Supreme Court bang Subrata Roy, accuses him of lying at every stage

NEW DELHI – The Supreme Court on Tuesday rejected Sahara group chief Subrata Roy’s proposal to pay Rs 22,500 crore through sale of assets and furnishing bank guarantee and sent him to jail in judicial custody till March 11 accusing him of lying to the court at every step for the last one-and-a-half years.

A bench of Justices K S Radhakrishnan and J S Khehar ordered detention of Roy and two other Sahara directors – Ashok Roychaudhury and Ravishankar Dubey – and sent them to judicial custody in Delhi. It did not send another contemnor, Sahara director Vandana Bhargava, to custody and said she would coordinate with the detained persons to come out with a better refund proposal.

The bench permitted the contemnors to mention the matter for advancing the date of hearing if they had a “concrete and acceptable proposal to offer”.

Trashing Roy’s claim that vast majority of investors had been paid back their money, the bench said, “Documents and affidavits produced by the contemnors themselves would apparently falsify their refund theory and cast serious doubts about the existence of so-called investors. All the fact finding authorities have opined that majority of investors do not exist.”
Explaining the harsh step it was forced to take, the court said, “Preservation of market integrity is extremely important for economic growth of this country 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 structure of this country and will make imbalance in wealth between haves and have nots.”

It said despite numerous opportunities for refund, the Saharas adopted dilatory tactics. “Non-compliance of the orders passed by this court shakes the very foundation of our judicial system and undermines the rule of law, which we are bound to honour and protect. This is essential to maintain faith and confidence of the people of this country in judiciary,” it said.

Roy was produced before the court by UP Police, which arrested him pursuant to the non-bailable arrest warrant issued against him for non-appearance in court on February 26. He stood up before Justices Radhakrishnan and Khehar and said, “Unconditionally I tender apology. Believe me, my reasons (for absence) were very genuine. I am very sorry for my absence on February 26.”

The bench said it accepted the apology for absence but persisted with its question throughout the hearing about compliance with its August 31, 2012 judgment directing Sahara Housing and Sahara Real Estate to refund Rs 24,000 crore with 15% interest to nearly 3 crore investors.

Roy added to what his counsel – senior advocates Ram Jethmalani, Rajeev Dhavan, Ravishankar Prasad and C A Sundaram – argued. He said, “We were facing a bad situation. This kind of liquidity (cash in hand) is not there even with the banks. We are ready to sell the assets starting from tomorrow. Money will come. Whatever shortfall, we will make good by giving irrevocable bank guarantee. Be sympathetic to us. We will give bank guarantee for Rs 22,500 crore.”