The Supreme Court has directed the Securities and Exchange Board of India to evaluate proposals submitted by real estate developers Oberoi Realty and Valor Realty (formerly known as DB Realty) for the development of debit-ridden Sahara Group’s 106-acre Versova land in Mumbai.
A three-judge bench, comprising Chief Justice Sanjiv Khanna and Justices M.M. Sundresh and Bela M. Trivedi, instructed the developers to deposit ₹1,000 crore each via demand draft to the Supreme Court.
The court clarified that the amount would remain untouched until a final decision is made on the matter. But after a deal is reached, the money will be handed over to the markets regulator towards Sahara’s ₹10,000 crore dues to the Sebi-Sahara refund account.
The hearing was adjourned for three weeks, with the bench stating that it would determine whether the developers’ proposals can move forward.
In September last year, the apex court had permitted Sahara to form a joint venture to develop its Versova property to raise ₹10,000 crore. The proceeds were directed to be deposited in the Sebi-Sahara refund account to repay investors, as mandated by the court’s 2012 directive.
In September, the bench also allowed Sahara’s firms—Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation Ltd (SHICL)—to pursue joint ventures for other properties, including the Aamby Valley project, with approval from the court.
It was clarified that any proceeds from property sales must be deposited in the Sebi-Sahara refund account, and sales below 10% of the circle rate would require court approval.
A decade-long legal battle
Under the 2012 Supreme Court order, Sahara was required to refund ₹25,000 crore, along with 15% annual interest, to investors. However, as of September 2020, Sahara had deposited only ₹15,455.70 crore, which Sebi invested in fixed deposits across nationalized banks. With interest, the total in the refund account stood at ₹22,589.01 crore.
Despite this, Sebi informed the court that Sahara still owed ₹10,325.62 crore as principal. Sebi accused Sahara and its firms of “gross violation” of court orders by failing to deposit the full amount.
Sahara Group’s legal troubles date back to 2010, when Sebi barred its chief, Subrata Roy, and its firms from raising funds through optionally fully convertible debentures (OFCDs), citing regulatory violations.
Sahara challenged the ruling in the Allahabad High Court, which temporarily restrained Sebi from taking action. However, the Delhi High Court later issued a warrant against Roy over allegations of investor fraud.
The Supreme Court ultimately ordered Sahara to disclose details of its OFCD schemes and refund investors with 15% interest. In 2014, Subrata Roy was arrested for non-compliance and sent to Tihar Jail. He was released on parole in 2016 but continued to face legal scrutiny.
In November 2023, Roy passed away at a private hospital in Mumbai after a prolonged illness.
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