SC sets tough terms for Subrata’s release
Sahara chief Subrata Roy’s immediate release from Tihar Jail remained uncertain as the Supreme Court on Friday declined to relax the conditions for interim bail like depositing Rs 5,000 crore in cash and a bank guarantee of equal amount and set more tough terms, including payment of the entire Rs 36,000 crore in 18 months. Immediately after a Bench of Justices TS Thakur, AR Dave and AK Sikri pronounced the judgement, Roy’s counsel Kapil Sibal sought clarification, asking “whether the release is conditional on furnishing bank guarantee”.
The Bench replied in the affirmative saying “it is subject to deposit of Rs 5,000 crore in cash and Rs 5,000 crore in bank guarantee as per the March 26, <g data-gr-id="46">2014</g> order”. Sibal said the group was unable to secure the bank guarantee as the financial institution, which had agreed to furnish it, has backed out when SEBI insisted on fixation of the “trigger point” for encashing it. “Trigger point has to be there,” the Bench <g data-gr-id="44">said,</g> and clarified to Sibal that the period of 18 months will start from the date of his <g data-gr-id="43">release,</g> after he fulfils the bail condition.
And on release, if Roy fails to adhere to meet the time-frame for depositing money or defaults in payment with SEBI, he will have to surrender to custody, the court said.
Sibal said it was difficult to secure a bank guarantee of Rs 5,000 crore and wanted it to be reduced to Rs 4,000 crore. The Bench asked him to file an application in this regard and suggested that instead of Rs 5,000 crore in cash, Sahara should deposit Rs 6,000 crore.
Along with another senior advocate Rajeev Dhavan, Sibal also sought <g data-gr-id="34">relaxation</g> that the interest component from the principal amount should be kept out for the time being so that the burden should be less.
The Bench, which accepted the format of bank guarantees in its judgement, said the amount to be paid to the market regulator by Sahara is a “huge liability, which the firm is bound to discharge by depositing the same with SEBI”.
“Keeping in view the total liability which according to SEBI, has risen to Rs 36,000 crores (approximately), the contemnors shall deposit the balance outstanding amount within a period of 18 months commencing from the date of their release from custody in nine instalments,” the Bench said.
It clarified that the total amount has been computed by taking into consideration the interest on the principal amount.
The court said that that first eight instalments shall be of Rs 3,000 crore which shall be payable every two months from the date of their release from custody while the last installment shall be of the remaining amount.
“In the event of default in payment of two instalments (not necessarily consecutive) the bank guarantee furnished by the contemnors (Roy and two other directors) pursuant to the order of this Court shall be encashed by SEBI and the amount so received counted towards part compliance with the earlier directions given by this Court,” the Bench said.
It added: “The bank guarantee shall also be <g data-gr-id="31">encashable</g> in the event of failure of the contemnors to deposit the full amount outstanding against them within a period of 18 months commencing from the date of their release.”