impugned order dated 4.3.2014. (For G
details, refer to paragraph nos. 40 to 55).

V. The Code of Civil Procedure, 1908, which regulates civil
proceedings in India, expressly contemplates arrest and
detention for the enforcement of a money decree. And the
H
· 788 SUPREME COURT REPORTS [2014) 12 S.C.R.

A Code of Criminal Procedure, 1973, which regulates criminal
proceedings in India, envisages arrest and detention as a
mean for enforcing financial liability. The submission made by
the learned Senior Counsel for the petitioner to the effect, that
execution of a money decree or enforcement of a financial
B liability by way of arrest and detention was a procedure
unknown to law, is therefore, wholly misconceived. (For details,
refer to paragraph nos. 56 to 61 ).

VI. The submission made by the learned counsel for the
C petitioner, that this Court was obliged to comply with the
procedure contemplated under Section 51, and rules 37 and
40 of Order XXI, of the Code of Civil Procedure, 1908, before
ordering the arrest and detention of the petitioner (and the other
contemnors) is devoid of any merit, because Section 51 of the
Code of Civil Procedure, 1908 and the other allied provisions
D referred to above, are not applicable to actions emanating out
of the SEBI Act. So also, rule 6 of Order XIII of the Supreme
Court Rules,-1966, has no applicability, with reference to the·
SEBI Act. Be that as it may, this Court before passing the
impugned order dated 4.3.2014 had immaculately followed the
E procedure contemplated under the provisions of the Code of
Civil Procedure, 1908, as were relied upon by the learned
counsel for the petitioner, before ordering the petitioner's (and
the other contemnors') arrest and detention. The submission
of the learned counsel for the petitioner, so as to avoid his ·
F arrest and detention, based on the judgment rendered by this
Court in Jolly George Varghese & Anr. v. Bank of .Cochin,
(1980) 2 sec 360, being inapplicable to the facts and
circumstances of this case, was liable to be rejected, and has
accordingly been rejected. (For details, refer to paragraph nos.
G 62 to 77).
VII. In response to a prayer made by the SEBI (in
Interlocutory Application nos. 68 and 69 of 2013 in Civil Appeal
no. 9813 of 2011 ), inter alia, seeking the arrest and detention
of the petitioner (and two other contemnors, namely, Mr. Ravi
H
SUBRATA ROY SAHARA v. UNION OF INDIA 789
(JAGDISH SINGH KHEHAR, J.]
Shankar Dubey and Mr. Ashok Roy Choudhary), the petitioner A
filed a personal reply by way of an affidavit. The petitioner in
his written reply raised all possible legal and factual defences.
Different orders were passed from time to time in furtherance
of the prayers made in the aforementioned interlocutory
applications, including the order preventing the petitioner (and B
the other contemnors) from leaving the country, as also, the
order restraining the two companies from· parting with any
movable or immovable property. A number of opportunities of
hearing were given to the learned counsel representing the two
companies and the contemnors. Finding the attitude of the c
contemnors defiant and non-cooperative, their personal
presence was ordered. The petitioner, who was directed to be
present on 26.2.2014, did not enter personal appearance. His
personal presence was enforced through non-bailable warrants
on 4.3.2014.- During the course of their personal presence in D
Court, the petitioner and the other contemnors were afforded
an opportunity of oral hearing. The petitioner repeatedly·
addressed this Court on 4.3.2014. Only thereafter, the impugned
order dated 4.3.2014 was passed. In view of the above facts
it is not possible for us to accept, that the impugned order was
passed without following the rules of natural justice or without E
affording the petitioner an opportunity of hearing. (For details,
refer to paragraph nos. 78 to 96).

VIII. The law laid down by this Court in Jaswant Singh v.
Virender Singh & Ors., 1995 Supp. (1) SCC 384, has been F
found to be fully applicable to the facts of this case, particularly
the mannerism and demeanour exhibited by the petitioner and
some of the learned counsel. Our recusal from the case sought
on the ground cif bias, has been found to be devoid of any merit.
Each and every insinuation levelled by the petitioner and his G
learned Senior Counsel, during the course of hearing, has been
considered and rejected on merits. (For details, refer to
paragraph nos. 97 to 112).

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790 SUPREME COURT REPORTS (2014] 12 S.C.R.

A IX. The defence raised by the petitioner, that the two
companies had already substantially redeemed the OFCD's,
has been examined under two different perspectives. Firstly,
the above defence is unavailable to the two companies in law,
after the same was rejected on 5.12.2012 by a three-Judge
B Division Bench (in Civil Appeal no. 8643 of 2012 and Writ
Petition (Civil) no. 527 of 2012). Secondly, the said defence
has been examined from various factual perspectives and has
been found to be untenable. Sole reliance on general ledger
entries without any other authentication, has been held to be
c insufficient proof of the refunds claimed to have been made by
the two companies to the investors, specially because, such
cash redemptions have not been affirmed in the certificate
issued by the firm of Chartered Accountants, which had audited
the accounts of the two companies. (For details, refer to
paragraph nos. 113 to 122).
0
X. The submission advanced by Mr. Ram Jethmalani,
learned Senior Counsel asserting the maintainability of the
instant petition under the maxim of ex debito justitiae, expressly
recognized by this Court in "A.R. Antu lay v. R.S. Nayak, (1988)
E 2 sec 602, is held to be devoid of any merit, consequent upon
a detailed analysis of the judgment relied upon. The contention
advanced by Mr. C.A. Sundaram, learned Senior Counsel for
the petitioner, projecting the maintainability of the instant petition
under Article 32. read with Article 21 of the Constitution of India,
F has been found to be unacceptable in law on the basis of a
series of judgments rendered by this Court. The submission
advanced by Dr. Rajeev Dhawan, learned Senior Counsel
representing the petitioner, supporting the maintainability of the
instant petition by placing collective reliance on Articles 129
G and 142 of the Constitution of India, has also been found to be
ill-founded. (For details, refer to paragraph nos. 123 to 144).

For the reasons recorded hereinabove, we find no merit
in the present petition, and the same is accordingly dismissed.

H
SUBRATA ROY SAHARA v. UNION OF INDIA 791
[JAGDISH SINGH KHEHAR, J.]
XII. Post Script A

146. Even though our instant observations are being
recorded as a post script, after we have concluded examining
the merits of the controversy arising out of the criminal writ
petition filed by the petitioner - Mr. Subrata Roy Sahara, the
8
instant part of our judgment should be treated as a part and
parcel of our decision, because it emerges out of years of our
experience with the justice delivery system, and is prompted
on account of the abuse of the judicial process, exposed while
dealing with some Sahara Group related cases. The
seriousness of the conclusions recorded herein, we hope, shall C
not be overlooked merely on account of the heading given to
this part.

147. The number of similar litigants, as the parties in this
group of cases, is on the increase. They derive their strength D
from abuse of the legal process. Counsel are available, if the
litigant is willing to pay their fee. Their percentage is slightly
higher at the lower levels of the judicial hierarchy, and almost
non-existent at the level of the Supreme Court. One wonders,
what is it, that a Judge should be made of, to deal with such E
litigants, who have nothing to !ose. What is the level of merit,
grit and composure required, to stand up to the pressures of
today's litigants? What is it, that is needed to bear the affront,
scorn and ridicule hurled at officers presiding over Courts?
Surely one would need superhumans to handle the emerging F
pressures on the judicial system. The resultant duress is
grueling. One would hope for support for officeTS presiding over
Courts, from the legal fraternity, as also, from the superior
judiciary upto the highest level. Then and only then, will it be
possible to maintain equilibrium, essential to deal with G
complicated disputations, which arise for determination all the
time, irrespective of the level and the stature, of the Court
concerned. And also, to deal with such litigants.

148. We have no doubt, that the two companies and the
H
792 SUPREME COURT REPORTS [2014] 12 S.C.R.

A present petitioner before this Court - Mr. Subrata Roy Sahara,
are such litigants. They never subjected themselves to the
authority and jurisdiction of the SEBI. They have continued with
the same mannerism at all levels, right upto this Court. They
have always adopted an accusing stance, before all the
B adjudicatory authorities. Even against us. Exhaustive details in
this behalf have been expressed by us, in the order dated
31.8.2012. The pleas raised have been found to be patently
false, on the face of the record.

149. During the course of passing this judgment, we
C required the Registry of this Court to place before us a
compilation of the orders passed on different dates of hearing, ·
ever since the filing of the appeals, which culminated in passing
of the order dated 31.8.2012. We were astounded to learn, that
the controversy arising out of Civil Appeal nos. 9813 and 9833
D of 2011 was listed for hearing on the following 81 dates:-

"28.11.2011, 9.1.2012, 20.1.2012, 10.2.2012, 2.3.2012,
20.3.2012, 23.3.2012, 27.3.2012, 28.3.2012, 29.3.2012,
3.4.2012, 10.4.2012, 11.4.2012, 12.4.2012, 17.4.2012,
E 18.4.2012, 19.4.2012, 20.4.2012, 24.4.2012, 25.4.2012,
26.4.2012, 1.5.2012, 2.5.2012, 3.5.2012, 4.5.2012,
30.5.2012, 31.5.2012, 1.6.2012, 5.6.2012, 6.6.2012,
7.6.2012, 12.6.2012, 13.6.2012, 14.6.2012, 31.8.2012,
. 11.9.2012, 28.9.2012, .19.10.2012, 19.11.2012, 8.1.2013,
F 6.2.2013, 8.2.2013, 19.2.2013, 25.2.2013, 4.4.2013,
22.4.2013, 2.5.2013, 8.5.2013, 17.7.2013, 24:7.2013,
30.7.2013, 6.8.2013, 13.8.2013, 26.8.2013, 2.9.2013,
16.9.2013, 4.10.2013, 28.10.2013, 31.10.2013,
1.11.2013, 20.11.2013,. 21.11.2013, 11.12.2013,
17.12.2013, 2.1.2014, 9.1.2014, 28.1.2014, 11.2.2014,
G
20.2.2014, 26.2.2014, 4.3.2014, 7.3.2014, 12.3.2014,
13.3.2014, 26.3.2014, 27.3.2014, 3.4.2014, 9.4.2014,
16.4.2014, 17.4.2014 and 21.4.2014"
A lot of these hearings consumed this Court's full working
H
SUBRATA ROY SAHARA v. UNION OF INDIA 793
[JAGDISH SINGH KHEHAR, J.]
day. Hearing of the main case, consumed one full part, of the A
entire summer vacation (of the Supreme Court) of the year
2012. For the various orders passed by us, including the order
dated 31.8.2012 (running into 269 printed pages) and .the
present order (running into 205 printed pages), substantial
Judge hours were consumed. In this country, judicial orders are B ·
prepared, beyond Court hours, or on non-working days. It is
apparent, that not a hundred, but hundreds of Judge hours,
came to be spent in the instant single Sahara Group litigation,
just at the hands of the Supreme Court. This abuse of the
judicial process, needs to be remedied. We are, therefore of c
the considered view, that the legislature needs to give a
thought, to a very serious malady, which has made strong
inroads into the Indian judicial system.

150. The Indian judicial system is grossly afflicted, with
frivolous litigation. Ways and means need to be evolved, to D
deter litigants from their compulsive obsession, towards
senseless and ill-considered claims. One needs to keep in
mind, that in the process of litigation, there is an innocent
sufferer on the other side, of every irresponsible and senseless
claim. He suffers long drawn anxious periods of nervousness E
and restlessness, whilst the litigation is pending, without any
fault on his part. He pays for the litigation, from out of his savings
(or out of his borrowings), worrying that the other side may trick
him into defeat, for no fault of his. He spends invaluable time
briefing counsel and preparing them for his claim. Time which F
he should have spent at work, or with his family, is lost, for no
fault of his. Should a litigant not be compensated for, what he
has lost, for no fault? The suggestion to the legislature is, that
a litigant who has succeeded, must be compensated by the .
one, who has lost. The suggestion to the legislature is to G
formulate a mechanism, that anyone who initiates and continues
a litigation senselessly, pays for the same. It is suggested that
the legislature should consider the introduction of a "Code of
Compulsory .Costs".
H
794 SUPREME COURT REPORTS (2014] 12 S.C.R.

A 151. We should not be taken to have suggested, that the
cost of litigation should be enhanced. It is not our suggestion,
that Court fee or other litigation related costs, should be raised.
Access to justice and related costs, should be as free and as
low, as possible. What is sought to be redressed is a
B habituation, to press illegitimate claims. This practice and
pattern is so rampant, that in most cases, disputes which ought
to have been settled in no time at all, before the first Court of
incidence, are prolonged endlessly, for years and years, and
from Court to Court, upto the highest Court.
c 152. This· abuse-of the judicial process is not limited to any
particular class of litigants. The State and its agencies litigate
endlessly upto the highest Court, just because of the lack of
responsibility, to take decisions. So much so, that we have
started to entertain the impression,. that all administrative and
D executive decision making, are being left to Courts, just for that
reason. In private litigation as well, the concerned litigant would
continue to approach the higher Court, despite the fact that he
had lost in every Court hitherto before. The effort is not to
discourage a litigant, in whose perception, his cause is fair and
E legitimate. The effort is only to introduce..consequences, if the
litigant's perception was incorrect, and if his {;{a use is found to
be, not fair and legitimate, he must pay for the,same. In ttie
present setting of the adjudicatory process, a litigant, no matter
how irresponsible he is, suffers no consequences. Every
· F litigant, therefore likes to take a chance, even when counsel's
advice is otherwise.

153. Does the concerned litigant realize, that the litigant
on the other side has had to defend himself, from Court to
G Court, and has had to incur expenses towards such defence?
And there are some litigants who continue to pursue senseless
and ill-considered claims, to somehow or the other, defeat the
process of law. The present case: is a classic illustration of
what we wish to express. Herein the regulating authority has
had to suffer litigation from Court to Court, incurring public
H
SUBRATA ROY SAHARA v. UNION OF INDIA 795
[JAGDISH SINGH KHEHAR, J.]
expense in its defence, against frivolous litigation. Every order A
was consistently and systematically disobeyed. Every order
passed by the SEBI was assailed before the next higher
authority, and then before this Court. Even though High Courts
have no jurisdiction, in respect of issues regulated by the SEBI
Act, some matters were taken to the High Court of Judicature B
at Allahabad (before its Lucknow Bench) .. Every such
endeavour resulted in failure, and was also sometimes,
accompanied with strictures. Even after the matter had
concluded, after the controversy had attained finality, the judicial
process is still being abused,. for close to two years. A C
conscious effort on the part of the legislature in this behalf, would
serve several purposes. It would, besides everything else,
reduce frivolous litigation. When the litigating party understands,
that it would have to compensate the paey which succeeds,
unnecessary litigation will be substantially reduced. At the end
of the day, Court tjme lost is a direct loss to the nation. It is D
about time, that tl'\e legislature should evolve ways and means
to curtail this unmindful activity. We are sure, that an eventual
determination, one way or the other, would be in the be.st
interest of this country, as also, its countrymen.
E
Bibhuti Bhushan Bose Writ Petition dismissed.