Sahara chief Subrata Roy will stay in Tihar jail as the Supreme Court on Thursday refused him bail for not coming up with a “satisfactory” proposal to comply with the court’s August 31, 2012 order directing two Sahara companies to refund Rs 24,000 crore to over 3 crore investors.
A bench of Justices K S Radhakrishnan and J S Khehar said it was not inclined to consider Roy’s release from prison till he submitted an “attractive” refund package. “If you submit a proposal, we will consider. The key is in your (Roy’s) hand. You open it up, we will grant you bail,” the bench said.
The Sahara firms have paid Rs 5,120 crore and claimed that they have returned the dues to most of the investors. The court, which had initiated contempt proceedings against Roy and directors of two Sahara companies for not complying with the 2012 judgment and subsequent orders, had on March 4 ordered detention of Roy and two directors in civil prison till they came up with a viable refund proposal.
Three days after being sent to Tihar jail, Roy submitted a repayment proposal but it was rejected by the bench, which said the Sahara firms were wasting the court’s time.
With indefinite detention looming, Roy filed a writ petition seeking a declaration that the March 4 detention order was illegal as it was passed without any finding about his guilt in the possible contempt committed by Sahara Real Estate and Sahara Housing, the two companies in which he had miniscule shareholding.
After strenuous efforts for urgent listing of the matter, Roy’s counsel Ram Jethmalani on Wednesday told Justices Radhakrishnan and Khehar that he was “embarrassed” to point out the mistakes committed by the bench in passing the March 4 detention order and had wondered whether the petition could be placed before a larger bench.
On Thursday, the bench opened the hearing with the remark, “We have gone through the writ petition. Nothing in the petition embarrasses us. You can argue the petition including its maintainability.”
Jethmalani said, “It is not possible to conclude the hearing today. My suggestion is let us start the hearing but my client is not sure what his offence exactly is. He believes it is contempt of court. Even if I presume that is the offence for which he is jailed, it is a bailable offence as the maximum punishment is six months imprisonment.
“My suggestion is let the incarcerated persons enjoy their Holi festivities with their families. Roy’s mother is much more seriously ill. They should be released on bail as it is only a bailable offence. I always maintain that justice must always be compounded with mercy and humanity.”
But the bench asked whether Roy had a better proposal than the one submitted on March 7. Jethmalani said whatever best proposal could be made, was already made. “If I stay in jail, I cannot meet others to make the proposal any better than what I had submitted before. Release him on personal bond as it is a bailable offence. Please do not make things more difficult than it was earlier,” he pleaded.
After senior advocate Rajeev Dhavan pointed out the perceived “procedural and substantive” mistakes in the March 4 detention order, senior advocate Arvind Datar on behalf of market regulator Sebi said Roy’s petition was not maintainable.
Datar said, “I am astonished that those detained want to celebrate Holi. They are in contempt since May 2013. What about the 3.3 crore investors from whom they collected a record Rs 25,870 crore? It was a record — 33 million investors for two companies — a number which was much more than all investors in all companies in India.”
He said for an income tax due of Rs 250, the tax recovery officer was legally empowered to detain the defaulter for six months. “This is a question of default in payment of Rs 25,000 crore and yet he (Roy) calls the incarceration illegal,” Datar said.
Before the scheduled time of court work got over, Jethmalani made a last ditch attempt for Roy’s bail. But the bench asked for a fresh proposal. When Jethmalani could not give any, the bench said, “If you file an appropriate proposal, we will consider.”